Price Action Foundation

This guide introduces price action and lays a solid foundation for learning more advanced techniques and strategies.

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Price action trading is a form of technical analysis that uses market data (like price and volume) to predict future market movements.

Price action is a simple approach to trading that does not rely heavily on indicators. Instead, it focuses on the most critical variable: price. The simplicity it offers in an industry where the next magical indicator is constantly emerging appeals to many aspiring traders.

However, price action is just one of the many trading approaches. It is a tool, and tools are only as good as those who wield it. To many traders, price action is the elusive Holy Grail. Yet, it is neither elusive nor the Holy Grail.

Price action is not elusive. One can acquire it easily, but the challenge is in using it profitably. Trading with price action is typically discretionary. There is no magic formula, but there are tendencies and nuances.

Price action is not the Holy Grail for all traders, but it does illuminate the markets for some traders. In most aspects, price action trading is not superior to other trading approaches. However, it is a method suited for the minimalist trader.

My advice is: don’t be a price action purist or an indicator-crazy trader. Instead, adopt an open approach that reviews each trading method based on its own merits. But price action is a good starting point for any trader.

In this Foundation Guide, I have carefully picked articles and tutorials beneficial for traders new to price action trading. Specifically, it includes an overview of essential price action trading tools and key concepts.