What does Price Action Mean to you?

Discussion in 'Technical Analysis' started by kevinmclark, Sep 20, 2005.

  1. I often read comments posted by traders that say "I don't use indicators, but only price; or, price is the best indicator". What does this mean (candlesticks, volume, tape reading, etc...)? I find, these terms are often used, but rarely explained.
  2. Trading price action is the purest form of trading.

    Use any type of chart that shows only price and time.

    Understand what the market is trying to tell you by focusing only on the movement of prices
    K-Rock likes this.
  3. What type of chart do you use (candlesticks, line, bars, etc.)?

  4. Rarely explained ???.

    I have seen hundreds of posts here at ET where traders explain something about candlesticks, tape reading, volume, s/r analysis, pivot point analysis et cetera...

    I've seen hundreds more with chart examples.

  5. then don't use these terms. learn to watch price dynamics with your own eyes and in your own terms. otherwise you will never be able to understand what's going on in the market, even if you'll be an encyclopedia of terms like 'candlesticks' and so on.

    look for what you understand and trade that. anything else will only eventually get in your way. you should understand THE MARKET. not TRADERS' TALK. you'll be surprised to find out that these are completely different worlds with very little connection between them, more often than not. in fact it's much easier to understand the market than to understand all the BS that traders are talking about.
    K-Rock likes this.
  6. Arnie


    Some examples.....

    Stocks moving up on strong volume
    Stocks consolidating with low vol
    Stocks breaking down on strong volume
    Relative strength within a sector, or index

    Other examples are a sharp pullback within a intraday trend (counter trend move). Look to enter in direction of trend (usuallly you set a tight stop).

    These are just a few.
  7. Any chart that show you prices will do fine. Candles, lines, and bars are all good places to start.

    Look at prices only. Volume and "the tape" should initially remain outside the scope of your focus.
  8. The term “price action” is too vague, to me. When it’s used I’m not sure exactly what to assume (candlesticks, volume, tape reading, etc.). I searched this board and others for a clear and concise definition to no avail. My intent is not to criticize, but to better understand.
  9. BSAM



    What do you not understand about the words "price action"? Seems like you're trying very hard to overcomplicate matters here.

    Do you understand the concept of support and resistance?
  10. What does price action mean to you? I'm beginning to wonder if it can be objectively defined. Is it just relative to the trader?
    #10     Sep 20, 2005