Introduction to Price Action

From the beginning of this blog, I’ve been talking about the different tools and technical analyses that traders can use in the stock market. Today, I will briefly discuss price action.

What I’ve gathered so far is that price action— while being a technique, is also merely drawing conclusions based on the chart alone and price of the asset without using indicators or moving averages. Through price actions, traders can identify patterns and make decisions. Something I see being highlighted is that price action is subjective, which means that it stays open to interpretation. Subjectivity is not entirely bad in my opinion, on the contrary, I think that it’s flexible and therefore, bend to anyone’s perception.

"That’s why it’s always important to understand your trading psychology and have a trading plan in place to avoid making decisions based outside of your own rules." - forex.com

In the last post I briefly touched on being patient and never going against your own rules. Today, I am finding that you need a plan, a plan that makes sense to you, and following your plan/rules. I haven't come up with any rules or plan yet, as it is week one and I am still learning different concepts. While I've been relying on indicators + divergence, I wouldn't say it is my strategy at the moment.

This is all for now, short, mainly because I want to split up price action and how to read it on a chart. Tomorrow, I will be not only talking about price action again, but giving it a shot as well.

Lastly, I've realized that I haven't necessarily set an ROI goal for my 365 stock journey. This is something I will be finalizing and honing before Q1 culmination.