The price action trading method is based on the use of the Japanese candlestick patterns. Those who have strong knowledge about the market dynamics, tend to do well since they rely on the price action trading method. On the contrary, novice traders usually take their trades without doing the proper market analysis, and thus they keep on losing money. Instead of learning about the complex trading method, it would be best if you learn to deal with the price action trading strategy in a very strategic way.
To master the price action trading technique, you have to follow some basic rules. Go through this article, as we will give you some advanced tips which will help you to master price action trading strategy.
Learn about the single candlestick pattern
Instead of learning about the complex candlestick patterns, you should learn about the single candlestick pattern. Once you become good at analyzing the single candlestick patterns, you should be looking for the multiple candlestick patterns. Right after you start learning about the multiple candlestick pattern trading methods, you will forget many details about the single candlestick pattern. This is very common and you need to revise the different formations of the Japanese candlestick and everything will start making sense.
Evaluate the support and resistance
To take the trades in a systematic way, you should learn to take the trades at the important support and resistance level. Without taking the trades at the major support and resistance level, it will be a tough task to make a regular profit. The novice traders often think taking the trades at the minor trading levels is more profitable. But if you do some analysis, you will realize minor support and resistance level doesn’t provide accurate trade signals to the retail traders. You may also get a demo account from a professional like Saxo and start learning the basics. Visit this page and learn about the offerings of Saxo so that you can take wise decisions without having much trouble.
Assess the economic calendar
The novice traders often get confused after losing few trades in a row. They think the price action trading method is not offering any valid trade signals. But if you dig deep, you will realize that the novice traders are taking their trades without assessing the economic calendar. To find the profitable trade signals in the market, the trader has to take their trades during the most stable hours. Unless they do so, it will be a tough task to make a regular profit. It might take a while to get used to the overall concept of fundamental analysis but you must not lose hope.
Study the phases of the trend
The majority of the traders don’t have any idea to evaluate the trend phases. Usually, they take the trades in random ways and loses a significant portion of their trading capital. But the professional traders always take advanced steps to protect their trading capital. They never take any trades without doing the proper data analysis. Thus they are able to make regular profit in this market. If you want to survive as a professional price action trader, you must learn about the different phases of the trend. Once you become good at it, making consistent profit in this industry is never going to be a tough task.
Trade with low risk
The new price action traders tend to trade the market with high risk. They think it is the most effective way to make a regular profit in the investment industry. But if you do some analysis, you will realize trading with high risk has nothing to do with your profit factor. So, always take the trades in a standard way and try to avoid losing trades. But if you lose any trade, do not get confused or frustrated. Accept the losing trades and consider them as a part of your trading business.