What is price action?
Price action for swing traders is the art of looking at individual candles to determine the probable direction of a stock - without using any technical indicators.
Ultimately, analyzing price action tells you who is in control of a stock. It also tells you who is losing control: the buyers or the sellers. Once you are able to determine this, you can pinpoint reversals in a stock and make money.
Learn the price action tips on this page and I guarantee you that you will be a better swing trader.
Let's begin.
Tip #1. Identify support and resistance levels
This is a no brainer. Identifying support and resistance levels is one of the first things you learn in technical analysis. It is the most important aspect of chart reading. But, how many traders really pay attention to it? Not many. Most are too busy looking at Stochastics, MACD, and other nonsense.
Some traders think that a support or resistance level is a specific price. Wrong. It's an area on a stock chart. Let me give you an example.
The areas that I have highlighted are the correct support and resistance levels. Often times you will hear traders say something like this: "The support level for XYZ stock is $28.76." This is wrong. It's an area - not a specific price.
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