How to Become a Professional Price Action Trader?

How to Become a Professional Price Action Trader?

There are tons of trading strategy to trade the Forex market. However, the majority of the Aussie traders prefers price action trading is often considered as the best trading system in the world. So what is price action trading strategy?

This is nothing but studying the different formations of the Japanese candlestick pattern and executing trades with managed risk. If you can truly master the art of price action trading system it won’t take much time to develop your skills as a professional trader.

Just focus on the basic rules of investment and trade with the relatable pattern. In today’s article, we will discuss some of the key steps you need to learn to become a professional price action trader.


Learn the three major form of market analysis

Before you start to learn price trading you need to learn the three major form of market analysis. Price action trading is one of the most advanced ways to predict the price movement of certain currency pairs.

Unless you know the proper way to analyze the fundamental data, it will be really hard for you to assess the strength of the market trend. Without understanding the market trend, you are not going to become a profitable trader.

Most importantly, you need to have a clear idea to assess the sentiment of the market. If necessary you should take a professional course to have a clear basis on the three major form of market analysis.

Exploring the reliable candlestick pattern

This is the most crucial part of price action trading strategy. The pro traders use the reliable Japanese candlestick pattern to decipher the price movement of the financial instrument.

So if you want to establish yourself in the Forex trading industry you must learn the perfect way to analyze the Japanese candlestick pattern. Memorizing all the candlestick pattern will be a little bit hard for you but if you focus on the psychological factors behind the formations of each candlestick things will become clear.

Stop testing different trading system in real account. Try to learn price action trading strategy in the demo trading environment so that you don’t have to lose any real money.

The use of a daily time frame

The majority of the new investors uses the lower time frame to execute their trade. But they don’t understand the simple fact quality beats quantity. It’s true you will have tons of trading signals in the lower time frame but the quality will be extremely bad.

For this reason, you should only focus on the daily and weekly time frame. However, if you still wish to day trade the market, it’s highly imperative you learn multiple time frame analysis.

Make sure you are not taking more than 2% risk in any trade while day trading the market. Always remember, no one knows which trade hit the take profit level. So, be prepared for the worst case scenario.

Advanced knowledge on trade management

Learning price action trading strategy is not enough to ensure a bright trading career. You need to focus on money management policy. Those who have very little knowledge on investment business should stick to the basic 2% rules of risk management.

But make sure you learn to scale your trade over the period of time so that you can maximize your profit. Some new investors often say the price action trading system doesn’t work at all. They simply forget every system has flaws in it. You might have a few losing trades in a row but this doesn’t mean you will stop trusting your trading strategy.

Focus on a high-risk reward trade setup so that you can easily cover up the loss. Never trade the market with a negative risk-reward ratio as it kills the main agenda of the trading business.

Kenneth Smith

Kenneth Smith lives in Adelaide, Australia and is full time trader. Kenneth offers you his many trading tips in his articles. All the information presented in his posts are based on extensive experience gleaned from years of working with many trading platforms.