Top 3 Tips to Become a Pro Price Action Trader

Top 3 Tips to Become a Pro Price Action Trader
 

Trading is one of the most lucrative professions in the world. If you can truly master the art of currency trading, it won’t take long to secure your financial freedom. In the past, only the large banks and institutions were able to participate in this trading industry. But due to the recent advancement in modern technology, the retail traders can easily trade different financial instrument with their smartphone or personal computers. But having access to the online trading industry doesn’t give you the guarantee that you will become a successful trader. According to recent statistics, more than 90% of the traders are losing money. So if you want to become a successful trader, you must create a unique plan.

First of all, you need to choose a trading system based on your personality. The novice traders always try to create the indicator based trading system. Indicators are nothing but helping tools. It will always give you early or late trading signals. So which strategy is the best way to make a consistent profit? This is where price action trading comes into action. Price action trading is often considered as the best trading system in the world. This system is based on the formations of the Japanese candlestick pattern. The expert traders use the highly reliable price action confirmation signal to execute high-quality trades at the key support and resistance level. But mastering the art of price action trading system is not at all easy. You might have a general idea about the price action trading system, this is not enough to secure your trading career. Today we will give you three amazing tips which will help you to become a professional price action trader.

Always trade the higher time frame

Forex market is completely unpredictable. You have to deal with the probability theory to make a consistent profit. But when it comes to higher time frame trading, you can easily eliminate the noise of the market. The majority of the expert price action trader always use daily or weekly timeframe price action signal. Unlike the professional price action trader, the rookie traders always use the lower time frame data to place a trade. They are biased with the common problem of over trading. As a full-time currency trader, you don’t have to trade all day long to secure big profit from this market. You have to understand the fact, quality beats quantity.

Draw the key support and resistance level in the daily or weekly time frame. Start using the simple trend line tools to find the major reversal point of the market. If you do the technical analysis in the lower time frame you will always have to deal with false trading signals. The only way to eliminate the false trade setup is by using the higher time frame price action signal. It’s true that higher time frame trading is a little bit boring but without following the conservative way, it really hard to protect your trading capital from the wild swings of the market.

Learn multiple time frame analysis

The novice traders are always busy with different kinds of indicators to find the best trade setup. They often think by using more indicators they will be able to maximize their profit factors by eliminating the false signals. But things are not so easy in real life trading. In order to filter out the best trades, you have to learn multiple time frame analysis. Multiple time frame analysis is nothing but the study of the different formations of the Japanese candlestick in the different time frame. But when you do the technical analysis in the different time frame, you need to give priority to the higher time frame data. Focusing on the lower time frame will never give you high-quality trade setup.

Some of you might say higher time frame trading is extremely boring. To be honest this is true to a certain extent. However, when it comes to Forex trading profession, you have to understand that by nothing most of the time is the best way to secure your profit. When you do the multiple time frame analysis, give priority to the higher time frame data. Things might seem a little bit difficult for you, but you can use the demo trading accounts to master multiple time frame analysis.

Scaling out

Trade management is the most important element in currency trading. The retail traders are always taking the bigger risk without knowing the deadly consequences of big lot size trade setup. You don’t have to trade this market with high-risk exposure to ensure a big profit. You have to catch the large market movements and scale out your trade over the period of time. Sounds a little bit confusing? Don’t worry, we will make it clear to you. Being a price action trader, you will be using a tight stop loss in each trade. This will give you a clear idea about the maximum potential loss from a certain trade. Once you have executed the trade, you need to start using the partial closing feature to book a certain portion of your profit. Let’s say, you have 10 lot trade open in EURUSD pair. After 100 pips gain you can easily close 9 lots and keep the remaining 1 lot open to ride the market trend. When you scale out of the market, make sure you use the trailing stop loss features so that you can maximize your profit potential by riding the long-term market trend.

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