How to read price action?

<p>Till my experience, exiting from a trade is not a problem but entering a trade is a big challenge to me. As, the market makers are found of spiking before allowing the market move in the right direction.</p>

<p id="isPasted">Price action is a trading technique that allows a trader to read the market and make subjective trading decisions based on the recent and actual price movements.&nbsp;</p><p>The study of price action is the study of price movements, while the study of price action trends is the study of trends. A variety of trading techniques can be used to identify and follow price action trends, including the head and shoulders trade.&nbsp;</p><p>For new traders, this is a fantastic tool since it allows them to easily learn from their more experienced peers by chasing price action trends. You would open a 'buy' position when there are green uptrends and a 'sell' position when there are red downtrends.</p><p>Analysts use charts to look for patterns or indicators that suggest how securities will perform in the future and to determine when to enter and exit trades. Trading tools such as moving averages and oscillators produce forecasts based on price action.&nbsp;<br></p>

<p id="isPasted">Due to price action trading's connection with recent historical data and past price movements, technical analysis tools like charts, trend lines, price bands, high and low swings, technical levels (of support, resistance, and consolidation), etc. are considered according to the trader's decision and strategy fit.</p><p>Analysis of price action involves analyzing trends and pullbacks, also known as impulses and corrections. If the waves of the trending wave outweigh the waves of the corrective wave, then the trend is moving forward.</p><p>In order to identify the trend direction, traders observe "swing highs" and "swing lows," as well as the length of the trending and pullback waves. In an uptrend, the price will make higher swing highs and higher swing lows. During a downtrend, the reverse is true. Floating between lines of support and resistance on a price chart are trendlines' troughs and peaks.</p><p>Prices action trades also incorporate psychological and behavioral interpretations and subsequent actions, as determined by the trader. If, for example, a stock hovering at 580 crosses a psychological level of 600, then a trader may assume a further upward move and take a long position. Alternatively, some traders may assume a price reversal once 600 is reached and take a short position.</p>

<p>Reading price action is not about finding pin bars, outside bars, engulfing patterns, or any other names. It is about observing price bars as they form and understanding what the market has done and is doing.&nbsp;</p>

<p id="isPasted">Identify the trend of the price movement - whether it's bullish or bearish - and decide if you believe it's likely to turn.&nbsp;</p><p>The words bullish and bearish describe positive and negative market movements, respectively. A bullish trend is an upward trend, whereas a bearish trend is a downward trend.</p>