Price action analysis in TradingView is one of the core methods of technical analysis, predicting future price movements by studying price movement patterns themselves. This method doesn't rely on indicators but focuses on price patterns and candlestick patterns.
Core Price Action Concepts:
1. Trend Identification
- Uptrend: Series of higher highs and higher lows
- Downtrend: Series of lower highs and lower lows
- Ranging Market: Price fluctuates within horizontal range
- Trend Lines: Straight lines connecting highs or lows
2. Support and Resistance
- Support: Levels where price may bounce when falling
- Resistance: Levels where price may stall when rising
- Key Levels: Historical highs/lows, round numbers
- Role Reversal: Support becomes resistance, resistance becomes support
3. Candlestick Patterns
- Single Candle: Hammer, Shooting Star, Doji
- Two Candles: Engulfing, Piercing, Dark Cloud Cover
- Multiple Candles: Morning Star, Evening Star, Three White Soldiers
- Continuation Patterns: Rising Three Methods, Falling Three Methods
4. Chart Patterns
- Reversal Patterns: Head and Shoulders, Double Top/Bottom, Triple Top/Bottom
- Continuation Patterns: Triangles, Rectangles, Flags, Wedges
- Gaps: Common gaps, Breakaway gaps, Continuation gaps, Exhaustion gaps
TradingView Price Action Analysis Tools:
1. Trend Line Tools
- Uptrend Line: Connect lows
- Downtrend Line: Connect highs
- Trend Channel: Parallel trend lines
- Regression Line: Statistical-based trend line
2. Support/Resistance Tools
- Horizontal Lines: Mark key levels
- Fibonacci: Identify support/resistance levels
- Pivot Points: Calculate key levels
- Previous Highs/Lows: Mark historical highs/lows
3. Pattern Recognition Tools
- ZigZag: Identify price turning points
- Pattern Recognition: Automatically identify common patterns
- XABCD: Harmonic pattern recognition
- Wave Count: Elliott Wave analysis
Price Action Analysis Steps:
1. Determine Market Structure
- Identify current trend
- Mark key highs and lows
- Draw trend lines
- Identify support and resistance levels
2. Wait for Price Action Signals
- Observe price reaction at key levels
- Look for candlestick patterns
- Identify chart patterns
- Confirm entry signals
3. Confirm Entry Timing
- Multiple timeframe confirmation
- Volume confirmation
- Momentum confirmation
- Reasonable risk-reward ratio
4. Manage Trade
- Set stop-loss
- Set take-profit
- Trail stop-loss
- Scale out of position
Price Action Trading Strategies:
1. Trend Following Strategy
- Wait for pullback to trend line
- Look for entry signals near trend line
- Stop-loss below trend line
- Target next key level
2. Reversal Trading Strategy
- Wait for price to reach key level
- Look for reversal candlestick patterns
- Confirm pattern validity
- Stop-loss outside the pattern
3. Breakout Trading Strategy
- Wait for price to break key level
- Confirm breakout validity
- Enter on pullback
- Stop-loss on other side of breakout level
4. Range Trading Strategy
- Buy at support
- Sell at resistance
- Stop-loss outside range
- Target other end of range
Price Action Analysis Techniques:
1. Multi-Timeframe Analysis
- Large timeframe determines trend
- Medium timeframe finds opportunities
- Small timeframe for precise entry
- Ensure all timeframes align
2. Key Level Identification
- Historical highs/lows
- Round numbers
- Previous high-volume areas
- Fibonacci levels
3. Volume Analysis
- Volume on breakout
- Low volume on reversal
- Stable volume in continuation
- Volume divergence warning
4. Momentum Confirmation
- Price makes new highs/lows
- Momentum indicator confirms
- Avoid momentum divergence
- Confirm trend strength
Common Mistakes:
1. Overtrading
- Trading every signal
- Not waiting for confirmation
- Ignoring market conditions
- Frequent entries and exits
2. Ignoring Trends
- Trading against trend
- Not identifying trends
- Blind trading
- Ignoring big picture
3. Poor Risk Management
- Not setting stop-loss
- Stop-loss too large
- Excessive leverage
- Not controlling position size
4. Lack of Patience
- Entering too early
- Not waiting for confirmation
- Rushing to take profits
- Not following trading plan
Best Practices:
1. Keep It Simple
- Focus on major patterns
- Don't use too many tools
- Clear trading rules
- Simple entry and exit
2. Consistency
- Use same method
- Follow trading plan
- Record all trades
- Regular review
3. Continuous Learning
- Study price action
- Learn new patterns
- Analyze successful trades
- Learn from failures
4. Risk Control
- Risk no more than 2% per trade
- Set reasonable stop-loss
- Control position size
- Protect capital