Three things that you should consider before using price action signal
Price action trading strategy is one of the easiest ways to find to quality trading signals. Almost all the professional traders in today’s world are using this system to make a profit. However, before you learn the art of price action trading system you need to develop a strong basic in the world of finance. You should know that in order to learn all the reliable candlestick pattern, some prior knowledge about the Forex market is very essential. Many rookie traders have started learning the price action trading system without knowing anything about the market. Though the price action trading system is very simple yet it is for the advanced traders. So develop a clear concept of the fundamental concept of this market or else it will be hard for you to master price action trading strategy. Now we will give you some amazing tips which will help to understand this system much better within a short time frame.
Learn to trade the higher time frame
Price action trading strategy is only for the passionate traders. If you are aggressive in nature than this system is will not work for you. You need to exhibit a great level of patience and wait for the right trading system. So before you start using the price action confirmation signal try to trade the key support and resistance level in the higher time frame. It’s true that it will consume a huge amount of time but at the end of the day, it will be an asset for you. You should never overtrade the market under any circumstances. Always remain focused and concentrate on finding the best possible trade setup in the higher time frame. In a nut shell, you need to learn support and resistance level trading in the higher time frame to start price action trading.
Learn to control your emotion
Most of the novice traders are trading the market based on their emotion. They simply think the market has rallied higher and it’s high time to sell this pair. But things are not like this in real life. Most of the time all the currency pair tends to move in favor of the market trend. So without spotting any real reversal signal in your trading platform, no trade should be executed. In fact, reversal trading is just like a suicide mission. Always focus on the current trend and use the minor retracement level to find trade setup. You need to learn to draw the proper support and resistance level in the higher time frame. Once you know all the key levels wait for the formation of the reliable candlestick pattern. Sometimes it will take more than one or even week to form a valid trade setup but should control your emotion during this waiting period.
Many novice price action traders often think that they don’t need to do the fundamental analysis in price action trading. But without doing the fundamental analysis you will never understand the strength of the prevailing trend. Sometimes the long term trend of the market often gets changed due to high impact news releases. So make sure that you have a clear understanding of the economic conditions of the country. Always note the time of high impact news releases and avoid opening any trade during that time. You need to wait for the market dust to settle during the high level of volatility. If you are not aware of the fundamental factors than sometimes you will be the victim of the false spike. So begin price action trader you need to learn the fundamental analysis skill also.
Summary: Price action trading is extremely reliable and very profitable. But in order to use this system, you must have strong patience. You should always do the perfect technical and fundamental analysis before placing any trade. Under no circumstances, you should take risk more than2 %.Always minimize your risk exposure level in every possible way.