All Forex traders knows price action trading system is one of the best way to find great trades in Forex market. Do you really think it’s easy to master the art of price action trading system? The simple answer is yes. However, due to some common mistakes most of the new price action traders fails to make money. They simply don’t understand the fact trading is has nothing to do with 100% precision. You need to follow the basic rules of investment business and trade with proper money management. Taking unnecessary risks in the retail trading industry is nothing but ruining your career. If you start following the rules strictly, you can easily become a successful Aussie trader within a short period of time. Today, we are going to high light four major mistake that every new price action trades make.
Ignoring the market trend
The majority of the price action traders thinks to counter trade the market. To be precise they want to ride a new trend. There is saying in the Forex market, the trend is your friend. So if you want to save your investment, it’s imperative you start following the market trend. Instead of analyzing the candlestick in the lower time frame try to focus on the daily time frame. Never think you will assess the strength of the market trend based on technical data only. Focus on the fundamental factors since it is one of the easiest ways to assess the economic performance of a certain country. Once you have spotted the market trend properly it’s time to wait in the sideline for the most reliable candlestick pattern. Never execute any trade unless you have a precise confirmation about a trade. It’s better to wait rather than losing money on low-quality trades.
Not having defined goal
Being a price action trader, you might get carried away by the winning edge. People don’t really understand why they should have defined goal in Forex market. They simply trade CFDs and think to earn tons of money. This is nothing but overtrading the market. You need to have a specific goal or else it will be really hard for you to make money in the long run. Always remember trading is nothing but finding the great trades at low-risk exposure. If necessary learn from the experienced traders but never take unnecessary risk to earn huge amount of money.be smart and take a rational decision when it comes to trading profession.
Trading with emotions
Following your emotions is normal at the initial stage. If you always stick to your emotions, trading is not for you. You have to lock your emotions in an iron cage and trade the market with logic. Forget about the short-term gain and focus on long-term return. Some of you might find it really hard to control your emotions are losing a few trades in a row. In such case, it’s better for you to take a small break and start your trading with a fresh mentality. Never try to trade the market when you are frustrated.
Always have a backup plan
Those who are trading the market as their full-time profession must have a six-month financial backup. No one knows about the result of a certain trade. At times you might have to lose money for a few months and there is nothing wrong with it. So, in such a case, you need to have a backup plan to support your family. No matter which trading strategy you follow, you must face consecutive losing trades in your career. Unless you are prepared for such situations, the chances are very high you will take excessive risk to recover the loss. This will eventually jeopardize your career. Try to trade the market in a stress-free environment so that making decisions becomes easier.