Price Action Trading Book - Summary
The “Price Action Trading Book” is essential for anyone interested in buying and selling securities based on the observation of price movements. This trading strategy closely examines the fluctuations, or “action,” of prices, typically represented in easy-to-read candlestick or bar charts. These charts are vital for price action traders. Unlike many other trading methods, price action traders use a “naked” chart, meaning they avoid additional indicators. They believe that these indicators may only provide delayed feedback about the market, making price action the most reliable indicator available.
Price movement patterns reveal in real-time how supply and demand interact with any security or currency pair. When price changes occur, they show shifts between buyers and sellers. For example, increased supply can lead to a price drop, while rising demand can push prices higher.
Understanding the Price Action Trading Book
What is Price Action Trading?
In our analysis of the Price Action Trading Book, we see that the overall trend is downward. There’s a resistance level that the price is approaching, and it’s also nearing the 61.8 Fibonacci level, which aligns with this resistance. This situation is known as confluence. Confluence happens when two or more price levels intersect, creating a significant market point.
Traders often look at past price patterns and their formations to predict the market’s future direction. Price action trading involves various tools like chart patterns, candlestick formations, trendlines, price bands, market swings (both upswings and downswings), support and resistance levels, consolidations, Fibonacci retracement levels, pivots, and more.
Generally, price action traders do not emphasize fundamental analysis, which deals with the root causes of market movements. Why is this? They believe that market prices already incorporate all essential information. However, it’s important not to overlook major economic news releases, such as interest rate decisions, Non-Farm Payroll reports, and FOMC announcements. From personal experience, I can tell you, “Economic news can play a dual role as both a supporter and a challenge for your trades.”
You can download the Price Action Trading Book PDF using the link given below.