What Is Price Action? Price Action Explained At CAPEX.com

If you are looking to understand what price action is, then this is the page for you. There are many facets that contribute to successful trading in the long-run and getting to grips with price action is certainly one of these – it’s the art of interpreting price movements, patterns, and trends, helping you make informed decisions.

Whether you are a veteran trader or just beginning your journey, keep reading as we unpick price action’s meaning and give you the insight that will help with your online trades at CAPEX.

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The meaning of price action

Price action is a way of looking at the price of a security over time. It looks at the action of the price over a period of time, making it an ideal way to decide if a trade should be conducted; this is in contrast to relying on technical indicators.

Successful price action trading relies on you identifying key patterns in the price data. The reading of patterns such as breakouts and triangles is done to try and identify where the price of a security could be heading next. Price action trading could work on anything from commodities to stocks and most of the instruments featured at CAPEX, the best CFD online broker.

Why you should try price action trading

Utilising price action in trading gives you a greater understanding of an asset’s performance over the medium and long-term. As some can be extremely volatile, this should be one of multiple tools as you analyze the price charts and ‘candlesticks’ to see where the price of an asset could be heading next. Price action is a flexible trading method and it doesn’t require a huge amount of research compared to some trading strategies.

While price action trading is subjective by nature, it is still something that can be tried by even those relatively new to online trading. Plus price action trading gets even easier when you try this strategy on a range of assets like stocks and commodities in the form of CFDs at our CAPEX online broker site. thanks to our world-class platforms.

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Price action explained

Most people would have price action explained as being the way in which a security’s price changes over time. It’s a method by which traders use data for trading a range of assets from stocks to commodities and Forex pairings. Such a form of technical analysis focuses on how the price of a security has changed in the past to make future decisions about whether to buy or sell that security. Such a procedure is known as price action trading and it’s something that can successfully be done with our CFDs here at CAPEX.

Price action works in a different way from other trading methods: you won’t have to rely on specialist knowhow such as a moving average or Bollinger bands. Instead, you’ll be focusing on the raw price data and hoping to find some kind of order from within the chaos. As always, success is never guaranteed but price action should always be taken into account.

Using price action

Now that you have a basic overview of price action and how it can be used in trading, let’s move on to the practicalities of incorporating it into your market speculation.


Price action trading is based on being able to spot the key patterns that identify when you should enter or exit your trade. You should be able to spot when a breakout is taking place as this means that the price of a security is starting to behave in different ways to what has occurred previously. This is the basis of price action trading as you’re ultimately trying to spot unusual patterns in the price data – whether good or bad for the action you plan to take.

Candlestick charts, like the ones you can use at CAPEX, offer you a particularly strong way of identifying price trends. This is because you’ll be able to visualize the price movements through displays of the open, high, low and close values. Understanding what certain candlestick patterns mean such as the Harami cross and the three white soldiers are an excellent way of building expectations for where the value of a security is heading next.

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Trading with the best price action strategies

We can’t answer the question of “What is price action?” without taking a look at some of the best price action strategies. The first thing that you can do is to try and get your price data as clearly presented as possible. This means removing most of the other kinds of technical data that can clog up your display. As a result, you should be left with the basic price bars of the chart and will be ready for when certain patterns emerge.

Above all, successful price action trading strategies will rely on you correctly identifying patterns and predicting where they could head next. The ascending triangle pattern has proven to be particularly useful as it can predict potential breakouts. This is because the pattern suggests that several efforts have been made to create a breakout and that the next major buying pattern could be more successful. Also, don’t forget that you can learn trading at the CAPEX Academy and test new strategies when trading with a demo account, which we provide with all accounts at CAPEX.

Why price action trading is so popular

Now that we’ve identified the key features of price action, it is easy to see why it is so beloved by traders. After all, price action trading gives you a fast way to find better entries and exits compared to relying on technical indicators. It’s also true that this method of trading requires a fair amount less research time and it’s nicely flexible to be used in conjunction with other strategies.

At CAPEX, we give you a simple way to put your price action trading into practical use. This is because we feature a range of detailed price charts that help you plot the real-time price changes and identify what breakouts or triangles there may be in the price data. All of which should give you a fast and simple way to find those entry and exit points that give you maximum value on your trades.




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The downsides of price action

The first thing that you should realize is that price action can be interpreted in multiple ways which means it shouldn’t be the only tool used for trading at CAPEX. One trade might see a pattern as being bullish, whereas another trader might see it as being part of a bearish trend – the subjective nature means it is not an exact science.

Plus it’s a trading method that might require a fair amount of effort to pull off successfully, as you won’t be able to automate your trades for reading the price action patterns. But as long as you realize the fact that price action trading is just one tool at your disposal, you’ll find it to be a great way to guide your online trades at the best Forex trading platform.

What is price action? The conclusion

We hope that this page has enhanced your knowledge on the meaning of price action. You’ll see that it’s a powerful way of focusing your attention on the price of a security over time, and it does away with other technical indicators. As such, price action trading can be used in a flexible way to get better entries and exits than you’d get if you relied upon indicator-based trading. It is best used alongside other tools and strategies.

While price action trading requires plenty of skill and is notoriously subjective, it offers you an excellent way of paring your trades down to the essentials. Therefore, this tactic is perfectly suited to trades on all of the CFDs featured at CAPEX. So now that you have a solid understanding of price action, you just need to sign up and start incorporating it into your trading!

What Is Price Action? – FAQs

Price action is not the most complex strategy for traders, but it still requires some research to make sure you get the most out of it. Below we have answered some of the most popular questions.

What is price action in Forex?
What are the best price action trading strategies?
What’s the difference between price action vs technical analysis?
What’s best between price action vs indicators?
Which price action patterns should I pay attention to?