Price action

Price action refers to the study of how prices move over time, primarily through visual inspection of charts, without relying on lagging indicators. Traders analyze patterns formed by candlesticks, bars, or lines to identify support, resistance, trends, and potential reversals. This method focuses on the raw price data, believing all necessary information is reflected in price itself.

For a retail trader, understanding price action can reduce reliance on complex indicator systems, potentially simplifying decision-making. It encourages disciplined observation of market structure and supply/demand dynamics. While it requires subjective interpretation and practice, it can help identify entry and exit points, managing risk by setting stop-losses based on clear market levels rather than arbitrary indicator signals.