Price Action... Please describe

Anyone, Please describe what is actually meant with that 'price action' phrase??

And more advanced question, at what TF does analysis based on that 'price action' actually works, is it at particular TF (some say longer TF such as 4H even W), or is it at any TF??

Thx for your response...

I'll give it a shot.

Price action refers to the analysis of what price itself is doing in the present, as opposed to any lagging indicator. This could include support/resistance, swing highs/lows, candlestick formations.

As for the timeframe, it's my opinion that you could make use of PA on any, but generally the larger the TF, the more accurate it is.

^

Ow, nice answer from junior member.

I guess that justifies how we can't judge the book by its cover (or by the posting count in this case).

In my opinion, many of us neglect this one thing, price action. We often too much indulged in our complex indicator or any other analysis. (You don't believe what I say? Well, you can look at your chart and decide which one is more complicated? Your Indicator or Your Chart?).

I just want to remind myself how important it is to understand the move of the market by seeing the price action without consider it as described in efficient market theory. And more importantly, knowing what I don't know.

Lastly, by that knowledge (and un-knowledge, sorry don't really know the opposite!!), position myself in the place most suitable to take my small portion of profit.

Remember, small is a matter of subjective choice.

Anyhoo, it's just me, newbie thinking. You may ignore it if it ain't suit you.

Price action is usually the study of the formation of bars or candles on any timeframe (because markets are fractal) in the way they reflect order flow from buyers and sellers at any given point in time. Because the study of bar formation reflects the order flow in real time it is more relevant than any indicator which must, by virtue of sample size, lag what the market is doing.

Obviously it works on any time frame. Some people say it is more reliable on the longer time frames because it is less liable to market "noise" which is another way of describing irrational movements caused by news spikes, large commercial transactions, squaring off at the end of a session, week or month - those types of affects.

What makes price action particularly interesting to the succesful trader is the behaviour of the market (ie traders) when price reaches support and resistance levels. This applies just as relevantly on the 5 minute chart as the weekly. The main disadvantage of trading on the lower time frames is that it can take a little time to analyse a set up correctly. Other disadvantages on lower time frames include the difficulty of getting filled at the correct price if the market is moving and also the spread damages the risk:reward ratio.

I could go on but I'll shut up now for fear of being boring and let you work out what else could make the lower time frames less, or more, effective.

Price action in its purest form is a never ending (slow/fast) tick by tick (buyers/sellers) stream.

Since nobody can watch an infinite tick by tick chart, different timeframes (1,5,15m,hourly,daily,monthly) come into play where the price action is concentrated into f.e. candles or bars.

It's nothing more or less.