There are many ways of trading the financial instrument in the world trading strategy and technique tends to vary from traders to traders. Most of the novice traders tend to trade with an indicator based trading system which is absolutely wrong. As a professional currency trader, you should focus on support and resistance level trading. If you relatively new to this industry then try to develop a solid basis in this industry.at your initial stage learning all the details of this market will be a little bit difficult for you. And for this very reason, the expert Aussie traders always suggest the new traders start slow. If you want to grip all the highs in the market then you will learn nothing. Try to follow a simple strategy to make money and do not use the too much complex trading system. When it comes to simple trading system price action trading is the most used trading strategy. Though the system is extremely profitable but some common mistakes are made by the novice traders. Today we will discuss the three most common mistakes in price action trading that every trader make.
Trading the lower time frame
The forex market is vast market and traders can trade in the much different time frame. The new traders in the financial industry tend to trade the lower time frame using price action signal since they get lots of trading signals. But when you execute all the trading signals you are actually losing your quality. Quality always comes first in the world finance. Instead of placing hundreds of trades trying to find a high-quality trading signal in the higher time frame. If you do your technical analysis in the higher time frame then chances are very high that you will make a profit from that trade. Instead of aggressively trading the price action signal wait for the confirmation candlestick. Once all the parameters are full filed execute your trade in favor of the long-term trend.
Taking high risk
The price action trading system is profitable that most traders start taking high risk in their online trading account. But no can assure you that you will have winning trades followed by a winner or loser. To be precise trading is all about probability. If you want to succeed in this industry then you need to trade the price action signal with minimized risk. You might find the best quality trade set-up in favor of the long-term trend but yet you should never risk more than 2 percent of your account capital. Always focus on proper money managed. Losing is just inevitable in trading so if you don’t plan your trade with proper money management you will never succeed.
News trading
Many professional news traders use the price action trading strategy. But all of them use them in a precise manner with the combination of support and resistance level. The novice traders often get fascinated with the lucrative profit potential of highly volatile market conditions and thus trade the smaller time frame during the event of the high impact news release. It’s true that you can make money by using the lower time frame for that you need to learn the art of multiple time frame analysis. So before you gain enough experience in the world trading you should never trade the high impact news data. Try to use the demo trading account and learn the art of multiple time frame analysis. Once you feel comfortable switch back to your live trading account and trade with solid discipline.
Summary: Mistakes are very normal in the life of professional forex trader. But you need to learn from your mistakes and improve your trading system continuously. When you use the price action trading strategy make sure that you trade the higher time frame. Always execute your orders in favor of the long-term trend to limit your risk exposure.
