Price action is a trading methodology that relies on reading raw price movements on a chart — candlestick patterns, support/resistance levels, trend structure, and market context — without relying on lagging indicators like moving averages or oscillators. Price action traders believe that all relevant information is already reflected in the price. It is one of the most popular approaches among professional forex traders.
A price action trader watches the daily EUR/USD chart. They see price form a pin bar (long wick rejection) at a known support level of 1.0950 after a downtrend. Without checking any indicators, they enter long with a stop loss below the pin bar’s wick, targeting the next resistance at 1.1050.
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