Price action trading strategy is widely popular among professional traders. The pro traders in the United Kingdom uses price action trading system to find the best possible trades. Things might seem a little bit complex at the initial stage but if you know the psychological reason behind the formation of each candlestick things will get easier.
Being a rookie trader you might think trading is all about winning the big trades. But in reality, it’s more about dealing with the losing trades. If you fail to manage the losing trades efficiently, chances are very high you will lose a big portion of your investment.
Let’s learn some amazing the technique which will make you a better trader in the Forex market.
Use the demo account
Never try to trade the real market without having enough skills in the trading profession. You might be new to the online trading industry but this doesn’t mean you will place random trades without doing the proper market analysis.
Instead of using your real money, open a demo account with Saxo and you will eventually get better at trading.
Learning to trade the market like pro traders requires an extreme level of patience. By following an aggressive trading strategy, you are most likely to lose trades regularly.
But if you manage to learn the basic details of price action trading strategy by using the demo account, you won’t have to lose a big sum of money.
Trade the higher time frame
Higher time frame trading always generates quality signals. Being a rookie trader in the exchange traded funds industry, you might feel the urge to trade the lower time frame.
It true, in lower time frame trading, you will get more signals but do you think it will help? Trading more often creates the problem of overtrading. Overtrading is one of the key reason for blowing up the trading account.
You have to learn to trade the market with proper discipline so that you can easily make a profit at any market condition.
One good trade is enough to secure your monthly profit. So, stop being an aggressive trader in the Forex market as it usually results in heavy loss.
Use precise stop loss
The price action traders often get carried away by seeing the success rate in the trading business. They increase the risk factors to earn more money.
But this is not the proper way to make a profit from this profession. You must use precise stop loss in each trade or else it will be impossible to make a profit from this market.
By taking a huge risk you might win some big trades but in the long run, you will blow up your trading account. Never risk more than 1% of your account balance even though you are certain about trade setups.
Limit your risk exposure in every possible way so that you can survive in this profession.
Learn to improvise
At times you will feel something is wrong with the price action setup. This is where you need to improvise. So, how do you learn to improvise your trading technique?
There is no exact answer to this question. However, if you learn the art of sentiment analysis, you will know the proper way to improvise your trading strategy.
The new traders often things fundamental analysis is not necessary for price action trading strategy. But in reality, fundamental factors are the powerful price driving catalyst.
So, if you ignore the high impact news, you can’t find great trades in the market.
Leading your dream life based on price action trading strategy requires precise knowledge of technical and fundamental analysis.
And you must blend the price action signals with fundamental analysis to find the best trades. Follow these rules and you will never have to face a tough time in trading.