How to Make Money Forex Price Action Trading

If you are reading this lesson then the chances are you are ready to learn how to trade price action. It is also highly likely you want to know how you can finally stop making the same mistakes and start making some profits.

This article will cover what you can start doing right now to improve your trading. It will also bust some myths and let you know how a professional trader actually goes about collecting pips from the market.

 

Trade and Act like a Professional Trader

If you want to start making money like a professional you have to start acting and thinking like a professional!

The plethora of amateur mistakes you have been making that have been constantly costing your account, professionals don’t make. These mistakes include:

• Entering trades when you shouldn’t
• Risking too much because you think this trade is a really great trade
• Taking profit when you know you shouldn’t or it’s not in your plan (even worse not having a plan)
• Moving your stop and letting price ride because “price just has to turn soon”
• Not moving to profit when your plan states you should

Get a free trading journal here so you can track and know EXACTLY the mistakes you are making and how to fix them.

 

These are just some of the many mistakes professional traders don’t make.

Please stop and think about this for a second. The market is just one massive opportunity for traders to make decision after decision. When it comes down to it all that separates that great traders from that bad is the decisions that they make.

You have the power to become a winning trader from a losing trader right now!!! All you must do is change the decisions that you make. The bizarre thing is most of the time amateur traders already know what they should be doing, and what decisions they should be making but they lack the self discipline to make them.

Let’s look at the first dot point above, “Entering trades when you shouldn’t”.

The reason this is so common with the 95% of unprofitable traders is because of the feeling or need to participate in the market. Most traders have a feeling that to be a trader they must always be in a trade. A professional understands that the best position can sometimes be not being in a trade at all. Being extremely picky in their trade selection is what puts professional traders above the rest of the pack!

 

What Trades are You Really Entering?

Nine times out of ten when traders are entering into a trade they shouldn’t, they already know it themselves!

They don’t need anybody to tell them because they’re already aware that what they are doing is making a bad decision that could cost them. If you want to be a professional trader you need to get your self discipline in check and begin passing on trades like a professional would.

Next time when you are going through your trade check list and you get through ten of your check points and even just one minor thing is wrong, do what the professional trader does and PASS on the trade. Save you money and wait for the next trade. Be happy in the fact that you have now started taking active steps to improve your trading!

 

Make a Trading Routine

Making a trading routine is something everyone can begin doing no matter what the level of their trading that can have immediate impact on their trading results. It is very important that your trading routine is well thought out, and fits around the rest of your life responsibilities such as family and work.

The first step every trader needs to take is to set up either an office that is dedicated to their trading, or another room in the house where the trader can be in peace. When trading you will be making some very important decisions, and it is important that you have a set area that you can go to that is away from all other distractions including family members. This area should have all the necessities such as computer, internet connection and office furniture.

Once the trader has set their trading station up, the next step is organising a routine that they will be able to complete every day. The trader must organise into this routine time away from the charts. It is very important to have time away from the chart relaxing doing something like playing golf or watching a movie etc

My personal routine is to get up in the morning and have a shower. I then eat a little breakfast and flick on the charts for daily New York close which is my morning time. I then spend about 15 minutes going through my charts analysing my pairs and looking for setups. If there is a setup to trade I set my orders and turn off my charts. If there are no setups I turn off my charts and go and do other things. After this I DO NOT watch the charts during the day.

The next time I turn my charts on is for the 4hr candle close during the UK and US sessions. This is my night time and I will get to check two 4hr candle closes. I carry out the same routine when each 4hr candle closes. I take about 10 minutes to scan the charts for setups. If there is a setup I set orders to enter and then turn off the charts. If there are no setups I turn off the charts. I manage trades I am entered into the next time I have set in my routine to look at the charts. This may be the New York close or the next 4hr candle close. 

All up it takes me roughly 1 hour per day to carry out my trading activities. This includes placing entries when they are there and managing trades. Take note of how I don’t leave charts on and constantly watch what price is doing. Price needs time to move and “do its thing” and it serves no purpose me stressing over every pip up or down.

 

Use Power [Magic] of Compounding

One of the most powerful tools professional traders use is the magic of compounding. Compounding can take ordinary returns and make them extraordinary. An example of how a trader can make 100% on an account with only making 6% a month over 12 months is below.

 

Starting account balance: $100

Month 1: 100 x 6% = $106

Month 2: 106 x 6% = $112.30

Month 3: 112.30 x 6% = $119.0

Month 4: 119.0 x 6% = $126.0

Month 5: 126.0 x 6% = $133.50

Month 6: 133.50 x 6% = $141.50

Month 7: 141.50 x 6% = $150.0

Month 8: 150.0 x 6% = $159.0

Month 9: 159.0 x 6% = $168.5

Month 10: 168.5 x 6% = $178.60

Month 11: 178.60 x 6% = $189.30

Month 12: 189.30 x 6% = $200.60

Total = $200.60

 

As you can see from the above example, using the power of compounding the trader made 100% on their account over 12 months only making 6% a month. If the trader chose to keep their risk the same and not use the power of compounding they would have only made 72%!! This is a 28% difference in the return made, all because of the power of compounding!

 

I hope you have enjoyed this article and can begin to implement the strategies I have discussed to improve your trading right now!

Let me know your comments and questions in comments below;

 

Safe trading,

Johnathon