Learn Forex Price Action Strategies - Price Action Strategies
One must come up with a strategy which they stick to when trading the online market. One must have the discipline to s broken then the sentiment of the strategy at all times. That's why it is better to come up with strategies that are profitable - profitable systems will be a lot easier to follow and stick to. This is because a trader knows that by following the rules of their system they'll be successful.
A carefully designed trading strategy that has been back tested & proven to generate profitable results is one of the keys to becoming successful when trading the market. This type of strategy will make it easier for trader to follow the rules of their strategy because they already know that the strategy is profitable, therefore maintaining the discipline required to continue following the system will be much easier.
Successful trade strategies also will include:
1.Money management principles
2.Forex Psychology Mindset
The 2 will greatly improve the success of any system.
However, Let us look at price action strategy before explaining more about money management and forex psychology.
Price Action Forex Strategies
Price action is the use of price movements to determine when to buy or close trades. Forex price action will use the study of patterns that form time and time again & these chart patterns can be interpreted in different ways. The trader will use this pattern to determine the likely market direction that the market is likely to take next based on the price chart patterns that have been formed on the charts.
In forex price action traders may use different methods to generate signals from the chart setups. Some of these techniques are:
Candlesticks chart patterns - a trader may use the study of Japanese candlestick chart formations which is the study of various candle formations along with how to interpret these candlesticks formations. A candlestick pattern may consist of only one forex candlestick or a multiple of candlesticks. To learn more about candlesticks patterns traders can find these candlestick chart patterns tutorials on the learn forex lessons of this web site under the analysis concepts.
Support & Resistance Levels - traders can use price action and combine this price action with support & resistance levels. A trader will wait for price to hit the support level to open a buy trade and wait for the price to touch the resistance level to open a sell trade. The concept of trading major support and resistance levels is a very popular method in forex. For example in a upward trend a trader might wait & only open buy traders when prices hit support levels - at the same time a trader will take profit once the price hits a resistance level & then wait for another pullback to open a buy trade again.
To learn more about support and resistance levels traders can find these tutorials on the learn forex lessons of this web site under the analysis concepts.
Trend lines - traders can also use trend-lines to determine price action direction or the market trend. For an upward trend line that shows the market is trending up a trader will open buy trades once price touches the upward trend line. For a downward trend that shows the general market direction is downwards a trader will open sell trades once the price touches the downward trend line.
To learn more about how to trade with trend lines traders can find these tutorials on the learn forex lessons of this web site under the analysis concepts.
Chart Patterns - patterns is different from candlestick patterns, these are two different methods of technical analysis, and traders should learn more about chart setups in the lessons section of this web site under the analysis concepts.
Chart patterns is the study of a formation of several candlesticks over a period of time. These patterns are consolidation patterns, trend continuation patterns and market reversal patterns. Traders can use the study of these patterns to determine the next likely market move.
Forex Strategy Tips
Once a trader has come up with their strategy, they should also include the following so that to make their strategy more successful.
1.Money Management Rules
2.Forex Trade Psychology
Money Management Rules
Money management rules should be part of your strategy - these rules will help you as the trader to manage risk. This means that you will use 2 rules of forex equity management - these are risk:reward ratio & drawdown reducing method when placing your trades to determine the lot size that you will open in the market. The most popular money management rule use in fx & the one that you should also add to your plan is the rule which says a trader should never risk more than 2% of their trading account balance on any one single trade.
To learn more about these 2 forex equity management rules, traders should read the money management lesson that is on the learn forex lessons section of this site under the key concepts lessons.
Forex Psychology Mindset
In order for one to become successful when trading the market one has to learn about psychology. The forex psychology or mindset which is needed to become successful in forex is one that avoids the emotions of fear and greed while trading the market and is a mindset of total discipline that one will follow all their rules and their forex strategy & only trade with signals that are generated by their forex strategy. With discipline a trader will not trade unless their strategy gives a signal. One will have the mindset of only following their system 100 % all the time without second guessing the system. A disciplined trader will also not place trades in the market just because the currency market has started to move upward or downwards, instead a trader will wait for a signal to trade to be generated by their fx strategy.
In order to learn more about psychology & how to manage emotions while trading the online forex market a trader can read the psychology tutorials from the learn forex lessons section of this site under the key concepts tutorials.
