A:

Price action refers to the day-to-day fluctuation in the price of an asset. Traders gauge a stock's price action by monitoring patterns and indicators to help find order in the seemingly random movement of price.

Technical analysis is the study of past price movements. Hundreds of indicators have been designed to help predict an asset's future direction. Common chart patterns include the ascending triangle, the head and shoulders pattern and the symmetrical triangle.

In trading, no two people will analyze every bit of price action in the same way. As a result, many traders find the concept of price action to be elusive. Like other areas of active trading, gauging the price action of a stock is completely subjective. For more information on this topic, see Basics of Technical Analysis.

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