Price action trading is one of the most profitable trading systems in the world. Though the novice Aussie traders prefer to trade with indicators are nothing but helping tools. Unless you learn the proper way to find key support and resistance levels, you are most likely to lose money. Pro traders use indicator reading to filter out the best trade setups. At times you might think that trading the financial instrument is all about a complex trading system. Once you learn price action trading strategy, you will understand how the experienced traders secure huge profit in a relaxed way.
So, what is price action trading?
Price action trading is nothing but studying the different formations of the Japanese candlestick pattern to find great trades. Though there hundreds of patterns but at the initial stage learn major candlestick pattern. Things will be really hard unless you know the key reason behind the formation of each candlestick. If required, take a professional course to master price action trading within a short period of time.
Developing a trading strategy
The development process of your trading strategy is extremely easy provided that you use the demo account. There is no reason to risk real money since professional brokers like Rakuten is offering a free demo account. Trade as long as you want but try to use the price action confirmation signal to trade the key levels. Some of you might think short term trading strategy is the best way to secure a huge profit but they are absolutely wrong. Short term trading or scalping is only for experienced professionals. You need to create a long term trading process so that you can easily find quality trades.
Trading with the market trend
The experts of the online Forex trading industry, always say trade with the market trend. Sadly, the new traders are always trying to trade the market reversal. You might sometimes make some big profit by placing trades against the trend, but eventually, you will blow your trading account. Though the price action trading strategy is extremely profitable, you should always trade in favor of the market trend. Use fundamental analysis to assess the condition of a certain country’s economy. Based on technical and fundamental data, execute the trade along with the trend.
Dealing with the losing trades
As a price action trader, never think you will always win a trade. Even after doing the perfect market analysis, you might have to face a series of losing orders. The best way to deal with such a loss is to reduce the risk exposure in each trade. Try to find trades with high-risk reward ratio so that few winners can cover up the loss. Learn more about trade management skills so that you can easily use advanced features like trailing stops to make a huge profit.
Learning from your mistakes
It requires time and patience to develop a perfect trading system. From the beginning of your trading career, write down the details of each trade so that you can easily asses your past trades. Try to identify your weakness so that you can easily fine tune your trading strategy. Keep on learning new things to keep yourself updated with the latest market news. Never trade the market with gut feelings as it will ruin your career. Try to control your emotions while taking decisions in this market.
Learning the art of price action trading is not all hard. If you trade this market with proper discipline and use the demo account for a few months, it won’t take much time to become a professional price action trader. Still, you have to consider the associated risk in the currency trading business. Reduce your risk exposure in each trade, so that you can easily deal with multiple losses. Learn to stay in the sidelines and wait for the best possible signal.