you learn to read price action through putting in screen time - watching the market depth and the bid / offer interaction and getting a feeling for where the path of least resistance lies. it's not something which can be taught or learnt from a book.
it's the equivalent of tape reading back in the day, so if you're looking for a book maybe start with that.
forumites quilty of not reading the question properly. Price action is a term, not a strategy. It is a blanket term for the behavior of a share price, although typically traders use it more to define that something is actually happening at a certain level. Since it is a blanket term, it also is used to define the share price in conjunction with volume. Candlesticks are the best way to define price action, IMO, because they indicate if there is absolutely no variation in a stock's price (i.e. if there is no price action) or if certain price levels are attracting volume or rejection (i.e. price action).
Agreed Skaap but ,well, we saying study of price action will not make you money, so rather study discipline in trading: Investopedia explains 'Price Action' No two people will analyze every bit of price action the same way, and that is why a lot of traders find the concept of price action so elusive. Quite literally, price action is everything that a security's price does, and just like every other facet of analysis, it is purely subjective. Read more: http://www.investopedia.com/terms/p/price-action.asp#ixzz1vm6vp24B
entering high probability trades is a myth...if it was that easy, then we all be very rich and oh all those authors of books on high probability trades...they rich because you going to buy their books!
No, not all. Let me give you an example. Take any top40 share that is fairly Iquid. Let's assume that is trading well beyond the low of the previous candle and is also way outside the bollinger band. It is highly probable that the price will retreat to the bollinger band eventually. This is huts just an example. By studying price action I want to understand the psychology involved in trading allowing me to better trader / investor.
well, thats just a trading system...but i did what Simon advised and traded the ALSI futures for many minutes and hours and days and this is true: " Re:Re:Price action by SimonPB on 24 May 08:24 agreed, no book will teach you, tis expereince .. watch a high liquid ticker (best be ALSI futures) .. just watch it for hours, days, weeks, months .. until penny drops an it makes sense
High probability trades are not a myth. Look at this chart: http://chartupload.com/viewer.php?file=57474110209164244330.jpg If you waited for the traingle break in the momentum, with both the RSI and MACD moving upwards for a couple of weeks, that would have been a high probability trade. Everything on this chart is an indication of a rise in the future price, and today the clear break over 10740. There is now a high probability that this will go up to 12200-12300.
yes , agree with setup, but once you enter the trade, when do you exit and if you exit too early or too late, if you win or loose, will affect your next trade.When you see the same setup and this time you get stopped out, will you trade the next setup...Every 15 minutes, its easy to work out where the ALSI is going, but impossible to know for sure even with the best setups and systems...so the most any system can give you is 33% success, and even that requires a lot of discipline!