Term of the Day: Price Action
Price Action refers to the movement of a security’s price over time — it's the purest form of market data. Traders study price action using candlestick charts to spot trends, reversals, and entry/exit points, often without relying on technical indicators.It’s the foundation of technical analysis. Tools like moving averages and chart patterns (like flags, triangles, and head-and-shoulders) are all derived from it.
Why It Matters:
Price action tells the story of what buyers and sellers are doing. It helps traders make decisions based on market behavior — not just math.
Quick Takeaways:
• Shows how price moves over time
• Used to identify trends and patterns
• Forms the basis for most chart analysis
• Doesn’t guarantee the future — but it gives useful clues