Price action trading strategy is by far one of the most effective trading strategies in the world. Thousands of retail traders are using the price action trading method to find reliable trade signals in the market. Being new to this market, you might be thinking knowing about the different formations of the Japanese candlestick pattern is a very tough task. But as you learn about the important market dynamics and basics of the Japanese candlestick pattern, you will become more confident in using this strategy.
In this article, we are going to discuss some of the important elements which you must know to become a professional trader. Let’s get into the details
Support and resistance level
Professional traders always look at the major support and resistance level to find reliable trade signals in the market. Without knowing about the important support and resistance level, it becomes really hard to improve the over-trade execution process. Some people who have a fair knowledge about the basics of the candlestick pattern still fail to find high-quality trades. This is because they are taking the trades at the minor support and resistance level. There is no point in taking the trades based on price action confirmation signals without knowing the position of the price. It would be wise to find the critical zones in a higher time frame as it will improve our overall trade execution process.
Choosing a great broker
We must learn to take the trades with a premium broker like Saxo. Read more about the high-end brokers and learn to manage your trades in a very systematic way. As you learn about the importance of high-end brokers, you will slowly learn to deal with the risk factors systematically. Over the period, you will become much more confident with your actions. Never think you can find reliable price action signals by using low-end trading platforms. You need to choose a high-end trading platform from the starting of your trading career and only then you can expect to find the best quality trade signals even in the complex market condition.
Learning about risk management policy
The novice traders often ignore the importance of risk management policy. They keep on trading the market with high risk and expect to win most of the trades. To them, a price action trading strategy is more like a fail-proof trading system. They don’t realize the fact, every trading system has to go through the process of losing trades. To keep your funds safe, it would be wise not to risk more than 2% of the account balance in any trade. Once you start to follow this technique in the trading profession, you will become much more confident with your actions and thus you will no longer lose trades due to emotions.
Learn to manage your emotions
Being a professional price action trader, you must learn to manage your emotions. Failing to manage your emotions in the trading business can lead to big losses. You might have to blow up the trading account within a short time. Some people often think learning to manage the emotional stress in the trading profession is an easy task. As soon as they become experienced with the trading industry, they realize it is one of the most difficult tasks in the trading profession. If you wish to become good at trading, you must have strong control over your emotions. Without learning to control the emotional stress in the trading profession, you will never become a profitable trader in the retail trading industry.
You should be smart while using the price action trading method. Always be prepared to accept few losing trades as you never know the outcomes of each trade. As you keep on trading the market by following the basic rules, you will slowly become confident with your actions.