what is price action in forex Trading - YouTube

so let's take a look at a term that is quite  loosely used in the forex market and that is  

what is price action well if you're trading for  any time at all you will eventually come across  

this term and it's not an easily defined term  because it's there's no real set parameter as  

to what it would or would not be ultimately price  action is the movement of an asset over time in  

this case a currency pair in other words if  the market is rising it's been bullish or  

positive and if it's falling it's been bearish  or negative you know it can be it can it can be  

compressed to something that simple luckily China  in charting platforms give you the ability to see  

quite clearly whether or not the market has been  rising or falling so as i zoom out you can see  

that this market has been falling recently has  been bullish this is the Aussie yen but this is  

going to be the same with any pair and it gives  you the ability to understand whether or not we  

are rising or falling over the longer term or  you know the shorter term if that's what you're  

trading now you have to keep in mind that price  action encompasses everything that happens the  

price action is pretty much everything you know  sometimes on the stately chart here you can see  

that the market just goes back and forth there is  a consolidation trade there sometimes there are  

patterns that come out of it you know in this  case like a bearish pennant there are bullish  

flags there are a multitude of other types of  shapes that people pay attention to and typically  

what they're looking at is consolidation and then  a continuation or reversal to in this situation  

and there are literally hundreds of those shapes  that people trade and it gives you an idea as to  

what's likely to happen it gives you an idea of  for example being able to read what the market  

is doing you have the ability to place trades a  little bit more strategically so let's go back  

to perhaps this bearish pennant you could make a  serious argument that once we broke down through  

here that we had broken through some resist from  supportive action resisting it going lower so  

support had been broken and we had continued  going forward well if you pay attention to  

the price action you can see that you can also  see that several of these candlesticks formed  

long wicks to the upside so it shows you that  every time they tried to rally it really worked  

against them now you can also make an argument  for resistance being broken so for example you  

could say that obviously the market is struggling  to get above this area you can see that we tried  

to get there several times and eventually we did  broke a break above there and then came back to  

test it a couple of times it's very common it's  something called market memory that is price  

action price action shows a breakout it shows  a pullback it shows a continuation continuation  

back and forth you should never trade against  price action because quite frankly it doesn't  

matter what you think you know a lot of times  you'll see things like you know people on  

forums saying well price has fallen too far so  you could have said that here you know look at  

how much it fell just over a handful of a couple  of days but it got much cheaper a lot of people  

would say well the Aussie is very cheap against  the yen it's at 70 you know I find that to be  

extraordinarily cheap so therefore I'm going  to buy it well it went another thousand pips  

against you before it finally rallied you know  the market will move much quicker than you can  

anticipate and much further there is no such thing  as cheap or expensive at least from a technical  

a standpoint you can say so from a fundamental  standpoint that's an entirely different process  

and again you need to understand when markets  break support or resistance so you look for areas  

where the market has struggled to either get above  or below and again in this case you can see that  

we had clearly had trouble getting above here and  then we broke higher and it put up a nice little  

trade again this was an area this shape that had  offered a lot of support and it offered a great  

trade so make sure you learn all about that  you have to study price action and we have in  

our series of videos plenty of examples of this  to help you become a sex a successful technical  

trader it involves shapes trends and even to a  lesser extent indicators if you do not study and  

then pay attention to price action you are doomed  to fail the market doesn't truly care what you  

think should happen it will do what it does and  it will tell you what it wants to do over time if  

you work with the market as opposed to against it  you obviously have much better chance at success

you