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# A Beginner's Guide to Price Action Trading

## What is Price Action Trading?

Price action trading involves analyzing the movement of price over time to make informed trading decisions, rather than relying purely on fundamental data or indicators.

### Key Components

There are three key components that make up the framework of price action trading:

#### Market Maker Models
Institutions often take on "roles" in the market that create observable ranges and breakouts. Understanding this model marketplace behavior is key.

#### Fractals
Similar patterns in price action tend to repeat themselves across longer and shorter time frames.

#### Liquidity Runs
Sharp movements up or down designed to trigger pending orders clustered around key levels.

## Buying vs Selling Opportunities

There are profitable trades to be made both in rising markets (buy-side) and falling markets (sell-side).

## Finding Trading Opportunities

### Liquidity Draws
Moves towards pending order clusters get rapid reactions.

### Premium Areas
Zones located above current market price are probable profit targets.

### Market Maker Models
The roles held create ranges to watch for breakouts.

### Multi-Timeframe Analysis
Higher timeframes set the stage, lower find high-probability setups.

## Executing High Probability Trades

### Entry Patterns
Target unfair pricing anomalies like gaps, voids in volume, order clusters.

### Confirmation Signals
Look for signs of serious buying or selling commitment.

### Risk Management
Size positions based on stop loss rules.

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