Price Action

Trading without indicators. Pure price movement tells you everything.

Core principle: The chart reflects all buying and selling. Read it.

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What Is Price Action?

Price action is reading raw price movement on charts — no indicators, no algorithms.

Why it works:

• Price = truth
• Indicators lag
• Price moves first, indicators confirm

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Core Price Action Concepts

Swing Highs and Lows

Pattern	Meaning
Higher high	Buyers in control
Lower high	Selling pressure
Higher low	Buyers stepping in
Lower low	Sellers in control

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Support and Resistance

Level	Meaning
Support	Buying pressure
Resistance	Selling pressure

Key: Stronger with each test.

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Trend Identification

Trend	Structure
Uptrend	HH, HL
Downtrend	LH, LL
Range	Bounded

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Key Candlestick Patterns

Reversal Patterns

Pattern	Implication
Hammer	Reversal up (bullish)
Shooting star	Reversal down (bearish)
Doji	Indecision
Engulfing	Trend reversal

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Continuation Patterns

Pattern	Implication
Marubozu	Strong continuation
Three white soldiers	Trend continuation
Three black crows	Trend continuation

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Price Action Trading

Step 1: Identify Structure

• Trend or range?
• What’s the bias?

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Step 2: Mark Key Levels

• Recent highs
• Recent lows
• Pivot points

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Step 3: Wait for Setup

Setup	Trigger
Support bounce	Price tests support
Resistance rejection	Price hits resistance
Breakout	Price breaks structure

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Step 4: Enter

• On confirmation
• With stop

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Common Patterns

Pin Bar (Pinocchio)

       Wick
        ↗
      ╱   ↘
     ╱     ╲
    ╱       ↘
          Body

Why it works: Price rejected from level.

Trade: Enter at close of pin bar.

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Engulfing

Bearish Engulfing:
    ╲    ╱
     ╲  ╱
      ╲╱
     ╱╲
    ╱  ╲
   ╱    ↘

Why it works: Momentum shift.

Trade: Enter on close of engulfing.

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Inside Bar

   Inside
    ┌─┐
    │█│
    └─┘

Why it works: Consolidation before break.

Trade: Breakout of inside bar.

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Price Action vs Indicators

Aspect	Price Action	Indicators
Speed	Immediate	Lagging
Objective	Somewhat	Highly
Reliable	In trends	In ranges

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Common Mistakes

1. Subjectivity

Problem: Everyone reads charts differently.

Fix: Define clear rules.

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2. No Confirmation

Problem: Entering on potential.

Fix: Wait for confirmation.

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3. Ignoring Context

Problem: Trading pin bars in ranges.

Fix: Trade in trend direction.

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Key Takeaways

1. Price is truth — Just read it
2. Swing points — Key levels
3. Patterns — Repeat
4. Wait for confirmation — Don’t anticipate
5. Keep it simple — Less is more

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Related

technical-analysis.md >>>

multi-timeframe-analysis.md >>>

Strategy-Development.md >>>

Read price. Follow the money.