What's Price Action in Indices Trading?

Indices stock price action is analysis of stock trading price movements that are drawn on stock charts.

Indices stock price action strategy uses line tools or stock price action setups to try and determine the trend of the stock price chart.

Indices stock price action signals can also be combined with systems that can be used to figure out what direction of trading to take.

Pin Bar Price Action Strategy

A pin bar is a trend reversal stock signal on a trading price chart which highlights an obvious change in stock market sentiment during that trading period.

This pin bar stock price action set-up has a long tail with the closing stock trading price near the open. The pin bar pattern looks like a pin thus the name Pin Bar - forms after an extended trend move up or down.

This trend reversal is confirmed after market closes below the candle stick that precedes this stock price action pattern setup. Below the reversal setup is confirmed after the stock trading market trading prices closes below the blue candle that preceded this pin bar candlestick.

Price Action 1 2 3 Method in Indices Trading

Price action trading strategy is use of only price charts to trade Indices, without use of technical chart indicators. When trading using this technique, candlestick stock charts are used. This strategy uses lines and pre-determined patterns such as the 1-2-3 pattern that either develops as one stock price action pattern setup or series of stock price action setups.

Traders use this stock price action strategy because this analysis is very objective & allows the one to analyze the stock trading price market movements depending on what they see on the stock charts & market movement analysis alone.

This strategy is used by many traders: even those who use indicators also integrate some form of stock price action in their strategy.

Price Action 1-2-3 Break-out Strategy

This stock price action strategy uses three chart points to determine the break out direction of indices. The 1-2-3 method uses a peak and a trough, these points forms point 1 and point 2, if market moves above the peak the trade signal is long, if it moves below the trough the trade signal is to short. The break-out of point 1 or point two forms the third point.

Price Action 1-2-3 Breakout Strategy Examples

Combining Price Action Strategy with other Indicators

Good indicators to combine stock price action trading patterns with are:

• RSI

• MA Indicator

Traders should use these two indicators to confirm if the direction of the stock price action break-out is in line with the trend direction shown by these two stock chart indicators. If the direction is also the same as the direction of these indicators then stock traders can open a trade in direction of signal. If not traders shouldn't open a trade as there's more likely a chance that this stock signal may be a whipsaw.

Just like any other chart indicator in Indices Trading, price action strategy also has whipsaws & there is a requirement to use this strategy as a combination with other stock signals as compared to just using this stock price action strategy alone.

RSI and Moving Averages Price Action Strategy