Technical analysis is a trading discipline employed to evaluate investments and identify trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume. Unlike fundamental analysis, which attempts to evaluate a security's value based on business results such as sales and earnings, technical analysis focuses on the study of price and volume.
The "Price Action" method of trading refers to the practice of buying and selling securities based on the fluctuations, or "action," of their prices; typically the data of these price changes is represented in easily-readable candlestick or bar charts.
We'll start with a review of candlesticks and how they are plotted on charts, as this information is the fundamental building block of the science of price action trading.
Candlestick is a type of price chart used in technical analysis that displays the high, low, open, and closing prices of a security for a specific period.The thick body of the candle indicates the range between the period’s opening price and closing price. On a bullish candle (indicating a price increase over the time period), the open is indicated by the bottom of the body, the close by the top - the opposite is true for a bearish candle(indicating a price decrease). The wick or shadows indicate the range of price’s movements during the period. Whenever prices are reached beyond the range bounded by the open and the close, wicks will be visible to indicate the extenet of these highs and lows.
The "Price Action" method of trading refers to the practice of buying and selling securities based on the fluctuations, or "action," of their prices; typically the data of these price changes is represented in easily-readable candlestick or bar charts.
We'll start with a review of candlesticks and how they are plotted on charts, as this information is the fundamental building block of the science of price action trading.
Candlestick is a type of price chart used in technical analysis that displays the high, low, open, and closing prices of a security for a specific period.The thick body of the candle indicates the range between the period’s opening price and closing price. On a bullish candle (indicating a price increase over the time period), the open is indicated by the bottom of the body, the close by the top - the opposite is true for a bearish candle(indicating a price decrease). The wick or shadows indicate the range of price’s movements during the period. Whenever prices are reached beyond the range bounded by the open and the close, wicks will be visible to indicate the extenet of these highs and lows.
