Price action is a way of estimating which way price is headed based on what it is already doing.
While using Price Action, you will have to look for patterns in the price that have predictable outcomes. The pattern that you find in one market may also apply to another market. These patterns have often been found to repeat themselves as well. You need to recognize these patterns by watching price action and then you will be able to trade accordingly.
While price action can be very reliable, it works better under some market conditions than others, and some formations may be more intuitive to you than others. There is also the fact that you’re going to have to learn how to recognize the very best setups and also to analyze them within a given context. So it is critical that you backtest your method on historical data for the assets you’re thinking of trading .