page_title: Price action trading
section_title: Trend and range definition
hierarchical_section_title: Price action trading / Trend and range definition
context_page_description: The price action is a method of billable negotiation in the analysis of the basic movements of the price, to generate signals of entry and exit in trades and that stands out for its reliability and for not requiring the use of indicators. It is a form of technical analysis, since it ignores the fundamental factors of a security and looks primarily at the security's price history. What differentiates it from most forms of technical analysis is that its main focus is the relation of a security's current price to its past prices as opposed to values derived from that price history. This past history includes swing highs and swing lows, trend lines, and support and resistance levels.
  At its most simplistic, it attempts to describe the human thought processes invoked by experienced, non-disciplinary traders as they observe and trade their markets. Price action is simply how prices change - the action of price. It is readily observed in markets where liquidity and price volatility are highest, but anything that is bought or sold freely in a market will per se demonstrate price action.
context_section_description: This concept of a trend is one of the primary concepts in technical analysis. A trend is either up or down and for the complete neophyte observing a market, an upwards trend can be described simply as a period of time over which the price has moved up. An upwards trend is also known as a bull trend, or a rally. A bear trend or downwards trend or sell-off (or crash) is where the market moves downwards. The definition is as simple as the analysis is varied and complex. The assumption is of serial correlation, i.e. once in a trend, the market is likely to continue in that direction.
  On any particular time frame, whether it's a yearly chart or a 1-minute chart, the price action trader will almost without exception first check to see whether the market is trending up or down or whether it's confined to a trading range.
  A range is not so easily defined, but is in most cases what exists when there is no discernible trend. It is defined by its floor and its ceiling, which are always subject to debate. A range can also be referred to as a horizontal channel.
caption: A 'bear' trend where the market is continually falling, interrupted by only weak rises.
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