No indicator, just the bars:price itself and where it scars.
A trading approach that analyses raw price movements on a chart without relying on indicators.
Price action traders use candlestick patterns, support/resistance levels, and chart patterns to make decisions.
In plain words
Price action is the study of the price chart itself, without indicators laid over it. The reader looks at the size and shape of candles, at successive highs and lows, and at levels where the price has turned before, known as support and resistance.
See it move
Candle 6 of 6: closed above where it opened
Why it matters
Price is the raw material every indicator is calculated from, so reading it directly shows changes without the delay an indicator adds. It involves judgement, and two people can look at the same chart and reach different conclusions.
Worked example
An example only. The figures are round and invented for the arithmetic: they are not market prices.
An invented price makes a series of swings.
- 1Highs1.1020, then 1.1050, then 1.1080, each higher than the last
- 2Lows1.1000, then 1.1030, then 1.1060, each higher than the last
- 3Next low1.1040, which is below the previous low of 1.1060
Higher highs and higher lows are the usual description of an uptrend; the lower low is the first break in that sequence and is read as the trend weakening, not as proof that it has ended.
A common mistake
Working without indicators can seem more objective. Patterns and levels are drawn by eye, so price action is at least as open to seeing what one hopes to see.
Check yourself
Learn more
- Academy lessonCandlestick patternsThe anatomy of a candle and the single, two- and three-candle patterns most often named in price-action analysis, with their caveats.
- GuideJapanese candlestick patterns: a visual vocabularyDojis, hammers, engulfing bars and stars: what each pattern looks like, what it is taken to say about buyers and sellers, and why context matters more than the shape.
Educational information, not investment advice or a recommendation to trade.