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
Price Action has various concepts and chart patterns.
- Support and Resistance
- Retraction levels
- Length of candles
4.Pattern of candles
- Small waves and Chaos is created by traders and retail investors.
- Big waves are always created by investors and institutions. We must follow
them to win game.
- 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..
- Simple definition OF PRICE ACTION is Action behaviour of people at certain
- To define the support and resistance: draw a trendline. Join peaks and dips u
get channel and support and resistance levels
- 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
- Price movers out of channel after long time with High volume is considered
- 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
- To draw demand zone or supply zone accurately:
Previous SIGNIFICANT candle
- Investors behaviour on chart pattern ( in concise ) to know price action
Sequence of Event
Generally Long term investors and trigger. They sell big chunk of
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..
- For drawing the support and resistance lines 3 dips minimum of the candles or
levels should be touched by the line for best result