Price Action Trading: Reading Charts Without Indicators
Price action trading uses only price and candlesticks — no indicators. Learn how to read the story price is telling. Read naked charts: structure, levels and.
What Is Price Action Trading?
Price action trading analyses raw price movement without indicators. No RSI, no MACD, no moving averages — just candlesticks, support/resistance, and market structure. The philosophy: all indicators are derived from price, so price itself is the best indicator.
Core Concepts
- Support/resistance: Where price has reversed before, it's likely to reverse again
- Market structure: Higher highs + higher lows = uptrend. Lower highs + lower lows = downtrend
- Candlestick context: A hammer at support is bullish. The same hammer in the middle of nowhere is noise
- Break of structure: When a trend makes a lower high (or higher low), the trend may be changing
Reading Price Action
- Strong momentum candle: Long body, small wicks — institutional conviction
- Rejection candle: Long wick at a key level — buyers/sellers rejected
- Inside bar: A candle within the previous candle's range — consolidation, breakout imminent
- Engulfing at a level: Strongest reversal signal in price action
Trading Strategy
(1) Identify the trend on the daily chart using market structure. (2) Mark key support/resistance levels. (3) Drop to 4H chart. (4) Wait for price to reach a key level. (5) Look for a price action signal: engulfing, hammer, inside bar breakout. (6) Enter with stop beyond the level. (7) Target the next key level.
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Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70-80% of retail investor accounts lose money when trading CFDs. Backtesting does not guarantee future results. Always consider whether you can afford the potential loss of your capital.