Who doesn’t want to make money in Forex trading profession? Everyone is working very hard to learn the art of trading so that they can make a profit regardless of the global economic crisis. But to do so, you must create a balanced trading strategy which will help you to make a better decision. The new traders often buy other people trading strategy with a hope to make more money. But in reality, this never helps. You can’t make consistent profit from this market by following other people trading strategy. The same is true with copy trading which is offered by brokers like FXTM and eToro (for more information about eToro’s copy trading, read this article: wikitoro.org/etoro-copy-trading). So, be prepared to start working hard to create a balanced trading system.
The smart traders in the United Kingdom prefer to use price action trading strategy since it allows them to find great trades. Though the price action trading system is extremely profitable, the new traders often fail to make a profit due to some common mistakes. Let’s learn more about the common mistakes associated with price action trading strategy.
Trading the 1 hour time frame
Being a price action trader, you should never trade the market in the 1-hour time frame. The experienced traders in the United King always prefer to trade the higher time frame data since it dramatically increases the win rate. No matter how hard you try, you will never find a high-risk-reward trade setup in the lower time frame. Some of you might think the 1 hour time frame provides the perfect data to scalp the market but in reality its very risky time frame. So, focus on the higher time frame to become better at trading.
Trading with high risk
Trading is all about managing the risk exposure most efficiently. The experienced traders in the exchange traded funds industry always suggest to trade with low-risk exposure so that they can protect their trading capital. No one knows which trade will hit the potential stop loss or take profit level. If you intend to lead your life based on the trading profession make sure you are not trading the market with high risk. You should follow the simple 2% rule of money management to protect your trading capital in the long run.
Trading against the major trend
There is saying in Forex market, trend if you friend. You can’t make profit consistently unless you trade the market with the major trend. Unfortunately, the new traders are always trying to ride the newly formed trend and eventually they lose a big portion of their investment. Try to consider the long term outcome of this market. Instead of looking for the trade setups in the lower time frame, switch to daily time frame since it will give you a better picture of this market. Think twice before you execute any trade and you will do well at trading.
Trading the high impact news
The new traders always think they can make a huge profit by executing trades before the high impact news release. But news trading is often considered as the most dangerous task for the retail traders. You can’t make a decent living out of trading unless you trade the market based on technical and fundamental data. Execute the trade after the market dust settles and forget about the low-quality trade setups. Never try to make a quick profit from this market since it will ruin your trading career.
Trading with emotions
As a price action trader, you must have complete control over your emotions. You can’t make a profit by trading the market with emotions since it will always result in heavy loss. But controlling your emotions at the initial stage is hard. You have to focus on long term goals and be prepared to lose trades regularly. Forget about the quick gains in the trading business. Train your mind so that you can lose a few trades in a row. And stick your logics to become a successful trader.
