All price movement in Forex comes from bulls (buyers) and bears (sellers). When a currency pair moves up it is because there are more bulls than bears and vice versa. The Forex Market (and any market for that matter) is in a constant state of struggle between bulls and bears. Price action trading is about analyzing who currently controls price, bulls or bears and if they are likely to stay in control. If your analysis shows that bulls are in control and that they are likely to stay in control, then you can buy.

The straightforward definition of swing trading for beginners is that users seek to capture gains by holding an instrument anywhere from overnight to several weeks. The objective is to capitalize on a greater price shift than is possible in an intraday time frame. But because you follow a larger price range and shift, you need calculated position sizing so you can decrease downside risk. To do this, individuals call on technical analysis to identify instruments with short-term price momentum.

The study of price action has become the mainstay of traders as the internet age has merged trading prices being recorded on charts in real time. Traders love technical analysis because of the argument that all news or fundamental analysis is priced into the chart. Technical trading is like getting into the mind of the market to see what it may likely do next based on historical behavior as opposed to what it should do based on the news alone.

For professional traders, the analysis of support and resistance levels in the foreign exchange market is a key component of the technical analysis. In forex trading, currency pair prices often consolidate within a horizontal trading range, it is therefore important that one knows how to take advantage of these support and resistance areas. Support and resistance form an important aspect of trading the forex markets. They are not constant and continue to change constantly as the market dynamics continue to change.

Despite the fact that trading the forex market is not an easy task, there is a number of traders who are still able to consistently make profitable returns. Part of the reason for this fact is that they successfully use forex trading indicators. The existence of proven best forex indicators implies that the forex market is not a random walk, as some economic theories contend. The flaws of the human psyche mean that markets do not always behave rationally. The forex markets have a tendency to behave in certain ways under certain conditions.

The concept of price action trading embodies the analysis of basic price movement as a methodology for financial speculation, as used by many retail traders and often institutionally where algorithmic trading is not employed. Since it ignores the fundamental factors of a security and looks primarily at the security’s price history — although sometimes it considers values derived from that price history — it is a form of technical analysis.

A simple truth of trading is that markets are often moving sideways, neither trending up or down. The term is derived from the phrase choppy seas, where a boat will move a lot but not over any large distance as waves prevent it from moving any meaningful distance.

The forex market constantly is offering lower and higher quality trade setups. It is traders job to scan, recognize, select, enter and exit the ones with the best odds and reward to risk. Given the uncertain nature of the forex market, traders always face a dual choice -- high probability or high profit. The shorter you set your amplitude goals the higher the probability that you will achieve your target.

In simple terms, price action is a trading technique that allows a trader to read the market and make trading decisions based on the actual price movement on the chart, rather than relying on lagging indicators. This action is encompassed in technical and chart pattern analysis, which attempts to find order in the sometimes seemingly random movement of price.

Many successful traders attribute their success to their ability to skillfully predict forex market movements. Forex is one of the most volatile markets that presents a number of exciting investment opportunities for traders. Having a solid understanding of market mechanics is essential in helping you as a trader to fine-tune your entry and exit points as well as your stop loss levels.

Price action is a form of technical analysis that focuses solely on past prices that have traded in the market. As a trader, you will never truly know what will happen in the future. Any indicator or indication of what may happen in the future is just a possibility.

There are hundreds of thousands of market participants buying and selling securities for a wide variety of reasons: hope of gain, fear of loss, tax consequences, short-covering, hedging, stop-loss triggers, price target triggers, fundamental analysis, technical analysis, broker recommendations and a few dozen more. Trying to figure out why participants are buying and selling can be a daunting process.

The two primary approaches of analyzing the forex market are fundamental analysis and technical analysis. Fundamentals focus on financial and economic theories, as well as political developments to determine forces of supply and demand.