Price action trading
What is price action trading?
Price action trading, as the name suggests, is a type of trading that relies upon reacting to price movements as they happen. The investor uses accumulated knowledge on past events to make an informed judgment on the likely path of the price of a particular security.
Where have you heard about price action trading?
As an investor, you may well have heard about price action trading when reading investment guides. You may also have come across price action trading in the more sophisticated financial media. Your financial adviser may have mentioned price action trading to you.
What you need to know about price action trading...
Unlike much technical activity, however, it does not rely on studying price charts going back over a long period but of using some charts of recent movements while also looking in real time at volume of orders and price movements.
There is a range of price-action trading, from almost instinctive, on-the-spot reactions to price movements to a style much closer to traditional technical analysis.
Find out more about price action trading...
Price action trading relies on techniques that are the opposite of fundamental investment analysis. Learn about fundamental analysis here.