---
title: 'Beginner''s Guide to Price Action Trading'
source: 'https://youtube.com/watch?v=NnEHcQsU3is'
video_id: 'NnEHcQsU3is'
date: 2026-07-14
duration_sec: 957
---

# Beginner's Guide to Price Action Trading

> Source: [Beginner's Guide to Price Action Trading](https://youtube.com/watch?v=NnEHcQsU3is)

## Summary

This video provides a beginner's guide to price action trading, explaining that price action refers to the information conveyed by each price movement on a chart. The presenter emphasizes that price action is the foundation of technical analysis and can be interpreted using Japanese candlestick charts to understand market psychology and make informed trading decisions.

### Key Points

- **Definition of Price Action** [00:41] — Each price movement is an action created by trades. Price action refers to the information that price provides in each movement.
- **Reading Price Action with Candlestick Charts** [01:50] — Japanese candlestick charts are the easiest way to visualize price action because they show open, close, high, and low over a period.
- **Importance of Past Price Action** [03:56] — The chart shows traces left by past price action, forming a market structure. Focus on context, not just the current candle.
- **Price Action as Basis of Technical Analysis** [04:53] — Price action suggests all information (sentiment, liquidity, fundamentals) is reflected in price. Understanding it reveals market psychology.
- **Nothing is Random in Markets** [06:00] — Every price movement has a reason, even if not immediately understood. Movements may correspond to higher or lower timeframes.
- **Identifying Important Zones** [07:09] — Use past price action to identify support/resistance zones. Wait for price reaction at these zones to make trading decisions.
- **Price Action Works Across All Timeframes and Instruments** [12:16] — Price action analysis is universal; examples include Bitcoin on 15-min, Tesla on 5-min, and EUR/USD on 1-hour charts.

### Conclusion

Price action is a powerful analysis tool that helps traders understand market dynamics and make informed decisions. It works on any timeframe and instrument, but traders must accept uncertainty and practice consistently to profit.

