Trading

Understanding Penny Stocks for Day Traders

If you want to reach a state of financial freedom, you need to pick the right lane. Do you want to focus on the big time stocks that are stable and very unlikely to be volatile? Or do you want to trade in a space where the stocks are cheaper, but more likely to make moves to make you profitable? Penny stocks can provide that type of environment even for a new trader.

Penny stocks, as defined by day traders, generally fall into the category of $2 to $10 per share. They don’t actually cost pennies. They represent small cap companies that are trading with enough volume so that active traders can leverage enough shares to make a profit with their trades. It is a delicate balance and it can require trading on margin, which is basically trading on credit.

As an aspiring day trader, you need to be able to anticipate trends and pick hot stocks before they make their moves. It takes time to learn how to do that. That is where a day trading education site can come in handy. Finding a place where you can learn strategies and techniques from veteran traders through online video courses, where you can interact with other traders in a community of like-minded people, that can be a real asset for a newbie. It provides a place to learn valuable lessons before risking real money.

Penny stocks can make huge jumps during a particular day of trading. Being able to anticipate which stocks are about to make a jump is a skill that can be learned. You need to look for the right market conditions, the best historical data and technical indicators that precede a run on a particular stock. If you can jump in at the right bar at the right time, you can position yourself for a trade that makes 20-30% profit. Add up a bunch of those and you are in good shape for the day. Then string 4 or 5 good days together and you will have a profitable week. That is how you start.

The key is to search for the medium sized wins, instead of going after huge scores. You are not going to find the next Apple or the next Facebook in penny stocks. That is looking for a lottery ticket. Playing the lottery is very bad odds. You want to look to be profitable 60% of the time and keep your profit/loss ratio at 2/1. That means that your losses are small enough that your profits are going to come through on top.

Being able to trade in a simulated market with virtual currency gives you a chance to make the wrong moves and still survive to trade another day. That makes the learning curve a lot shorter when you get into trading real money.


Do You Have What It Takes To Be An Algorithmic Trader?

On the surface, algorithmic trading seems like the very definition of passive income. Imagine it. Entrusting your portfolio to a bespoke piece of software designed to buy and sell stocks based on algorithms that are designed to facilitate growth. It must be like having a tiny robot stockbroker in your pocket who never gets tired, never refuses to answer your call, never makes a human error and isn’t motivated by greed or self interest. WIth a tool like that in your pocket, you could sleep at night knowing that your investments are algorithmically primed for growth that will lead to lasting wealth.

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Well, if it were that easy, everyone would be doing it. Algorithmic trading is a complex enterprise and while it involves the use of automated processes, that doesn’t mean that your algorithms generate money for you day in and day out while you kick back and sip your latte. Like any form of investment, it carries with it an element of risk and unless you give it the effort and attention that it deserves, you could find yourself losing everything. If you find yourself frustrated by an inability to make your portfolio grow sustainably, algorithmic trading may be able to give you the boost you need.

What’s wrong with normal trading?

Absolutely nothing, and if you have a good sense of the markets and a finger on the pulse, there’s no reason why you can’t continue to grow your money. Some, however, turn to algorithms for a number of reasons. Algorithms can scan the markets much faster than any human being and while they may be fallible they’re far less prone to error than human investors who may be motivated by irrational factors like instinct or a hunch. Even veteran traders will inevitably miss out on dozens of fecund investment opportunities even if they spend their day glued to the screen.

Algorithmic trading is open to anyone

Algorithmic trading is nothing new. It’s been used by hedge funds and investment banks in some form or other for decades, but it’s only relatively recently that a subculture of mathematicians, programmers, and entrepreneurs have begun to develop their own trading platforms in order to grow their investments beyond the limitations of regular trading.

What you need

So, by now your interest in algorithmic trading is likely piqued and you’re wondering what you need to get started. Well, the first thing you need is patience. While algorithmic trading is fairly straightforward in principle (a robot does it), the enterprise is a very complicated one, and you can expect to spend a long while getting to know the process before you entrust your portfolio to it.

You may expect comprehensive coding knowledge is necessary and while it’s certainly advantageous it’s not necessarily essential. What you will need is significant time, money and resources to invest in buying or developing the coding infrastructure upon which to build your trading algorithms.

Start small

The first thing you need to do is understand the conditions that necessitate a purchase or a sale and this comes from parsing data from the markets. From a coding point of view your conditions provide the “ifs” to which your code provides the “then”. If a stock dips below a certain amount buy, if a stock tops a certain amount sell.

