What Is Price Action?
Price action trading is a methodology that makes buy/sell decisions based entirely on raw price movement — candlestick patterns, support and resistance levels, trend structure, and chart patterns — without relying on lagging indicators. The philosophy is that price itself contains all the information needed, as it reflects all buying and selling decisions in the market.
How Price Action Works
Price action traders read the market through the lens of supply and demand. A bullish engulfing candle at support means buyers overwhelmed sellers at a known demand zone. A failed breakout means the supply zone held and trapped buyers. Every candlestick is a story about the battle between buyers and sellers in a specific time period.
Why It Matters for Traders
Price action is the foundation on which all other analysis is built. Even indicator-based traders benefit from understanding price action because indicators are derived from price. In crypto, where liquidity dynamics and leverage create unique candle patterns (long wicks, liquidation candles, gap fills), price action literacy is essential for reading the true story behind the charts.
