Price action is the movement of a security's price. Price action is encompassed in technical and chart pattern analysis, which attempt to find order in the sometimes seemingly random movement of price. Swings (high and low), tests of resistance and consolidation are some examples of price action. The candlestick and price bar are important tools for analyzing price action, since they help traders visualize of price movement. Candlestick patterns such as the Harami, engulfing pattern and cross are all examples of visually interpreted price action. BREAKING DOWN 'Price Action' No two people will analyze every bit of price action the same way, and that is why a lot of traders find the concept of price action so elusive. Quite literally, price action is everything that a security's price does, and just like every other facet of analysis, it is purely subjective. Technical analysis is a trading tool employed to evaluate securities and attempt to forecast their fu...
A bullish formation, White Marubozu is formed when price action suggests that the bulls have dominated the trade from start to the end of session. Since the bulls have dominated the whole trading day, there is a high probability that in the short-term, further upward movement might be witnessed at the counter. Appearance of White Marubozu after a long phase of southward or sideways movement should alert a trader and that particular stock should be brought up on the trading screen for a possible long trade.
According to me, there are 3 distinct kinds of market movements: Trending Market- Option Buyers in control causing majorly one sided moves either side. Anyone can make good money under these conditions with very little knowledge and a basic strategy. Volatile Market- Option Sellers in control causing price to squeeze inside a zone. Normal momentum traders will be stopped out again and again causing huge losses. To make some money you need to create a short straddle, which gives slow profit through time decay. Recent example is in Nifty 50. For the 1st 5 sessions of September, price was within the range of the big trending move made on the last day of August. People who sold CE of that day’s high and PE of that day’s low made slow and steady profit for 5–6 days without having to do any adjustments. Market Top/Bottom- Nobody can tell where the top or bottom of a cycle is so it is impossible to sell at the highest point or buy at the lowest point (...