WHAT IS PRICE ACTION TRADING & HOW DOES IT WORK?
Here’s the deal: Most traders think the price goes up
because there are more buyers than sellers. Nope.
Here’s why.
Let’s say there are 100 buyers, each wanting to buy
one share of Google. At the same time, there’s one
seller, but the seller wants to sell one million shares
of Google.
What do you think would happen to the price?
Would it go up or down? It’ll go down because the
selling pressure is greater than the buying pressure.
This has nothing to do with there being more buyers
than sellers because, in this case, there are more
buyers than sellers. But the price is still going down
because the selling pressure is greater.
And this is what price action trading is about:
Understanding the imbalance between buying and
selling pressure so you can better time your entries
and exits—and improve your trading results.
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WHAT IS PRICE ACTION TRADING & HOW DOES IT WORK?
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