what is meant by price action trading in forex

Price action trading simply means trading without the help of technical indicators. It is the purest form of trading practiced back in the days when they were no fancy computers and programming languages. Price action trading is like driving a manual stick shift car as compared to driving an automatic gear shift car.

Price action traders depend on knowledge of market sessions, market psychology, news, macro economics etc. when placing their trades.

Let me give you an example, a round number like 1.3000, 1.4000, 1.5000 etc. is more likely to be where traders will place their stop loss because it is easy to remember.

A price action trader knows round numbers are psychological numbers and will avoid placing stop loss there because it is predictable.

Another example is the London session starts from 8 am till 5 pm but most of the action/momentum is during the first 1 hour (between 8 am to 9 am). Price action traders also know this and will use it to their advantage.

A last example: there are option orders every day (options are usually sold by market makers , hedge funds etc to manage their risk). These option orders have prices which tend to act as magnets in the morning before they expire.

If theres an option valued at $2bn at strike price 1.2000 expiring by 10am in the morning, it is likely price may gravitate towards that price and range around there till after 10 am.

So, price action traders depend on a lot of raw data to trade, but they are not really into technical indicators.

Price action is the ancient way of trading that was in play before indicators were invented. In the past, traders didn't use indicators, they relied on understanding candlestick patterns, price behavior etc. and that is what price action trading is about. I will say that from my experience, price action trading is more accurate than using indicators.