Price Action

Price Action

INTRODUCTION:

Price action is based on candlestick chart reading.
Price of share is decided by demand and Supply.
There is human mind behind price. Even after evolution Human behaviour is not
changed . It’s same as it was 50000 years ago.
Human behaves in certain predictable pattern.
Human come into Action at Certain price, and that called as price action.
It predictable behaviour.
For Example price bounce from supports. There are certain levels at which
demand start
Price Action has various concepts and chart patterns.

  1. Support and Resistance
  2. Retraction levels
  3. Length of candles
    4.Pattern of candles
    LESSONS LEARNT:
  4. Small waves and Chaos is created by traders and retail investors.
  5. Big waves are always created by investors and institutions. We must follow
    them to win game.
  6. Usually institutions start actions after 1.30 to 2pm.
    We neet to see the Volume and Candle length. Usually any big move started
    after 2.30 pm in carried forward next day also. Out 3.25 pm strategy was based on
    this. Buy today Sell Tomorrow..
  7. Simple definition OF PRICE ACTION is Action behaviour of people at certain
    price.
  8. To define the support and resistance: draw a trendline. Join peaks and dips u
    get channel and support and resistance levels
  9. If fall is normal then it will respect technical levels. Price bounce from Support.
    Fibonacci retraction is useful to predict the fall.
    If fall is Abnormal then technical are useless
  10. Price movers out of channel after long time with High volume is considered
    breakout
  11. For drawing trendlines, the time frame to be considered for depends on the
    type of trading
    EOD for long term
    Hourly chart for short term ..
    5 min chart intraday
  12. To draw demand zone or supply zone accurately:
    Support level
    Previous SIGNIFICANT candle
    Fibonacci retraction
  13. Investors behaviour on chart pattern ( in concise ) to know price action
    TIME FRAME
    Sequence of Event
    Generally Long term investors and trigger. They sell big chunk of
    shares.
    Then trader do short selling .
    Then retailers panic and sell.
    Then Short Covering rally come up and price goes little higher
    Then again price go down because no buyers.
    Long term investors start accumulating…Price goes up..
    Traders join gang and price go higher and higher..
    Retail join last..
    Cycle continues
  14. For drawing the support and resistance lines 3 dips minimum of the candles or
    levels should be touched by the line for best result