Price Action
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Price action trading is a methodology for financial market speculation which consists of the analysis of basic price movement across time. Put simply, price action is how price changes, i.e., the ‘action’ of price.
A trader can use a market’s price action to try and describe the human thought process behind a market’s movement. Every participant in a market will leave price action ‘clues’ on a market’s price chart as they trade their markets, these clues can then be interpreted and used to try and predict the next move in a market.
The simple stripped-down approach of price action trading, means there are no indicators on a trader’s charts and no economic events or news is used in making one’s trading decisions. Therefore, the implication is that it’s much simpler to just analyze a market and trade from its price action, rather than trying to decipher and sort the many different variables affecting a market each day.
Price Action and Candlestick Patterns have been integrated into the yummy profit app, eliminating the need for traders to keep track of charts and still receive confirmation signals of candlesticks and candlestick patterns.
This is a script that synthesizes a number of popular price action and candlestick patterns along with a trading strategy based on horizontal support and resistance. Scripts are used for learning and research purposes, and used to compare with price action signals on Yummy Profit app.
Support and resistance are two important areas in Price Action analysis and trading. After confirming the support and resistance zone line, waiting to confirm the appropriate candlestick pattern and execute the trade, set a reasonable stop loss and take profit, This is critical for compliance with your money management rules.
In the script, price action and candlestick pattern are denoted as follows:
Bullish Engulfing (BU) & Bearish Engulfing (BE)
Hammer (HM)
Hanging Man (MM)
Morning Star ( MS )
Evening Star (ES)
Tweezer Top (TZT)
Tweezer Bottom (TZB)
Shooting Star (SS)
Bullish Pinbar (PBBBU) & Bearish Pinbar (PBBE)
Doji Gravestone (GS)
Doji Dragonfly (DF)
Doji - Long legged (LL)
Spinning Top (ST)
Number of left candle to compare lowest/highest: Compare the high/low price of the current candle with the highest/lowest price of previous candles.
Number of left candle to calc avg body: Compare the average price of the current candle with the average price of previous candles
S/R Left Bars: The number of bars left hand side of the Pivot
S/R Right Bars: The number of bars right hand side of the Pivot
S/R Volume Threshold: The threshold value (%) for the volume oscillator
