If the Forex market moves up and then drops back down some, the highest point that it has reached before the drop down is now resistance. As the market goes back up again, the lowest point which it reached before it starts to climb again is now the support. An uptrend line, in its most basic form, is drawn along the identifiable valleys, or support areas.
When people talk about price action they talk about the analysis of pure characteristics of a price chart. For example analysis of candlestick lengths and shadow to body ratios (meaning candlestick pattern recognition) and price pattern recognition form the basis of what people would unequivocally call “price action” (PA)
Candlestick charts are quite often used in forex trading to depict the trends of an asset. They may seem quite complicated but we explain what a candlestick chart is and how to use one to help you trade better.