Many of you have come across candlestick analysis more than once, seen the charts of such analysis. This method was also described by Steve Neeson. However, after a while, a more perfect way to "read" charts appeared - Price Action. The new method became known to many thanks to the English-speaking forum, where trader James16 introduced us to this method.
One of the disadvantages of Price Action. in the fact that there is no single center in which all the necessary information would be. The rules are easy to learn, but to learn them you will have to work with a couple of dozen sources. The purpose of the post is to make this task easier.
This post will be useful both for beginners as material for studying and acquaintance with this method, and for experienced traders who want to consolidate their knowledge.
In this post we will try to go beyond the traditional framework of Price Action and fill it with new content.


At some point, any newbie falls into the trap of their indicators. Naturally, he does not have enough patience to achieve results from one indicator, therefore, for what he will not undertake - losses are everywhere. In hearts, our hero throws out all the indicators and suddenly discovers that, in fact, it is possible to work without them. However, the price action opening is not always so dramatic. Sometimes you expand your candlestick analysis tools in the most natural way and suddenly realize that everything is already open to you. Price action should be considered a modern branch of technical analysis that significantly expands its capabilities. While the traditional trader uses indicators and chart patterns, the price action aficionado prefers patterns - both candlestick and bar-based. If you look closely at the statistics, you can see when the topic of currency trading with price action began to gain momentum. It was when retail forex from 2005 went to the masses.
History of Price Action
It all started, of course, with the basics of technical analysis and Dow theory. Charles was one of the first to base his forecasts purely on market trends, not to mention the revolutionary idea of ​​“the price takes into account everything” for those times. Therefore, if we take it as an axiom, all information necessary for trading is hidden in the charts. This topic is not new. When we study candlesticks, the first thing we read are books by Steve Neeson, who introduced Japanese candlesticks to American traders in the 1990s. In them, he told how you can trade exclusively with Japanese candlesticks. However, his books are more focused on stock markets, where realities differ from the forex market (gaps, trading is carried out only during trading sessions, etc.)
Martin Pring became a worthy successor of Dow's ideas, who for many years has been teaching traders to trend trading based solely on price behavior and price levels.
An advanced version of this theory - Elliott Waves - is described in the writings of Prechter and Frost. Support and resistance, along with pivot points and swings (waves), are also price action. They are also trend lines and channels. Any tools that are aimed at studying the nature of the price itself and its trends can be attributed to the PA component. Perhaps the founder of price action in its modern form is Tony Crabbel, who wrote the book "Day Trading with Short Term Price Patterns & Opening Range Breakout" in 1990. In it, he described the now almost forgotten PA patterns such as NR7, WS7, IDnr4 and many others.
As the interest of retail traders in Forex grew, there was an urgent need for indicator-free analysis for a 24-hour forex market with frantic liquidity, where there are no gaps. This is how price action practices began to appear, trying to formalize their work specifically for the forex / futures market. The father of this trend is James16, who has been leading the price action topic on the American ForexFactory forum since 2005. Gradually, a whole cohort of traders emerged, which began to develop and teach price action ideas. Among them: Alex Nekritin; Al Brooks; Suri Dudella; Dan Chesler; Lance Beggs; Nial Fuller; Chris Capre; Bob Volman; Cory Mitchell; Jonathan Fox; Kim Krompass. And many others. There are also thousands of RA systems that are developed by traders "for themselves", based on other people's works, and this is one of the most effective ways to get the most out of price action. Actually, I myself did just that and I advise you. You need to carefully study someone else's and create your own.
Many traders consider the words James16 and Price Action almost as synonyms. A trader with this nickname really did a lot for the development of Price Action, so this connection is not surprising. The main thing that James16 did was to systematize and supplement the existing information on RA, turning it from a set of pattern descriptions into a full-fledged trading strategy. All data is available completely free of charge, so don't miss the chance to improve your trading.
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