Can someone define and explain "price action"?

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patriotstef
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Can someone define and explain "price action"?

Postby patriotstef » Thu Jul 16, 2009 12:58 pm

Hello again,

How that for a NewB question?

I hear all this talk about how price action is what matters above all else... let indicators eat cake, and so forth. But what IS price action? What exactly does one look at to know what to do next? What does all of this mean?

Thanks guys
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FXDavidL
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Postby FXDavidL » Thu Jul 16, 2009 1:29 pm

Price action is basically the movement of price. You use tech and chart analysis to try and find a pattern in the random movement of price.

Its just the action of the price. Using candlesticks makes it easier to track price action.

What you look at and what you do next is what lots of threads here are about and I can't type a simple 1 sentence answer to that.

*edit* Here is a good link about it.
http://www.tradingmarkets.com/.site/for ... -77799.cfm

patriotstef
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Postby patriotstef » Thu Jul 16, 2009 1:46 pm

Thanks for the link!

Now then folks, why is this claimed to be better than indicators?

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Postby FXDavidL » Thu Jul 16, 2009 1:53 pm

Others could probably answer this better as I am still a noob as well, but you could say its because lots of indicators are not needed because they can't help predict the price movement any better than just studying price action and knowing how to interpret it. Its like they are not needed and could just cause more confusion, because no indicator can properly see the future and can know whats going to happen to price. Plus sometimes indicators kinda follow the prices shadow and have a delay.

I don't think all indicators are bad, but a lot are useless or just make things more confusing.

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Postby koolbreeze » Thu Jul 16, 2009 2:04 pm

Now then folks, why is this claimed to be better than indicators?

Because most indicators are based on the underlying price action. If you're driving your car down the road do you need to look in the rear view mirror to see where you're headed?

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patriotstef
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Postby patriotstef » Thu Jul 16, 2009 2:09 pm

Alright, I guess my question should have been, "What, as far as price action goes, gives you the high/low probability for an entry/exit?" In other words, are we just looking at candlestick patterns (engulphing, dojis, etc), or what?

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Postby PINKPANTHER5 » Fri Jul 17, 2009 1:08 am

Price action apparently is the best way to trade. But its not that simple. It takes experience and a lot of observing.

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Postby kc8flq » Sat Jul 18, 2009 2:37 am

Lets ask the dictionary what it says..... :)

http://www.investopedia.com/terms/p/price-action.asp

Everybody will interpret it differently also...
Give a man a fish.... feed him for a day...
Teach a man to fish.... feed him for a LIFETIME!!!

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monolisa
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Postby monolisa » Sat Jul 18, 2009 3:41 am

"Know your enemy and know yourself, find naught in fear for 100 battles. Know yourself but not your enemy, find level of loss and victory. Know neither your enemy or yourself, wallow in defeat every time." - Sun Tzu

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Postby patriotstef » Tue Jul 21, 2009 12:26 pm

I'm under the impression that price action is the number of buyers compared to the number of sellers. The more you have of one, the more in that direction the price of the currency pair will go... correct?

If that's correct, then how do we determine how many buyers/sellers there are right before the movement takes place?

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