According to John Murphy, there's a slight difference between price action and market action. Market action includes: price, volume, and open interest (open interest is used only in futures and options). The term "price action," which is often used, seems too narrow because most technicians include volume and open interest as an integral part of their market analysis.
There seems to be some confusion here. Technical trend followers use the variables of the markets in a scientific manner; technical trend following is not Price Action oriented. Similarly, supply/demand techniques use the variables of the market. See the retail provided example from traders laboratory. Again these are not a Price Action oriented scientific application of PA. Presently Price Action is a "popular" trade (vendor oriented) drawing card. See Ensign vendor provided example ET rules notwithstanding. Relative bar end price values are emphasized. In the past, Price Action was typified by point and figure and three other techniques: Kagi, Renko and three line break. See Achelis "TA from A to Z", pages 233, 158, 258 and 275, respectively. You can review the expo programs of the Trader's Expo for the last five years to see the general shift in product marketing from the diversity of the past and, now, the focus on Price Action. In the vendor world, there is always something that is new and improved. Currently PA is the name of the game. Price Actions strives for simplicity by using few cases and particular price values that occur rarely. The result is a simple rule set that defines recent past relative extremes. There is only implied predictive value stated within the rules as "stay with the present conclusions until you are updated in the future. " In the past this was referred to as "lagging indicators". Obviously the advanced PA trader can counter this with the "truisms" of inductive experience. Trend following has a geometric influence and PA does not. Trend following uses all the market variables. See technical standards like Magee or Murphy which are periodically edited an updated. Use Harris for the standard market and trading foundation. Harris has ommitted a PA box in his heirarchy for good reason. It is not a system or method in the sense of a comprehensive approach to making money. Similarly, Achelis omits PA from his comprehensive discussion of TA. As for the not scientific (non scholarly) publications like Bass and Lowenstein, neither index Price Action (one omits an index). The confusion above can be sourced by checking a related index as well. First and OT, TF omits in its index one of the variables of TF: volume. This is so unfortunate. Price action is omitted as well. Understand this paragraph does not deal with any science aspects but is just "reporting" oriented documentation or "story telling" stuff. Price Action is a vendor induced fad and the dog will not hunt ultimately simply because it is not systematic. Meaning, there is no complete structure, no complete process and it is not possible the get results from the incomplete structure and process. For history buffs and interview reading buffs, read Justin Fox and Lo, respectively. Unsurprizingly, no PA in either book. I don't take any real interest in PA, so this just a skimpy set of corrections to the misinformation supplied in this thread.
hey genius, sorry..what i meant was its something you have to figure out yourself through observation not from some textbook..
I went into a thread - 85% of the posts in the thread are by DbPhoenix. Same as who started the stickies on top. Hardly a gathering of minds.
I've attached an image of price action trading. It's just making trade decisions via a chart (bar, candlestick, line et cetera) or price quotes or both and nothing else... Yes, it is a form of technical analysis. However, you will meet traders that use indicators like volume, moving averages et cetera and still call themselves price action only traders (no indicators) because they do not consider any additonal stuff thrown on charts or price quotes as indicators even though the additional stuff is being used to help define the price action for those that need it. Price Action trading can be taught, learned but that doesn't imply you'll have or develop the market experience to apply it profitably. Therefore, don't assume it's the easiest form of trading nor assume just because you've read books or many forum threads on the topic that you'll become a profitable trader... Your profits will depend upon you and market experience regardless if you're a price action trader or someone dependent upon indicators. Tip: Most price action traders that are profitable have a strong understanding of supply/demand and market psychology. Mark