behind as price moves over time, this price action footprint is visible by looking at a price chart of any market or trading instrument. We also want to make note of whether a market is respecting technical levels (support / resistance, moving averages, etc.) consistently. This pattern can be used with additional technical analysis as a way to qualify entries and exits. Munehisa Homma, the first price action trader, began using candlestick charts in the 1700s. Price action analysis is the act of analyzing and making sense of the footprint of money on the chart. The day-to-day flow of money and day-to-day price strength. Yet another false breakout of resistance, you can see how repetitive humans are and how they do not learn they will do the same thing over and over, the good thing is, you can profit from their ignorance! This is how we read the psychology of the market on a bar-by-bar basis. After a modest pullback, a bullish pin bar formed, price pushed higher as we might expect, netting anyone who traded this pin bar a nice profit. For an expanded definition of price action, read my introduction to price action here. All of the trading tutorials I have produced for my students since 2008 are the exact type of real world education resources I wish I had access to when I started my trading journey all those years ago.
The first thing we are noticing, starting from the right side of the chart is that the overall daily chart trend was down, lower highs and lower lows were being printed. Think of the story the market is telling you as a forex Südafrikanische Broker window into the future; you dont always know what the future will hold, but when you study past events and how they connect to current events, you can make a very good educated guess. After this warning signal, we can see price capitulated, finally breaking down and out of the trading range for good. The delta footprint is used by traders to help confirm that a price trend has started and will continue. We also will easily notice whether the market is making big directional swings or smaller / shallower swings. We can interpret the story by reading the charts like a book, from left to right; what happened earlier in the chart / book usually has an impact on what is happening currently and what might happen next. Looking from left to right, we can see a clear uptrend was in place as price bounced from.00 support in Crude Oil. Price bars reveal contrarian opportunities In the chart below, we are analyzing how price bars can reveal contrarian trading opportunities. The primary points to take away from todays lesson are: Price action is literally the footprint of money across a chart, allowing us to see the behavior of all market participants.