The foreign exchange market is a huge market and every single day more than 4 trillion USD is traded all over the word. Knowingly or unknowingly, we have all participated in this market directly or indirectly. But when you consider buying and selling currencies to make a profit it’s a totally different scenario. Many people in Australia have mastered the art of Forex trading and leading a luxurious life. Some novice traders often ask about the best way to trade the market and how they can make a profit. To be honest there are no exact answers to this question. It totally depends on your personality and your perception of this market. However, if do some in-depth analysis about the trading method of the professional traders then you will find that every single one them has knowledge of price action trading strategy. To be honest this system is one of the best and easiest way to make money. In today’s article, we will give you some amazing tips which will make you better price action trader.
Figure: Trade with professional broker Saxo
Learn all the candlestick pattern
Price action trading strategy is based on the formation of a Japanese candlestick. As a new learner, you might get confused by seeing all the reliable candlestick patterns. Some traders will often tell you only to learn the most traded patterns in price action trading strategy. But we will suggest you that you learn all the candlestick pattern since it will help you to deal with different market conditions. Every single moment the market is changing its behavior though the fluctuation of price. So if you don’t have the perfect knowledge of the Japanese candlestick then it will be hard for you to interpret the price movement. Instead of spending money on buying a trading strategy you should buy books on price action. Once you master this trading strategy you will feel the positive change in you.
Going through the important news realize
The news is very important since it affects the Forex market most. Some traders in the financial industry often trade the market based only the trading signals generated in their trading platform. But in real life trading, you need to learn the news analysis. Being a price action trader, if you ignore the importance of fundamental factors then you are actually ignoring the most powerful elements which drive the price of the currency market. So spend some time and learn the art of fundamental analysis as it will help you to make better trading decisions. If you can do the fundamental analysis perfectly then you can also know when the trend of a certain currency pair is going to change.
Stop using too many indicators
Indicators are just the waste of time. Many new traders often load up their trading charts with too many indicators for finding the perfect trade setup. But being a price action trader you should only focus on the formation of the candlestick. You need to learn the language of the candlestick so that you can place a trade with great precision. However, being a price action trader you can use one or two indicators as helping tools. Some experts use the 100-day moving average to find the dynamic support and resistance level. But they never trade the indicators reading but they consider at as a helping tools only. Another thing that you should is to trade the higher time frame. Price action trading strategy is such a system which works best when trade in the 4 hours or above time frame. So don’t place your trade by taking price action signal in the lower time frame.
Summary: Price action trading is one of kind trading strategy. If you can trade the perfect trade setup in the higher time frame then you will never have to worry about making a consistent profit. Though it’s extremely profitable, always follow strict trading discipline and trade with proper money management.