What is Price Action?

es futures chart price action study
Price action in the futures market refers to the movement of prices for futures contracts over a given period of time. It is a key concept in technical analysis, which involves using past price movements to predict future price movements.

In the futures market, traders and investors can take either long or short positions based on their expectations of future price movements. A long position means that the trader expects the price of the futures contract to increase, while a short position means that the trader expects the price to decrease.

There are various factors that can impact price action in the futures market, including supply and demand, economic news, and the market reaction to news events. Different investors will DEFEND certain prices with a vengeance thus protecting their position. They do this at KEY levels you will learn how to identify on your chart. We play the BOUNCES off those lines.

We use price action to identify trends and potential trading opportunities based on that trend. By studying price action, traders and investors can gain a deeper understanding of market conditions and make more informed decisions about when to enter or exit a position.

Different Strokes For Different Folks

It is difficult to determine the most profitable way to trade price action, as it will depend on the individual trader’s risk tolerance, trading style, and market conditions. Some traders may find that a long-term approach, such as trend following, is the most profitable for them, while others may prefer a more short-term, scalping strategy.

One important factor to consider when trading price action is risk management. Proper risk management involves setting stop-loss orders to limit potential losses, as well as keeping position sizes appropriate relative to your account size and overall risk tolerance.

It is also important to continually educate yourself and stay up-to-date on market driving news events. See my article on Pre-Market Checklists. Knowing when NOT to trade in price action is key.

Ultimately, the most profitable way to trade price action will depend on your individual circumstances and goals. It may be helpful to try out different approaches and see what works best for you.

Price Action is Like Dancing to Music

The best analogy I can use is… listening to price action and making a trade is similar to listening to music and knowing how to dance to it. Some people do it amazingly and others go the chicken dance to Chubby Checker’s “Lets Twist”.

I listen to the price action. Price actions tells me what to do. It tells me how much leverage to use in this upcoming trade. Which can range from ZERO contacts to 20 or 30 MES contracts. Price action tells me what to do.

Without price action analysis, a trader can easily make impulsive trades or to get swayed by emotions. A well-thought-out understanding of price action as it unfolds LIVE is the LAST skill traders seem to develop. That is the power of trading in a group, it is EASIER stay disciplined and make more informed decisions.

Sample Videos

Commodity Futures Trading Commission. Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. Testimonials Disclosure: Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success. Risks Associated With Trading IMPORTANT DISCLAIMER By continuing with the Core Strategy Academy, Discord, and Zoom you also acknowledge and accept the following information: The material in this course is general in nature. It does not constitute personal investment advice or personal trading advice. Any advice provided is general advice only and does not take into account an individual's risk profile or financial situation. The author of this course content is not legally qualified to give personal investment or trading advice. Although the author is an experienced and consistently profitable trader and the information offered within this course is given with the best intentions and made to be as accurate as possible, the author has no idea what your financial situation is and everyone has a different tolerance for risk and different investment goals. The purpose of this course is to teach you how use technical analysis to assist in your trading, it is not intended to teach you how to trade even though many lessons do share practical techniques based on real-life trading experience. The lessons in this course are provided as hypothetical trading examples, not necessarily ones that are profitable or robust. While the creator of these lessons has used some of these techniques to generate profits in the past, it is not guaranteed that you will experience the same results and past performance is not indicative of future performance. Trading involves the risk of loss as well as the potential of profit. It is generally advised by successful traders to never risk more money than you can afford and are willing to lose - both on a trade-by-trade basis, and a portfolio basis. You should seek independent financial advice from a qualified professional in deciding if trading is appropriate for you. Please also consider the appropriateness of that professional advice in light of your own objectives, financial situation or needs. ALL MATERIAL HAS BEEN PREPARED BASED ON INFORMATION BELIEVED TO BE ACCURATE AT THE TIME OF PUBLICATION. SUBSEQUENT CHANGES IN CIRCUMSTANCES AND THE MARKET MAY OCCUR AT ANY TIME AND MAY IMPACT THE ACCURACY OF THIS INFORMATION. PAST RESULTS ARE NOT INDICATIVE OF FUTURE PERFORMANCE. Information containing hypothetical or simulated results has limitations and may not represent actual trading. Since the trades presented in simulated backtests have not actually been executed in the market, the results may under or over-compensate for the impact (if any) of certain market factors, such as lack of liquidity, large spreads, slippage, commission costs etc. NO REPRESENTATION IS MADE THAT ANY TRADING STRATEGY WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN IN HYPOTHETICAL BACKTESTING RESULTS. You should carefully consider your objectives, financial situation, needs, psychological and emotional fortitude, and any other relevant personal circumstances when determining whether or not trading is suitable for you. Trading is not for everyone, and for some there are much easier ways to make money from a side-hustle or career more suited to their personality and situation. Trading is exceptionally difficult to succeed at, with a remarkably high failure rate. So please do your own due diligence to protect yourself and your capital from unnecessary losses and damage. Seek advice from a qualified professional (such as a financial advisor) if you feel uncertain about your decision to begin trading. THE RISK OF LOSS IN TRADING SECURITIES IS LIMITED TO THE AMOUNT INVESTED. HOWEVER, THE RISK OF LOSS IN TRADING DERIVATIVES (SUCH AS FUTURES, CFDS, FOREX ETC) MAY NOT BE LIMITED. THIS MEANS YOU MAY LOSE MORE THAN YOUR ACCOUNT BALANCE OR THE AMOUNT REQUIRED TO HOLD AND CONTROL THE PARTICULAR DERIVATIVE, ESPECIALLY WHEN EMPLOYING LEVERAGE. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINED IN FUTURES, OPTIONS, FOREX AND CONTRACTS FOR DIFFERENCE CAN WORK AGAINST YOU AS WELL AS FOR YOU. IN OTHER WORDS, THE USE OF LEVERAGE IS A TOOL THAT CAN LEAD TO LARGE LOSSES AS WELL AS LARGE GAINS. WHEN USED PROPERLY THIS CAN BE AN ADVANTAGE, BUT WHEN USED IMPROPERLY AND CARELESSLY IT CAN RESULT IN CATASTROPHIC LOSSES - OFTEN RAPIDLY. This brief statement cannot disclose all the risks and other significant aspects of securities and derivatives markets. It also does not cover the many risks inherent in cryptocurrency trading - such as lack of regulation, potential liquidity issues, high volatility and various third-party risks. It is YOUR responsibility to research and decide whether or not to accept the risks involved in the particular market or asset you choose to trade or invest in. IT IS YOUR RESPONSIBILITY TO CONSULT YOUR FINANCIAL ADVISOR TO DETERMINE WHETHER TRADING IN SECURITIES, CRYPTOCURRENCIES OR DERIVITIVES PRODUCTS IS APPROPRIATE FOR YOU IN LIGHT OF YOUR OWN FINANCIAL CIRCUMSTANCES. Good luck with your wealth creation journey, and please take this information seriously. The graveyard of failed traders is large and ever-growing, and that is largely due to these warnings being ignored and the many dangers of trading not being respected.