Price Action Analysis

One of the only two "leading indicators" in stock market trading is price action. Here we discuss the many facets of price action and how it affects your trading. To make it simple, price action is the movement of price over time. Price action typically happens in channels or patterns over time, and reverses at areas of liquidity, aka "Support and Resistance." An example would be a trading channel, or a stocks price interacting with a specific moving average, etc.

Volume is the second leading indicator in trading. Modern stock trading algos are more complicated than ever and can hide pretty much anything and trick you into making a bad trade decision, except volume and price action, unless you're measuring volume as it happens. 

The language of candlesticks and candlestick patterns. Sentiment tells us what the overall trend of a stock is and how those trading it are feeling about where price currently resides.

Value areas are "Price Zones" where price can or should reverse. Value areas are basically horizontal lines on a chart, at specific price points, where previous price action shows that the stock may change directions at these places. These areas or "price zones", are a critical place that all experienced stock traders routinely identify and have a "Plan A" and "Plan B" for these zones.

The world of indicators is as vast and customizable as as a vehicle. You use what works for you. From MA's (moving averages), RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence), MA Crossovers and hundreds of others, the only person who can determine what works best in your stock trading is you - through education and experience.