If you search “how to read price action as a beginner” on Google, the first thing that comes up is information for more experienced traders. This makes sense because it often takes years of practice and experience in order to understand these strategies well enough so they can work effectively – which means noobs will be left scratching their heads at some point or another!
Unless you have subscribed to a crypto signals provider, you won’t know anything about the price action without having to study or research on your own.
This article will cover the basics of price action so you can learn what’s important:
How To Understand Market Structure with Price Action?
You must have heard of these terms; Higher High, Higher Lows, Lower High, Lower Lows. These are a few of the market structure terms that traders use.
Higher High – When we talk about highs, the highest point on your chart is what we’re referring to. These peaks can be higher than any previous ones and they often mark periods where prices were extremely volatile in nature before settling down again later for another run-up towards their next peak!
Higher Low – Higher lows are the pull back when the price is at its lowest but still higher than the previous lowest price on your chart.
Lower High – It usually happens during a downtrend. When the price is lower than the previous high. It usually means there was an impulsive move upwards but it couldn’t go past the previous impulsive move on the downtrend.
Lower Low – Lower lows are the lows that are lower than previous lows.
How to Anticipate Market Trends?
When the price of an asset is making higher highs and higher lows, it is considered an uptrend. During this trend, the price pushes up to a new high and then falls back to test the previous highs before making another move to another higher high.
Similarly, when the price is making lower highs and lower lows, it is a downtrend. Prices fall down to make new lower low and then push up to make another high lower than the previous peak.
Now, coming to spotting a market trend or anticipating reversals. If you don’t want to do all that work by yourself, you can subscribe to a crypto trading signals provider, who will do the job for you.
Usually, the market is always in one of the three conditions; Uptrend, downtrend, and ranging (consolidation). When the market is in an uptrend for a long you see price not making a new higher high instead falling below the higher low, it could mean a price reversal is on the play.
You can also make use of key levels like Support and resistance to strengthen your theory. If the price retests the previous higher low, chances are it could go up to make another higher high. Until it’s not making a lower high or lower than the previous high, the trend is in place. The same can be said in the case of a downtrend.