Weekend Gyan Ep4:: What is Price action strategy...?

  • Price action trading is about understanding the imbalance between buying and selling pressure so that you can identify trading opportunities and make a profit.

  • As a price action trader, price is king—everything else is secondary.

  • Price action trading is not a strategy but a framework for trading in different market conditions.

  • Price action trading is not the holy grail, and it has its downsides. For instance, it’s impossible to perform an accurate back test, it takes a lot of time to validate a trading strategy, and there is subjectivity is involved.


  • The pre-breakout technique allows you to enter a breakout before it occurs by identifying price rejection (at support or swing low) on the lower time frame.

  • There are three categories of trends: strong trends, healthy trends, and weak trends.

  • You want to avoid trading in the direction of the trend when the price is far from the mean.

  • Pay attention to the trending and retracement moves because this gives you clues to the strength and weakness in the markets.

  • The average true range (ATR) gives you an idea of how much the market can potentially move in a day.

  • Not all markets are the same. Some will exhibit trending behavior while others will exhibit mean-reverting behavior.

  • You can refer to the market structure on the higher time frame to help you better manage your trades (to determine whether to capture a swing, ride a trend, or adopt a hybrid approach).

  • The market moves in volatility cycles, from periods of low volatility (and vice versa)

Source: Price Action Trading Secrets Book

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