Profitably Trading Forex With Price Action
Many traders over-complicate their Forex trading with complex indicators and elaborate rules instead of keeping it simple with simple price action. Don't get me wrong, there are plenty of ways to trade Forex profitably, but overcomplicating things and jumping from one system to another is not the way to succeed. To be a profitable trader all you need is an "edge" of high probability setups and the mastery of the system. Price action trade setups are the high probability edge most people are looking for. Here are a few reasons you should forgo your complex trading systems and stick with price action trading.
Price action setups in and of themselves are very powerful. They become even stronger when combined with the confluence of other price levels. Confluence happens when there are multiple signals or levels line up at the same place you get the price action entry. Let's say you get the setup at a level on the chart with strong horizontal support or resistance, a trendline and the 50 Fibonacci level. Do you think all those things happening at the same place would make for a safe and high probability trade entry? Without overcomplicating things, combining price action setups with strong support and resistance levels make a very reliable trading system.
You don't need to have a lot of trade setups every day when you keep things simple with price action. You do have to have the persistence to wait for the most powerful setups to develop before jumping into the market. Trade better setups less often can make your trading not only less stressful, but more profitable as well.
Your price action Forex trade plan is what holds everything together. The temptation when trading something simple is to think you can keep everything in your head and know what you should do in every situation. But it is one thing to think you know what to do, and actually Do what you need to do when real money is at risk under live market conditions. If you don't have a trading plan to monitor your trading, you will have the tendency to over-trade or use high lot sizes. So, even though you are using something as proven as price action for your trading, make sure you have a plan to follow.
Many traders try to boost confidence by adding a lot of indicators to their charts. These indicators just become crutches and often give conflicting information. The best way to get the confidence you need is to use simple price action setups and trade them over and again until you master them.
Article Source: FxTradingStock.com
About the Author
Learn Forex Live teaches you plenty of uncomplicated price action strategies you can trade. Sign up on http://www.tradetheforexmarket.com for free training and trading tools.
by: Edward Lomax
Total views: 15
Word Count: 441
Date: Tue, 18 Jan 2011
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