What does Price Action Mean to you?

[hcour]

I think the EUR/USD 2hr chart is nice illustration of some "price action" principles. The wk starts w/a huge gap down, then a WRB down closing on the low. Then the next 18 bars slowly, ever so slowly, creep back up to that resistance at the top of that WRB bar, where there are then a couple upthrusting tails on wide spreads closing on the lows, then the 4:00 bar a WRB down closing on the low that pretty much wipes out the gains of those previous 18 bars in one fell swoop. That's "price action", baby!

H

 

[kevinmclark]

Quote from hcour:

I think the EUR/USD 2hr chart is nice illustration of some "price action" principles. The wk starts w/a huge gap down, then a WRB down closing on the low. Then the next 18 bars slowly, ever so slowly, creep back up to that resistance at the top of that WRB bar, where there are then a couple upthrusting tails on wide spreads closing on the lows, then the 4:00 bar a WRB down closing on the low that pretty much wipes out the gains of those previous 18 bars in one fell swoop. That's "price action", baby!

H

Unfortunately, I don’t have access to this chart, via my charting package, but I can visualize what you are describing. Thanks!

 

[Mike805]

Quote from oddiduro:

Volume is almost a completely ramdom entity.

I don't agree with that statement. Volume and price IMO are complimentary - they drive each other. I will say that while there are lesser "quantifiable" measures/setups of pure volume, there do exist make-it-or-break-it price points where volume is the contingent factor.

As far as what price action is, look at this way:

At least two people have to agree on a price given a set of information. The information remains constant and the price does not. That's action.

 

[murray t turtle]

Quote from kevinmclark:

I often read comments posted by traders that say "I don't use indicators, but only price; or, price is the best indicator". What does this mean (candlesticks, volume, tape reading, etc...)? I find, these terms are often used, but rarely explained.

====================
Yes;
lots of prices/experience are one of the best indicators.

A stab thru resistance may not mean much,
not limited to ,but especially @ open;
in good downtrends like airlines.

And even a price stab thru support;
in strong uptrends like oil/gas sector , may not mean much

 

[oddiduro]

Quote from BSAM:

But, volume oftentimes provokes a profound effect on the price action. For example: When price falls thru support on increased volume.

Agreed, but this phenomenon is not an absolute. Sometimes price will reverse with heavy volume. Sometime price will drift quite a bit lower on almost no volume. Volume is not a reliable indicator of what price will do at selected points.

Price remains the only absolute.

Regards
Oddi

 

[BSAM]

Quote from oddiduro:

Agreed, but this phenomenon is not an absolute. Sometimes price will reverse with heavy volume. Sometime price will drift quite a bit lower on almost no volume. Volume is not a reliable indicator of what price will do at selected points.

Price remains the only absolute.

Regards
Oddi

Understand. I'm just trying to help Kevin draw some general conclusions, because be has not enjoyed clarity in this area. I'm quite sure that he has observed only a fraction of the charts/price action that perhaps you and I have. It's just that these threads get started and pretty soon the only concensus that is achieved is confusion!

Many factors are involved when making trading decisions on "price action". I don't believe the TICK has even been mentioned here. I've tried to stick close to the basics just for clarity. Under certain conditions when price falls thru support on lowered volume, a good signal is still given. You're so right.....it varies greatly. A novice though, can only become confused when he hears these seemingly contradictory statements. As you and I know, it usually takes years to digest the real rules of good trading.

Appreciate your feedback, Oddi!

 

[Cheese]

Quote from kevinmclark:
I often read comments posted by traders that say "I don't use indicators, but only price; or, price is the best indicator". What does this mean (candlesticks, volume, tape reading, etc...)? I find, these terms are often used but rarely explained.

What does Price Action Mean to me?
Nothing.

Its useful to be able to read price alone and act upon it. But you are NEVER going to amass a fortune from any market with such knowledge.

 

[FuturesTrader71]

Quote from Cheese:

What does Price Action Mean to me?
Nothing.

Its useful to be able to read price alone and act upon it. But you are NEVER going to amass a fortune from any market with such knowledge.

Huh? If you are not trading prices, what are you trading?

 

[Cheese]

Quote from FuturesTrader71:

Huh? If you are not trading prices, what are you trading?

The question is price action alone, yes or no?
Too difficult for you perhaps?

 

[BSAM]

Quote from Cheese:

The question is price action alone, yes or no?
Too difficult for you perhaps?

Cheese.....

Please explain what method works for you.