Introduction to price action

 PURE PRICE ACTION

Ensured by Luckghin fx

Price Action is based on price reaction on Support/Resistance, Trendline, Channel using good candle reversal and continuation pattern for decision making. Price Action set up revolves around dynamic swing points(Low and High) drawn on a strong Support/Resistance, Trendline and Channel
Price Action strategy is very simple and easy to use when it comes to trade analysis.It is not complicated like some other trading strategies as it does not involve the use of too many inductors Action set up produces its entry points, exit points, take profit etc.
Now for you to actually understand what Pure Price Action is all about, I have mentioned some important tools above that one need to understand before trading any market using Price Action strategy to generate good profit. The tools are as follows;

1. Support
2. Resistance
3. Trendline
4. Channel
5. Candle Reversal pattern
6. Candle Continuation pattern

The proper understanding of the above tools will give you a good insight on how to use Price Action to leverage in the any market of your choice. The good thing about Price Action strategy is that it works in any market using any time frame of your choice.It works very well for Scalper, Intra-day Trader, Swing Traders and Position Traders. Now let take a looking at the above tools on how to identify it.

SUPPORT: As the name implies it support the bullish trend when price have moved in a bearish direction hitting the swing low when the bear do not have much strength to pull the price in a downward direction. Look out for a candle reversal pattern(do not worry cos I will explain that in details) then draw a horizontal line at the swing low to represent the Support.

RESISTANCE: It is the horizontal line that is drawn at the swing high of any pair when a the bull have no strength to rally in an upward direction. Look out for a candle reversal patterns then draw a horizontal line call the Resistance line.
The image below shows the Support/Resistance line.

TRENDLINE: Price moves in horizontal and diagonal pattern. When price shows a diagonal patterns Trendline are used to spot out the reversal pattern as price bounced off from already drawn Trendline. If price are moving in horizonal pattern the tools mentioned above Support/Resistance are use to find possible trade set up. The image below shows the image of a trendline.

CHANNEL: This is a form of Trendline that has upper and lower trendlines. When the two comes into place on a chart it is called a Channel. Price move from the Lower to Upper Channel or vice visa.

CANDLE REVERSAL AND CONTINUATION PATTERNS: When the Support/Resistance, Trendline and Channel are established depending on the direction of the trend patterns.The next thing to look out for is the candle reversal and continuation patterns as price reacts from Support/Resistance, Trendline and Channel. In my my price action trading strategy, I only consider five (5) Candle reversal and continuation patterns out of about twenty eight (28) candles patterns. The five candle patterns are as follows;

1. Pinabar
2. Railway Track
3. Outside Bar
4. Inside Bar
5. Doji (Spinning Top)
   The images below shows the five candle patterns that occurs as any swing low or swing high on any time frame in any market.
   
   
   
   

The last candle pattern from the image is not Dogi but Doji
I will post the next article the next day.

•