It is now my duty to help aspiring traders learn the correct way to trade the Forex markets, and to help them find strategies that will bring them success. This article is going to cover 5 areas traders can start working on immediately to start bringing about better results!
Have a Strategy ? Pick One and Don?t Chop and Change
For traders to be profitable in the Forex markets they need to have an edge that will give them a better chance than 50/50 of making a profit. Without an edge on the market the trader may as well flip a coin and make trades based of the coin toss result!
The edge a trader has is the method they use to identify and enter trades in the market. Price Action is a very high probability edge on the market that traders can use to spot trades and then enter to profit.
Price Action involves the trader stripping all the indicators of their charts and learning to read the raw price only. Everything a trader needs to know can be found in the raw price based on how it behaves at certain levels.
Price Action trading is a method that has been around for a long time and will be around for a long time to come. Unlike so many other indicators and systems Price Action trading does not stop working when the markets changes. If a trader knows how to read price, they will have a way of making money in the markets as long as there are markets to trade!
Perfect Your Price Action Strategies
Like everything learning to trade Price Action and becoming successful takes time. It is up to the trader how quickly or slowly they become a proficient Price Action trader because the more they put in the more they will get out.
The quickest way to improve a trading method is to practise and perfect it. This can be achieved by opening a demo account and beginning to place trades immediately. Traders need to refine their method so they know exactly what to do whatever scenario the market throws at them.
Price Action Trading Strategies
The number one reason traders fail in the Forex markets is because of the way they approach and think about their trading! Most traders and especially new traders think that the more they lose, the more they need to study the charts. This is not always the case because many times it is the trader?s psychology letting them down.
Once a high level of market understanding is reached, it then becomes all about how the trader thinks and feels about trading. The most common trading psychology mistakes are:
- Trading with fear
- Over confidence
- Greed
Until a trader learns to combat these mistakes and takes active steps to learn and correct them, they will continue to fail. A solid understanding and education of trading psychology is needed to succeed in the Forex market. http://www.forexschoolonline.com/ has a document for their members that covers trading psychology and teaches the students how they need to begin thinking about their trading.
Stop Over Managing Your Trades
Once a trader has entered their Price Action trade they need to let the market have time to move and ?do its thing?! Many traders make the mistake of watching their charts all day long. All this creates is panic and the trader ends up doing something like tightening the stop, or taking profit when they shouldn?t be.
Moving stops when they shouldn?t, taking profit when they shouldn?t and entering trades when they shouldn?t are all mistakes traders make because they are watching their charts too much!
Traders need to set their orders and turn the screens off. Walk away and do something else! The Forex market is not a game and it is definitely not there for the amusement of traders! The market will be there when you get back, so go and do something else and let the market move!
Only Pick the Best Setups and Then use the Power of Compounding
One of the most powerful techniques a trader can use in their trading is compounding. The trader who learns to only enter the very best setups and then uses the profit made to increase their trade size will be far out in front of the trader who picks many average trades!
Learn what the very best setups are and then let the power of compounding increase your trading account! Don?t fall into the trap of what 95% of traders do and over trade.
Over trading is one of the very biggest trading account killers. This problem is extremely wide spread and will empty trading accounts very quickly. The reason this problem is so wide spread is because traders think that they need to place many trades to make money quickly! In fact this is the exact opposite of what they should do!
Enter only the very best setups and let compounding do the rest!
Article Source: http://www.articlealley.com/http://www.articlealley.com/how-to-make-money-in-forex-trading-2431082.html
How to Make Money in Forex Trading
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