2.......PRICE ACTION fundamentals

 ☞ ☞   PRICE ACTION ☜ ☜ ☜ ☜  

  Price Action describes what Is Happening with price 

Indicators and/or patterns can suggest what MAY happen to price action.


P/A is simply an updating record of price movement - very often it is explained via marks placed on a market chart. It is a way to describe what price has done over the long term and what it is currently doing...
Price Action is THE fundamental tool - traders need to understand it, IMO.

When price is making a series of Higher Highs (HH) and Higher Lows (HL) we say that Price Action is positive or that it's trending upwards. Price Action is negative or trending down when there is series of Lower Highs (LH) and Lower Lows (LL) showing on the chart. Price Action that's not trending in one direction or the other is considered 'Chop' or sideways movement. I recommend that you train yourself to read P/A on charts until it becomes ingrained within your sub-conscious. It is really a very simple concept but it forms the basis of all price movements and direction changes.
  
It's open to interpretation where to mark HH's, HL's etc.
Price can go up, it can go down or it can go sideways...it can also stop changing entirely...


Price Action is Price Action on any time frame chart...
All three charts below are showing the same basic Price Action pattern : 
Pull backs in an up trend...
Without the scales it's difficult to distinguish what time frames they represent...

.......2 hours per candle ......................3 minutes per candle........................Daily candles ......
........Spanning about 2 days.................Spanning about 2 hours...........Spanning about 2 months
PRICE ACTION - TRENDS WITHIN TRENDS
To the left of the vertical line is a longer term down trend 
consisting of two legs and high lighted with red arrows.
Two shorter trends are contained within the longer term trend
 and identified by the red circles - trends within trends..
A reversal of those down trends became apparent to the right
 of the vertical line -- a new up trend.

P/A Trends and a few of the Reversal hints that often accompany them.