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Price Action for Dummies

Learn to read price charts - the basics of Forex Price Action & Technical Indicators

Forex price action trading course

"Price action is the foundation of technical analysis. Knowing how price moves and behaves is paramount to becoming a successful Forex trader.

Learn price action and technical analysis for FREE. See my free online course below..."

Forex Price Action Course - An Introduction to Price Action

What is price action

What is price action in Forex?

​The prices of currencies are forever changing. Currency pairs move up and move down. These movements are displayed on charts called price charts. The historical price movements and patterns formed on price charts are called price action. Price charts show how price has acted in the past, hence the term price action.

 

Price charts show a Forex trader a historical record of price movements and behaviour. They also show price patterns, price highs, and price lows.

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Price action is the foundation of technical analysis. It includes:

 

1. Identifying the current price direction

2. Identifying high and low points of price

3. Identifying patterns formed by price

Forex Price Chart Example:

Why use price action?

forex price chart example

Price Action Continued

​Price action can help a trader predict where future prices will be. This increases the chances of a trader making money from Forex trading.

 

I am a professional Forex trader. I use price action daily. It plays a significant part in my Forex trading decisions.

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Price action is universal. Once learned, you can use price action to trade other financial markets, not just Forex.

Trading using price action

This step-by-step price action trading course will teach you the basics. Watch the video below for a more detailed introduction. Then, carry on with the program below. The course is all online, 100% free, and includes a free price action PDF! 

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You have joined this series on step 2. If you you like to start from the beginning, then go to Step 1 of Forex Trading Basics.

Terminology Logo

Key Price Action Terminology

Price Action - the historical movement of price
Price Chart - a chart displaying historical price data 
Price Action Trader - a trader who analyses price action to forecast future price direction​

Price Action Basics

Price Action Tutorial One

Key Content:

​​

  • Course overview​

  • What is price action

  • Why use price action

  • What are price charts

  • Price chart example​​

price action trends

Price Action Basics - Trending Markets Explained

​When the price of a Forex pair moves in a generally upward direction, this is called an uptrend. Sometimes, this is referred to as a bullish market.

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When the price of a Forex pair moves in a generally downward direction, this is called a downtrend. Sometimes, this is referred to as a bearish market.

Forex Pair Trending Examples

Forex uptrend example
Forex downtrend example

Swing Highs and Lows

Trends have specific characteristics. For example,  price forms swings when a currency pair is trending.

 

Uptrends form a series of higher price swings. These are called higher highs and higher lows.

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Downtrends form a series of lower price swings. These are called lower highs and lower lows. 

 

Learning how markets trend is critical to successful price action trading.

Forex uptrend with swings
Forex downtrend example
Terminology Logo

Key Price Action Terminology

Bullish - when price is trending upward
Bearish- when price is trending downward 
Price Swings - the swings/steps/waves price action forms when it trends​

Trends

Price Action Tutorial Two

Key Content:

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  • Uptrends 

  • Downtrends 

  • Swing highs 

  • Swing lows 

  • And more​​

Practice what you're learning!

Get a free demo trading account (including free price charts)

Need help?
Read my
getting started with a demo account guide

Once logged in, go to my MetaTrader Guide

! sign

Price Action Basics - Ranging Markets Explained

price action when price ranges

​If a currency pair is not trending, it could be ranging.

 

A ranging market means that the price is moving sideways. It is not bullish or bearish. Generally, a range means that the price is moving between two areas of the market. A ranging market can also be called a sideways market, market indecision, or market consolidation.​

Ranges

Forex Price Action Course - Japanese Candlesticks Explained

The majority of Forex traders use Japanese candlesticks. They play an essential part in Forex price action trading.

 

They may look daunting initially, but they are relatively easy to understand.

 

A Forex trader analyses - "reads" - candlesticks. Being able to read Japanese candlesticks can help a Forex trader. They can indicate where future prices might be. If a trader knows where future prices may be, he can use this to his advantage and make money!

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Each candlestick has a candle body and candle wicks. The opening and closing of price creates the candle bodies. The high and low price forms candle wicks.

 

Learn more about Japanese Candlesticks and how to read them in my online video below.

japenese candlesticks explained
engulfing candles explained
pin bars explained
support and resistance explained
Japanese Candlesticks
horizontal support and resistance explained
diagonal support and resistance explained
Price action patterns explained

Trading Using Price Action - Engulfing Candles Explained

Certain Japanese Candlesticks can signal future price direction. These candlesticks are called candlestick setups. Sometimes, setups are referred to as triggers or price action setups.

 

Engulfing candles are a price action setup. They are one of the most simple and commonly used setups.

 

The next lesson in this free trading course will teach you what an engulfing candle is and how to use it in price action trading. 

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Ready to practice? You get free price charts at TradingView. Alternatively, try a free demo account with a Forex broker.

Engulfing Candles
price action pdf

Trading Forex Using Price Action - Pin Bars Explained

​Another standard price action setup is the Pin Bar.

 

These setups are also called kangaroo tails, hammers, hanging man, and shooting stars.

 

Pin bars are another simple yet effective price action setup.

Price action setup

Forex Price Action Course - Support and Resistance Explained

​As price moves, it forms clear levels and areas of the market of support and resistance.

 

Support is a level or area below the current price that keeps the price up. These areas have historically been a lot of buying or market bulls. Support levels indicate where buyers potentially are. In support areas, the price could become bullish.

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Resistance is a level or area above the current price that keeps the price down. These areas have historically been a lot of selling or market bears. Resistance levels indicate where sellers potentially are. In resistance areas, the price could become bearish.

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Support and resistance can form from historical price reversals - where price has historically reversed. These reversals can indicate where the price may change direction in the future. Technical indicators and psychological levels can also form support and resistance.

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There are different types of support and resistance. These are horizontal support and resistance, diagonal support and resistance, psychological support and resistance, and dynamic support and resistance. 

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When support is broken, it becomes resistance. When resistance is broken, it becomes support.

 

Do you need clarification? Roll on the videos! 

Support and resistance
Horizontal support and resistance
Diagonal support and resistance

Would you rather have a one-to-one tutor?

Sign up for my
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Forex Price Action Course - Price Patterns Explained

​As price moves and trends, it can create patterns.

 

Price action forms patterns in the Forex market. These patterns can indicate the future price direction, like Japanese Candlestick setups, support, and resistance. 

 

Common price action patterns include trend and consolidation, trend reversal, and trend continuation patterns.

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The most common trend reversal patterns are:

 

  • Double-top patterns

  • Double bottom patterns

  • Head & shoulders patterns

  • Inverted head & shoulders

 

The most common trend continuation patterns are wedges, triangles, and breakouts. 

 

Learn more about price action patterns in my free price patterns guide video below.

Price Action Patterns

Download my FREE Forex Price Action PDF

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technical analysis

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DISCLAIMER

 

*There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Samuel Morton, Actual Forex Trading, SM Web Capital, and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. 


**All services and products on this website (and all services and products offered by SM Web Capital Ltd) are for educational purposes only. SM Web Capital Ltd and Actual Forex Trading are not an investment service and does not offer financial advice. No client funds are managed. 

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***This site and all it's products are for educational purposes only. This site or Samuel Morton does not need to be registered with the FCA or any financial regulator. 

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