Price action is literally just that -- it's what's going on with the price, e.g. stock is up/down 5%. On the institutional side, price action can be across any time frame, but normally it is nearer (shorter time intervals). You don't trade on the price action, because price action is just an indicator of something happening. You need to have a view before you place a trade, and there's not enough information in price alone to tell you what to do. Avoid thinking in terms of "buy the dip" or "fade the rally" and focus more on positioning and outlook. Alot of times a stock will start to move down before there is news, causing day traders to buy, and then an after market presser comes out that drives the stock further. Don't be stupid. However, if you have a view -- e.g. company is poised to outperform (maybe because of a recent beat and raise, or the stock had been trading at a big discount to peers and you noticed a big fund started to buy in last quarter from their 13-f) -- you can take advantage of the price action. What you'll realize is that it's very hard to randomly look at a stock seeing a price move. A better idea is to "cover" a series of securities (maybe 30-50 stocks, with 10 in depth and the rest depending on how they perform over a quarter, etc.), and respond to price action on those stocks that you have an existing view on.
Price action is dependent on technical analysis tools but it is not as objective as other indicators. In price action strategy, a trader tries to predict the market by looking at the price movements in the recent past. The decision made is subjective because not every trader interprets the price movement in the same way.
Price action is a method used to interpret market movement without the need for indicators. It is mainly approached through visual analysis of candlesticks that display the high, low, open, and closing prices for a specific period. Traders probe candlestick patterns that reflect the impact of trends to decide foregoing trade actions (If you want to read more in detail here). it a good and simple method that doesn't cluster your screen with many indicators which is better for beginner I would say
Post up an example of a chart that you use to trade price action. One picture is worth a thousand words, thanks.
not exactly, price action is geared solely towards trying to analyze what is happening and using knowledge of similar previous patterns to estimate what could happen in the future.
Every single trade IMO is a prediction, otherwise you be "betting the farm" on each signal. Life is a prediction, insurance companies have tons of data of how much you should pay so they can make billions of bucks of profit. Even though an apple falls to the ground, if the Earth ever changes rotation, apple might not drop to the Earth.