Introduction to Price Action Trading

Jul 14, 2024

Lecture Notes on Price Action

Introduction

  • Price Action: One of the most important parts of technical analysis
  • Advising to subscribe to the channel

Market Psychology

  • Two main players in the market: Buyers and Sellers
  • Market movement example: tug of war
  • How price action works without any indicators
  • Key components of price action

Dow Theory

  • The market always moves in a trend
  • 3 phases of a trend: Accumulation, Public Participation, Distribution
  • Market response after each phase: price goes up or down

4 Main Skills of Price Action

  1. Understanding the Trend
  2. Studying Support and Resistance
  3. Identifying Candlestick Patterns
  4. Recognizing Chart Patterns

Candlestick Patterns

  • Structure and meaning of Green and Red Candles
  • Single and Double Candle Patterns
  • Hammer Patterns: Indicator of trend reversal

Chart Patterns

  • Various patterns that form in the market
  • Example of Double Top and Neckline
  • Identifying support and resistance from trend lines

Market View

  • Analysis of the global market: Using Google and Moneycontrol websites
  • Importance of PCR (Put Call Ratio)
  • Observing futures and index volume

Trading Strategies

  • Determining global market condition: Red and Green Index
  • Starting trading view with PCR
  • Live market analysis of price action

Important Points

  • Do not trade against the trend
  • Select the right instrument
  • Pay attention to risk to reward ratio

Conclusion

  • Start with paper trading and increase experience over time
  • Advise subscribing to the channel and sharing the video