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Price action is the practice of reading what buyers and sellers actually did, instead of what an indicator computed from what they did. Master seven patterns and you can trade most major-pair setups without a single line on the chart.
1. The pin bar (hammer / shooting star)
A long wick rejecting a level, with a tiny body in the opposite end. At a key support or resistance, a pin bar is a high-quality reversal signal.
2. Bullish & bearish engulfing
A candle whose body completely engulfs the prior body in the opposite direction. The bigger the engulfing relative to recent average true range (ATR), the stronger the signal.
3. Inside bar
A candle entirely contained within the prior bar's range. A breakout of the inside bar in the direction of the larger trend is a classic continuation entry.
4. Morning star & evening star
Three-candle reversal: strong move, indecision candle (doji or spinning top), strong reversal candle. Works best after a multi-day trend exhaustion.
5. Doji at a level
Indecision (open ≈ close) only matters at significant prices. A doji in the middle of a range is noise; a doji at multi-week support is a question being asked.
6. Three-line strike
Three consecutive trend candles followed by a single candle that wipes out the prior three. Often a high-probability continuation, despite looking like a reversal at first glance.
7. Failed breakout / wick rejection
Price pokes above resistance (or below support) and closes back inside. This is the single highest-payoff price action pattern, because it traps breakout traders into the wrong direction.
How to combine
Price action works because of context, not because of pattern names. Always ask three questions before entering: Is this at a level? Is this with the higher-timeframe trend? Does the candle close confirm the rejection?
