There are many ways to trade the market. The pro traders always prefer to trade the market with a balanced trading strategy. When it comes to a balanced trading system, most of the successful traders will say, price action trading strategy is the best way to deal with this market. Learning the art of price action trading is really easy but making consistent profit by using this system is really hard. Most of the time, the new traders fail to abide by the rules and thus they blow up the trading account. No matter which trading strategy you use, you need to stick to your rules. Let’s discuss the most common mistakes made in price action trading strategies.
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Trading the lower time frame
A price action trading strategy is a very effective way to find quality trades. But you need to select the time frame with an extreme level of caution. For instance, if you trade the market in the lower time frame, you will not be able to make a profit in the long run. The pro traders in Hong Kong always prefer to trade the higher time frame data, since it greatly improves their win rate. Being a new trader in the Forex market, you have to focus on quality trade execution. The only way to ensure quality trade execution is by trading the daily and weekly time frame.
Trading against the major trend
Though price action trading strategy is extremely profitable, very few traders actually know the perfect way to deal with the market. Most of the time the rookie traders execute trades against the major trend. At times, due to a faulty price feed, the traders fail to identify the price patterns with an extreme level of accuracy. Before you start to trade the market, you need to visit https://www.home.saxo/en-hk to learn more about a professional trading environment. Never think you can change your life without doing the hard work. You need to find the long term trend and trade along with the trend. If you can follow this rule, you can expect to make a decent profit from this market.
Trading the high impact news
Price action trading strategy will never help you to find the best trades during the high impact news. In fact, the pro price action traders never trade the market during the event of the major news release. They love to follow the conservative trading technique since it saves their investment in the long run. However, if you intend to trade the major news, make sure you learn more about multiple time frame analysis. Multiple time frame analysis is one of the easiest ways to filter out the best trades in this market.
Trading with high risk
After using a price action trading strategy for a certain period of time, the new traders often become overly confident with their trading strategy. They start taking excessive risks in the hope of making more money. Trading is all about risk management. No matter which trading strategy you use, you should never risk any amount that you can’t afford to lose. Try to learn more about money management techniques since it will help you to find quality trade with low-risk exposure.
Trading emotions
Emotions can be very dangerous in the investment business. You might have extensive experience with the retail trading industry but this doesn’t mean you will trade the market with emotions. Learning to control your emotions is one of the first steps to protecting your trading capital. As a full-time trader, you need to think about long term goals. Never consider trading as a get rich quick scheme. Try to find high-quality trades after analyzing the important variables of the market. If you feel confused about a certain trade setup, take a small break and wait for the next opportunity. Always trade with the major trend.