Price action describes the characteristics of a security's price swings. This movement is often analyzed in light of recent price swings. To put it another way, price action is a trading method that allows a trader to read the market and make subjective trading decisions based on current and actual price movements rather than only on technical indicators.

To assist us in making better trading selections, price action trading uses previous prices (open, high, low, and close). Unlike indicators, fundamentals, or algorithms, price action tells us what the market is doing rather than what you think it should do.

Price action trading assists us in better understanding the market and making lucrative trading decisions. Using the price action trading strategy may allow us to pinpoint our inputs and exits with more accuracy. When it comes to price action trading, there are Four things to consider.

• 1. Market Structure
• 2. Area of Value
• 3. Entry Trigger
• 4. Stop Loss

Market cycles occur in all financial markets. It's a natural cycle that will undoubtedly build and dissipate over time. There are four stages to every market cycle. Let's take a look at each one separately.

The interval between a market's high and trough and its phases is referred to as a "crypto market cycle." All financial markets experience market cycles. It's a natural sequence of cycles that will inevitably develop and go as time passes. Every market has cycles, which are divided into stages. Prices increase, peak, decline, and finally bottom out, signaling the start of a new cycle.

Novice traders may not realize that markets are cyclical, and as a result, they frequently fail to plan for the conclusion of the present market cycle. Furthermore, even if we understand market cycles, predicting the peak or bottom of a specific cycle can be difficult. To optimize our trading profits, however, we must comprehend the cycle. Let's have a look at the four major stages of a normal market cycle and how to spot them.

• Accumulation Phase (Range market in a downturn)
• Mark-Up Phase (Bullish Market)
• Distribution Phase (Range market in an upswing)
• Mark-Down Phase (Bearish Market)

An area of value on our chart is a location where prospective buying or selling pressure might emerge. We need to talk about two things to figure out what the 'area of value' is.

• Support and Resistance Levels
• Moving average

Trading level support and resistanceare two of the most talked-about aspects of technical analysis. These phrases are used by traders to refer to price levels on charts that operate as barriers, preventing the price of an asset from being pushed in a certain direction as part of evaluating chart patterns. We'll go into more detail on support and resistancein our upcoming post, but for now, a fundamental knowledge of the concepts will suffice.

• Support: an area of value where potential buying pressure could step in and push the price higher.
• Resistance:an area of value where potential selling pressure could step in and push the price lower.

The moving average (MA) is a straightforward technical analysis technique that smooths out price data by calculating an average price that is continually updated. The average is calculated over a certain length of time, such as 10 days, 20 minutes, 30 weeks, or any other period selected by the trader.

When a market is trending, the price may respect the moving average as it searches for prospective buying or selling pressure, which works as a value area. It's not a bad idea to look for purchasing chances when the price retraces towards the moving average.

When it comes to entry triggers, we have far too many strategies and tools to choose from. But I'll teach you how to utilize the greatest and easiest tool as your entry trigger right now. As an entrance trigger, we may utilize one of two methods.

• Break of structure
• False Break

The structure break is a reversal price action pattern that enables us to enter the beginning of a new trend with little risk. Here are some things to watch for:

• An upswing approaching resistance as seen over a longer period because we want the resistance area to pique the interest of sellers over the longer period,
• The price fails to make a higher high but instead makes a lower high, providing us with a reference point for determining our stop loss.
• Take a short position on the swing low or support break.

A false break is a reversal price action pattern that allows us to buy low and sell high. Some things to keep an eye out for are:

• Look for a strong bullish trend into resistance; larger candles are better.
• Allow the price to break over the resistance's extreme highs, causing additional traders to purchase the breakout.
• Look for a false break pattern in which the price reverses abruptly and closes below resistance.
• Enter a short position at the opening of the next candle.

We've learned how to assess market structure, what area of value is and how to calculate it, and how to utilize the entry trigger to enter or exit a trade. Even with all of this information, a loser may emerge. That is why knowing when to exit our deal before things deteriorate is critical.

In this scenario, our last tool, the "stop-loss," is used to safeguard our trading account from losing all of our money on a single deal. So, where should our stop loss be placed?

Simply put, our stop loss should be placed at a level that will invalidate or remove our trading strategy if the price reaches it. If we purchase at support and anticipate buying pressure to drive the price higher, our stop loss should be below the support region. If the price falls below the support level in this situation, it indicates that our assumptions were incorrect, and we should exit the trade before it becomes too late.

So, should we put our stop loss beneath the support area or leave it some breathing room? To avoid stop hunting, we need to give it a 1 ATR (Average True Range) buffer below support.

Here's what we found out:

• The market structure determines whether we should purchase, sell, or stay away from the markets.
• We may utilize a value region, such as support and resistance or a moving average, to help us determine where to buy or sell.
• A price trend entry signal, such as price rejection or candlestick patterns, advises us when to buy or sell.
• We should set our stop loss at a level that, if reached or when our value area is "destroyed," will render our trading arrangement null and void.