Forex Price Action Basics - Lesson 1: What is Price Action Trading?
Price Action is a form of Technical Analysis which involves studying historical price data of Forex pairs to predict where future price might be. This study of price data is usually performed on price charts. Reviewing and studying price charts is the main concept of technical analysis. Price action analysis and trading using price action is widely used and accepted amongst Forex traders. Hedge funds, banks and other trading funds also use price action analysis.
Samuel Morton is a price action expert and is part of our Technical Forex Team. He is a professional Forex trader, a Forex trading mentor and
Forex Price Charts 101
The image below is a screenshot of a simple Forex price chart. The y axis (vertical axis to the right) graphs the Forex pair price, the x axis (horizontal axis on the bottom) graphs dates and time.
The Forex price chart shows historical price data of the Forex currency pair AUD/CAD (Australian Dollar/Canadian Dollar). Price is displayed using a line so this chart is called a line chart or a line price chart. Some Forex traders use line charts for their price action analysis but it is more common to use a Japanese Candlestick Chart. These will be covered in lesson 2.