Most common mistakes of the price action traders
Forex trading is just like a traditional business. With a proper trading strategy, you can easily make consistent profit from this market. Though there are many ways of trading the financial instrument the elite class traders in the UK prefers price action trading strategy. Once you learn the different formations of the Japanese candlestick pattern, you can easily execute quality trades at the key support and resistance level. Most importantly, you will be able to ride the long term market trend.
The price action trading system is one of the easiest ways to secure big winners in the Forex market. Sadly the majority of the novice traders lose money due to some common mistakes made in price action trading. Today we are going to highlight the mistakes that can ruin your trading career.
Overtrading the market
Being a price action trader, it’s normal to gain confidence within a short period of time. After winning a few trades in a row, the new traders start to overtrade the market. They simply switch to the lower time frame data so that they can spot more trade setups. It’s true in the lower time frame you will be able to spot many signals but the quality will be extremely bad. Most importantly, it will force you to trade against the long term market trend. So stop overtrading the market to make some real progress in the trading industry.
Ignoring the high impact news
The professional price action traders in Singapore know the importance of fundamental analysis. They never execute any trade based on the technical data. As a currency trader, you have to learn technical and fundamental analysis or else your learning edge will be incomplete. You might have access to the Saxo CFD trading account but still, you will not be able to execute quality trades based on technical data. Learn to analyze the high impact news so that you can easily protect your trading capital.
Trading the lower time frame
Those who trade the lower time frame are known as scalpers. You might have a huge amount of money to trade the live asset with but there is no assurance you will be able to become a successful scalper. In fact, the professional traders always love to trade the daily and weekly time frame as it dramatically increases their win rate. However, if you still want to trade the lower time frame data, make sure you learn about multiple time frame analysis. Use the most reliable price action confirmation signal to execute a trade in favor of the existing market trend.
Confidence is the key to success when it comes to the trading profession. But the new price action traders often become overconfident with their trading strategy. They simply think they will never lose any trade and they can easily become a Forex millionaire within a short period of time. But if you do the math, you will understand losing is nothing but a part of this trading profession. So, never trade the market overconfidently. Be prepared to lose some trades on a regular basis.
Becoming addicted to trading
Addiction to the trading profession is one of the key reason for which the retail traders are losing a big sum of money. As a fulltime trader, you must control your greed and the trade the market with proper discipline. Stop focusing on the low-quality trade signals and maintain a trading journal. Try to write down the details of each trade so that you can analyze your past trade during your spare time. At times take short small breaks and socialize with other people. Never become addicted to this market as it will ruin your trading career in the a blink of an eye. Consider trading profession as your business and stick to the basic rules of money management. Stay on the safe side to protect your trading capital.