Introduction
Most retail traders rely heavily on indicators, signals, and trading tips. However, professional traders focus on one core element — price itself. This approach is known as Price Action Trading.
Price action trading involves analyzing raw market movement without indicator dependency. At Saashwat Fintech, we teach price action as the foundation of disciplined and risk-managed trading, especially in Indian markets like NIFTY, BANKNIFTY, and NSE stocks.
This blog explains price action trading in simple language, supported by practical Indian market examples.
What Is Price Action Trading?
Price action trading is a method where traders make decisions based on:
- Candlestick behavior
- Support and resistance levels
- Market structure
- Volume confirmation
Instead of predicting the market, price action traders react to what the market is showing.
Why Price Action Works Best in Indian Markets
| Reason | Explanation |
|---|---|
| Clean liquidity | Index & large-cap stocks |
| Less lag | No indicator delay |
| Works across segments | Equity, F&O, intraday, swing |
| Broker-friendly | No complex tools required |
Indian indices respond strongly to support, resistance, and psychology-driven price zones.
Core Components of Price Action Trading
1. Market Structure
Market structure tells you who is in control — buyers or sellers.
| Structure Type | Meaning |
|---|---|
| Higher High + Higher Low | Uptrend |
| Lower High + Lower Low | Downtrend |
| Equal Highs/Lows | Sideways |
Example (NIFTY):
If NIFTY makes higher highs and higher lows, only buy-side trades are preferred.
2. Support and Resistance (Most Powerful Tool)
Support and resistance are zones where price repeatedly reacts.
| Level | Trader Psychology |
|---|---|
| Support | Buyers enter |
| Resistance | Sellers enter |
Indian Example:
BANKNIFTY holding 46,000 multiple times indicates strong support.
Candlestick Patterns Used in Price Action
High-Probability Candlestick Patterns
| Pattern | Meaning | Usage |
|---|---|---|
| Pin Bar | Rejection | Reversal or continuation |
| Inside Bar | Consolidation | Breakout trade |
| Engulfing | Momentum shift | Trend entry |
| Doji | Indecision | Wait or confirmation |
Example: Bullish Engulfing (NIFTY)
| Candle | Observation |
|---|---|
| First Candle | Small bearish |
| Second Candle | Large bullish engulf |
| Signal | Buyer strength |
Trade is taken only at support with trend confirmation.
Role of Volume in Price Action
Volume validates price movement.
| Price Movement | Volume | Interpretation |
|---|---|---|
| Breakout | High | Genuine move |
| Breakout | Low | Fake breakout |
| Reversal | High | Strong shift |
Indian traders often ignore volume — professionals do not.
Simple Price Action Strategy (Indian Example)
Strategy: Support + Bullish Pattern + Volume
Conditions:
- Uptrend confirmed
- Price at support
- Bullish candlestick pattern
- Volume expansion
Example Trade (NIFTY)
| Parameter | Value |
|---|---|
| Support | 21,900 |
| Pattern | Bullish Engulfing |
| Entry | Above pattern high |
| Stop Loss | Below support |
| Target | Next resistance |
Risk Management in Price Action Trading
Price action fails without discipline.
| Rule | Purpose |
|---|---|
| Fixed SL | Capital protection |
| 1–2% risk | Longevity |
| RR ≥ 1:2 | Consistency |
| No overtrading | Emotional control |
Common Price Action Mistakes Indian Traders Make
- Trading patterns without context
- Ignoring trend direction
- Taking trades in the middle of range
- No stop-loss discipline
Price action is simple but not easy.
Why Saashwat Fintech Teaches Price Action First
At Saashwat Fintech, price action is taught as a core trading language, not a shortcut.
We focus on:
- Live Indian market charts
- Clean chart reading
- Fewer but high-quality trades
- Strong risk management
Our Fundamental + Technical Course (20 Days) covers pure price action with real case studies.
Conclusion
Price action trading is not about predicting markets; it is about understanding market behavior. Traders who master price action gain clarity, confidence, and long-term consistency.
Indicators can assist, but price never lies.