What is price action?

Everyone keeps saying price action but what exactly does that means? 

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Super Admin
Love watching prices go up and down :)

Price action is exactly what it says it is. It's the way price acts or moves, and it is studied by plotting the price using charts. This movement of price is the basis of technical analysis as traders study charts to identify patterns that they beleive can help them predict the price movement.


Trades use various kind of charts, e.g. candlesticks, renko, bars, heikin ashi among others to help them derive meanings from price movement, e.g. bullish hammer pattern formation after falling prices in a stock may be considered as a signal of trend reversal. Apart from the patterns, traders use supports and resistance, trendlines, trading volumes and other information as they see fit to make sense of price action.

Written Nov 26, 2020