• Learn to master one price action setup first.
Many traders get caught up in trying to learn a hundred different trading strategies while somehow trying to make them mesh into one coherent trading system. There are many different ways to make money in the forex market; however, the more you over-complicate the method you use and the more flip-flopping you do between methods, the more you are going to suffer. In order to become a professional trader, you must first find a high – probability edge that you use to enter trades, you then master this edge before adding anything else to your trading toolbox. Find one trading method that has proven to be successful over time, like simple price action setups, master one of the setups, then once you know how to use that setup successfully you can learn other price action trading setups if you desire. Most professional traders make a consistent living off one or a handful of setups, remember to keep it simple.
• Don’t over trade – trade only the best price action setups.
Over trading is one of the most prevalent trading mistakes that forex traders make. It is extremely easy to fall into the trap of over trading when you are not thinking objectively and do not have enough patience to wait for high quality price action setups. One important factor to consider before you invest your hard earned money into the market is, why are you trading? Many people get involved in forex trading for all the wrong reasons; they feel like they “have” to make money to get out of their current job, or they really want to buy something expensive and hope to make the money for it by trading forex, or a whole host of other reasons. The bottom line is that if you feel like you “have” to trade because it’s your ticket to freedom or happiness, you are probably going to feel pressure to take less than A+ setups. Once you start feeling this pressure you are essentially gambling because you drastically reduce the probability of your trading edge being effective when you lose patience and jump on setups that are lower in quality.
• Learn to trade price action from confluent levels.
• Learn to trade price action from confluent levels.
One thing that any forex trader who has been around the block a few times knows is that support and resistance levels matter. Often time’s price will respect significant horizontal levels over and over. Thus, it goes to reason that these levels are important and if a price action setup develops near these levels it is something that can add weight and validity to your setup. Trading confluence is a very important tool in your price action trading tool box; confluence means multiple signals or levels that line up together in the market. For example, you might see a very well defined bullish rejection pin bar setup form at a key level of support during an uptrend in the EURUSD, you then have 3 points of confluence in favor of going long; 1) the bullish pin bar setup 2) an upward trending market 3) a significant horizontal level being rejected by the pin bar. If you can add a 4th point of confluence, say a Fibonacci 50% retracement level or a moving average bounce, than this adds even MORE weight to the price action setup.
• Develop a price action forex trading plan.
Developing a forex trading plan is the glue that holds everything else together. It is all well and fine to know in your head what you SHOULD do while trading the forex market. However, it is one thing to know how to do something and another thing all together to actually DO IT, a forex trading plan will act as the physical manifestation of what you should do while trading, so that you don’t just do whatever you feel like doing at the time. Most traders end up falling into emotional trading cycles and end up losing a lot of money in the markets because they try to control the market. Having a written out and concrete forex trading plan that you read every day will be your objective guide as you interact with the market. This guide will help to remind you that you cannot control the market, but you must learn to trade in harmony with it. The traders that do not succeed are the lazy ones who do not make a forex trading plan and read it before each interaction with the market. Most people simply do not have the self-discipline or will power to not over-trade or over-leverage when there is no one to be accountable too except themselves. Trading is not like any other job because you have NO boss, there is no one to reprimand you or tell you what to do, and this is the function of the forex trading plan, think of it as your boss or as a sort of check and balance for your emotions.
Don’t forget to check out some of my free forex videos here and if you’re keen to learn more about price action , check out myforex training community here.
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
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