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Price action is a trading methodology that relies on reading raw price movements on a chart — candlestick patterns, support/resistance levels, trend structure, and market context — without relying on lagging indicators like moving averages or oscillators. Price action traders believe that all relevant information is already reflected in the price. It is a widely used approach among forex traders.
A price action trader watches the daily EUR/USD chart. They see price form a pin bar (long wick rejection) at a known support level of 1.0950 after a downtrend. Without checking any indicators, they enter long with a stop loss below the pin bar’s wick, targeting the next resistance at 1.1050.
