Trading Forex Using Price Action Strategies

 

Price action analysis is the most efficient and logical way to trade the forex market. Using this technique to trade the market will enable you to focus more on your own self-control and money management schemes which as any professional forex trader will tell you are far more important than analyzing every economic release or technical indicator. Price action strategies work really well in the forex market due to its high liquidity and 24 hour trading hours. By learning a few well defined and time tested price action strategies you can learn to spot price setups in real time on any time frame in the forex market. Contrary to popular belief you do not need a complicated method to analyze the market. All you need is a trading strategy that gives you an edge in the market that when combined with discipline and money management will bring you consistent profits over time.

Imagine sitting down at your trading desk at the end of your work day and looking over the daily charts of your favorite forex pairs and knowing exactly what to look for. You don’t need to interpret multiple lagging indicators and read the Wall Street Journal every day. All you need to do is learn how to read what the price chart is telling you. By knowing a few solid price action patterns to look for you can just sit and wait for the perfect setup to form and then pounce on it like a Tiger waiting in ambush for its prey to walk by. Most beginning traders are like a baby Tiger that doesn’t know how to hunt yet. They run at everything that moves expending all their energy and by the time the easy prey comes along they are too tired to get it or miss it all together. Forex trading is the same way. You can waste your money on stupid trades that aren’t any better than flipping a coin or you can sit and wait for your defined setup to form and then jump on your trade with cautious confidence.

By knowing what price action strategies to look for and which ones work the best you give yourself some huge advantages over other traders. By not overtrading and preserving your trading money until a high probability setup comes along you will grow your trading account much quicker than if you were to enter a bunch of random trades out of emotion. By knowing what to look for in the market you can spend less time wondering what you should do while sitting at your trading desk and more time living life. Many forex traders that use price action strategies only look at the forex charts once a day for thirty minutes or so. They know what they are looking for; if it is not there then they wait for the next day. This is a much less stressful and more consistent way to trade. Price action strategies are great for the person who does not have a lot of time or that doesn’t find it particularly entertaining to sit and stare at price charts for hours.

While you can never control the market, price action strategies will give you a perspective on the market that allows you to discern garbage market noise from real profitable setups. Knowing what you want the market to look like before you enter will save you much time and frustration from over analyzing every little market movement or piece of data. I have generally found the less traders look at their charts the more profitable they become. The natural tendency is to do the opposite however, which is partially why so many traders lose all their money. Price action analysis is the best way I have found to trade the forex market and has clarified my view of the markets as well as saved me countless hours of precious time.

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