## Transcript

Hello traders, welcome to a new video. This time, I'm going to share with you a beginner's guide on price action. I'm
sure you've heard the term "price action" many times, and I believe that most of the time it's not well explained or is simply used to sell a course or service.
However, in reality, it probably does n't have a complete understanding of what price action actually is. So pay attention because I'll be explaining it in this video so we can better understand what price action is.
Let's break it down. We can consider each price movement as an action. What we consider each price movement as an action. What we see here is the tick chart. Each movement we see on this chart is
created by trades or traders executing their actions. As we can see, executing their actions. As we can see, for example, the price goes up, enters a range, goes down, and goes up again. So we can see how the price is continuously
moving. Each of these movements is action. That means this is price action. Because of this, we can say that price action refers to the information
that the price provides us in each of its movements. This action is... each of its movements. This action is...
can read and analyze this map to determine the likely direction in which the price might move. So, this is the information we use to our advantage to make decisions about our trading. There are
multiple ways to read price action; however, I believe the easiest way is by using the Japanese candlestick chart, as it allows us to visualize price action better. Thanks to the
price action better. Thanks to the the open, the close, the high, and the low that the price reaches during a period of time. On this right side, we have the Japanese candlestick chart,
a one-minute chart, and on the left side, we have the line chart. In the Japanese candlestick chart, we can see, for example, the candle's open, the candle's close, the high it
reached, and the low it reached. This information is given over time and encapsulated in a... In this case, as I mentioned before, the candlesticks are one-minute candlesticks. However, in a line chart, we can't encapsulate
that time frame, so it's more difficult to see the information about highs, lows, closes, and opens of the price. In conclusion, the Meanwhile, in a candlestick chart, we can find more information to
better interpret price movements. It's not necessary to interpret every single price movement in a tick chart, nor is it necessary to interpret every single price movement
while a Japanese candlestick is forming. We are human beings, and due to our nature, it's difficult for us to react to such rapid price changes. It's difficult for us to interpret them quickly and make
decisions. Because of this, it's not a good idea to focus on interpreting the movements of each tick of the price. In fact, just looking at those movements is useless. It 's not enough information to make decisions. Reading
only the current price movements is pointless. It's very important that we understand that the chart shows us the traces that price action has left in the past. We can see it as traces or as a map, and those
traces or that map are the structure of the entire market.  This set of all the information that shows us the price of the past and present provides us with a complete view of the market. And that allows us to analyze it
better and, consequently, allows us to make better decisions to operate more effectively. Again, let's not forget that we shouldn't focus only on the creation of the current candlestick. The important thing is to use
all the context created by price action to analyze that chart and interpret it better. Now, I need you to pay close attention to this: "pa" means price action, and price action is the basis
of technical analysis. Price action suggests that all the Price action suggests that all the available information, including market sentiment, liquidity, and fundamental factors, is already
reflected in the price and, therefore, is reflected in the therefore, is reflected in the chart. Because of this, if you understand price action, you can obtain extensive information about
market psychology and thus make better buy or sell decisions. Understanding what we have just explained, we can then deduce that, for example, then deduce that, for example, candlestick patterns, resistance and
support levels, trend lines, now know as Smart Money concepts or themes, such as liquidity areas and
blocks of...  Orders and other concepts are created by price action. In other words, to summarize, each of these things is created by price movements, and we can interpret them on the price chart.
Something very important I'd like to mention is that everything happens for a reason in the market; nothing is random. Sometimes we can't understand what's happening at that moment, and we have to wait for
interpret it better. However, just because we can't know what's happening doesn't mean that price movements are random. We have to understand that there will always be movements that correspond to other
timeframes. These timeframes can be higher or lower than the one we're currently viewing because there are multiple timeframes, and we're human beings. We can't constantly analyze all of them,
so it's only valid to focus on one. However, it's important to understand that no movement is random; everything happens for a reason, whether it's a reason within the timeframe we're
viewing or a reason within a higher or lower timeframe. Because of this, as I just explained, there is the price...  The chart gives us a small idea of ​​where
the next move might be. However, it's important to accept that we don't know for sure how far that next price movement might go. So, our job is to identify the information the
price has been giving us in the past, interpret that information, and wait to see how the price reacts when it reaches those important zones we 've identified. For example, when we're only looking at this
part of the market, the price chart is showing us— let's say here—a support area, an area we can use in the future. We notice that the price drops sharply and breaks through that area.
Later, the price reverses and rises to react to that area. When the interpret and see how it reacts, trying to move downwards. But we can also interpret that this
previous price movement was too strong. So, that it's more likely the price will try to push a little further upwards. blocked by this small support and resistance zone where the price
tries to push upwards again. This push, in the first place, could give us a clue that perhaps the price... Yes, it tries to keep rising. Let's remember this yellow box
drawn here; it's an important zone. But if the price manages to keep rising, it keeps rising, it moves to the next zone. And so it will try to keep moving towards another important zone where the price would encounter
sellers and could stop rising. However, we see that after this bullish candle, the price can't keep rising strongly. On the contrary, it immediately returns in the next candle; the buyers try to dominate again,
and the price can't keep rising. They immediately return in the next candle, and progressively, and in the end, the sellers manage to dominate and counteract all this previous upward movement. Because of that, the
price ends up falling, moving towards another important zone, such as this support area we have here. And in that case, since we know price action, we know that the price will have difficulty breaking this
support area. If the price manages to break the support area, then we can suspect that it may try to move to a significant level lower. But as I uncertainty is that anything can happen in the market, and
our job is to identify those important zones.  For example, here we would have identified this important area or this important price support zone, and with the help of current price movements, we
realize how difficult it is for the price to break through that support. Thanks to execute small trades. For example, here's a buy order, waiting for the price to reach at least this
resistance area. So, with the help of price action, we identify important zones. With the help of price action, we see how the price reacts when it reaches these zones, and we interpret these movements to
make decisions about the trades we are going to carry out. Uncertainty is part of the analysis; it's part of the work we are doing. For This would be an important support and resistance zone, and we can see how
the price breaks through that support/ resistance zone very strongly. price could try to continue falling. However, we notice how here it begins to be rejected very strongly at some important level. Down here, the
price tries to keep pushing down and immediately reverses. down and immediately reverses. difficulty the price has in breaking through, and then we can observe how the price
we're already interpreting that, due to this movement, it's most likely that there aren't enough sellers interested in entering here, and that the price has to then complete the next move. So, in this case, we would have
buy, hoping that the price at least reaches a significant level, like this box we've drawn here. That line is an important level, and reaching that area. But instead of finding more sellers there and moving
down, the price manages to break through that zone. When we see that it manages to break through would try to move to a next level, and that next level would be this identifying here. And we see how the price continues to rise until it reaches that
resistance and reacts. We see how the price reaches the rise, if it has a lot of strength, the price would try to keep rising. But instead of doing that, we see how the price struggles, and
sellers start to enter in that important area. So, here again, the current price action is reacting to the past price action where we've interpreted zones.  important and then
We make decisions, for example in this case, to sell, since we realize structure is a range and that the price will try to move downwards. In conclusion, the price will always show us uncertainty. Our job is to
read the past of the chart to understand the structure, and with the support of the current movements, we will make decisions. Finally, I want to mention that price action works and is used in the same way in any
timeframe and in any financial instrument. Here I give you three different charts as an example. I want you to look at them and tell me what instrument you think these charts belong to. Maybe they belong to the Euro/
Dollar, maybe they belong to the Euro/ Japanese Yen, or maybe to the British Pound/Canadian Dollar. Maybe they belong to some cryptocurrency or some stock. Perhaps it is a one-minute timeframe, maybe a 10-minute, 20-minute, 30-
minute, one-hour, or one-day timeframe. So, can you tell which instrument and which timeframe these charts belong to? Well, it's not very difficult to know. So we can observe how price action is the
same in any timeframe, that is to say... We can read and interpret it in the same way regardless of the timeframe and the instrument we are looking at. For example, this chart here is Bitcoin on a 15-
minute timeframe, the chart on the left is Tesla on a Tesla on a 5-minute timeframe, and the one on the right is the euro/ dollar on a one-hour timeframe. So we can see that no
matter the timeframe or the instrument, we will always analyze and interpret price action in the same way. Very well, traders, let's reach our remember that price action is any movement that the price
makes and is reflected on the chart. Let's not forget that price action is a very powerful analysis that helps traders understand market dynamics and also helps them make informed decisions to
trade. Price action works on any timeframe and in financial instrument. And let's not forget that price action doesn't mean we can predict market movements with a 100% probability of success.
We must assume that in this business there will always be a degree of uncertainty. To finish, I want to leave you with a recommendation: by acquiring the appropriate knowledge and  Above all, by constantly practicing
to gain the necessary experience, we can become competent in price action analysis and use this information to our advantage to profit. Here on the Binary Teach YouTube channel, you'll
find theoretical lessons to help you strengthen your knowledge in this area. You'll also find psychotrading lessons where you'll learn about the emotions that can affect you in the
market and what you can do to prevent those emotions from working against you. You'll also find practical exercises and activities, including some live price action analyses that I perform, as well as
activities where you can observe the market, analyze it, and make decisions. Well, traders, I'll leave this lesson here. I hope you now understand what price action is and why it's so interesting and useful for
analyzing the market and making better trading decisions. Well, traders, I'll say goodbye. See you in the next video. Take care, traders. See you!
next video. Take care, traders. See you! [Music]