Introduction to Price Action & Reading Clean Charts
Indicators lag, but price action is real-time. Learn how to read market psychology directly from clean charts using candlestick dynamics.
01. Understanding Candlestick Psychology
A candlestick is not just a green or red box. It represents a battle between buyers and sellers over a specific timeframe. The relationship between the open, close, high, and low tells a story.
Large candle bodies show strong momentum and order flow control. Long wicks (shadows) represent price rejection and sudden changes in market sentiment. Understanding this structure allows you to read price context directly.
02. Mapping Swing Highs and Swing Lows
Markets do not move in straight lines. They move in waves, creating swing peaks and troughs. Mapping these points is the foundation of mapping market structure.
A swing high is created when a high candle is bordered by at least two lower highs on both sides. A swing low is created when a low candle is bordered by two higher lows on both sides. Identifying these areas highlights key supply and demand zones.
03. Decoding Trend Structures
A classic uptrend is defined by a sequence of Higher Highs (HH) and Higher Lows (HL). A downtrend is defined by Lower Highs (LH) and Lower Lows (LL).
By tracking these structures, you can align your execution bias with the dominant flow. When price fails to make a new high and breaks below the previous swing low, it indicates a structural shift, alerting you to potential reversals.