Price Action


DEFINITION of 'Price Action'

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.

  1. Bar Chart

    A style of chart used by some technical analysts, on which, as ...
  2. Retracement

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  3. Support (Support Level)

    The price level which, historically, a stock has had difficulty ...
  4. Resistance (Resistance Level)

    A chart point or range that caps an increase in the level of ...
  5. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  6. Candlestick

    A chart that displays the high, low, opening and closing prices ...
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