Your first step should be to create a flow chart of conditions and what how you would expect your algorithm to react to these conditions. Once you’ve done this, the next logical step would be to create a spreadsheet transposing the data from the spreadsheet as suggested here.

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Build or buy

Once you have a working understanding of how a trading algorithm would work, you need to make the decision whether to build or buy your own. Both require sizeable investment. While sole trading software like AlgoTerminal is traditionally intended for use by hedge funds and professional quants, individuals can purchase ready made trading platforms. Be advised, however, that they do not come cheap. Building your own algorithm requires extensive coding knowledge but it also affords you complete customization, allowing you to develop a platform that’s entirely tailored to your needs. If you are pretty code literate but don’t relish the idea of starting from scratch you can build on a free source like Quantopian.

A serious investment

Whichever option you choose, swimming in the waters of algorithmic trading requires a serious level of investment. Purchasing a ready made platform can be very expensive yet offer you quick market access while taking the time to build your own may prove a long drawn out affair. You can expect a serious investment in your time and resources… But one that may reap huge dividends.


Learn to admit when you are wrong

 

 

We have seen many traders who cannot admit when they are wrong. It is not a psychological disorder among the traders but it is a common disorder that can be found in our humans. When we are trading in forex, we do not like to admit that we have done something that is wrong. It is better to join in a war than admitting and this is why many traders in forex lose their money. If you want to advance in your career, you should know that is a great quality to admit when you have done something wrong. It will not disrespect you or make you small but it will increase your dignity.

Professional traders do not feel small when they are admitting their mistakes. They even say it with pride that if they had known it, they would not have done it. They told their mistakes and wrongdoings in a way that you will laugh at them but at the same time, there will be respect for them in your minds. It is not something easy for humans to admit when you have done wrong. If you can do, you will reach the peaks of forex trading career.

Stubborn novice traders

Majority of the novice traders are stubborn. After learning a few basic things about the financial industry they think that they have all the trading knowledge and they are the best traders in the world. They simply start floating in the cloud of false confidence and beginning trading with big risk. Soon they lose a huge amount of money and start blaming the market. But in reality they are the one to be blamed. Being new to this section you need to learn to admit your mistake. Never feel down if you make many mistakes since it is just natural process to make mistake in new things. But make sure that you are making yourself a better trading by assessing your losing trades.

Keep your trading chart clean

Some rookie traders often mess up their trading platform with too many indicators and EAs. But trading needs to be done in a simple environment. In fact, you need to develop a simple trading system based on the key ingredients of this market. Learn to trade the key support and resistance level using the price action confirmation signal. Make sure that you are not executing your trades’ against the long-term prevailing trend since it is one of the easiest ways to lose money. When you place your trade, never risk more than any amount which you can lose. Be more concern about your investment rather than your profit. If you can stay in this game then making money will not be a problem for you. Save your investment at any cost.

Admitting will develop your trading mindset

The mind is the limit of your success. If you can think something in your mind, it is also possible to make it happen. Traders with successful careers always admit their mistakes. They do not say they did not know or they have done something for helping the traders. They admit their mistakes, they say they had done the wrong thing and lost their money by their own and they try to develop their career. When you admit and stay disciplined in your career, it helps to develop your trading mindset. This mindset is important for your career growth. If you are a professional trader and you cannot admit your mistakes, you cannot teach the other traders. They will come to you but not later in your career as you cannot admit your mistakes. Learn to hug your past mistakes.

It builds your strategy and makes you disciplined

When you are admitting that you are wrong, it also builds your strategy. It makes you disciplined in forex and you will trade the market with more profit. Traders with developed strategy and good discipline always succeed in making the profit.


Currency Valuation and its effect on Forex market

Currency valuation is the setting the exchange rate of a nation’s currency. It is very important as the national government can influence the price rate of the government currency to make some important decisions like boosting their international export and also to lessen the foreign debts sometimes.

We are going to give you some example how a change in currency valuation can affect the Forex market and also the international trade. Remember that when we are talking about Forex market, we are not talking about only Foreign Exchange market, we are also talking about the international financial and investment market and agreements.

Boosting exports by devaluing currency

One of the classic example how a fall in the price of a national currency is the sale of European cars to the US markets. Many US citizens use cars which are made in Europe and imported to the United States. If the European Union devalues their currency, it means the value of Euro will fall against the dollar and people can buy less expensive cars in the US. This is one strategy how countries devalue their national currency to export imports.

What is effect will this devaluation have in Forex? The first effect will be that the Forex market will be volatile. Euro and US Dollar are the two most traded currency pair of the Forex industry. When the price of the Euro falls, it haves an impact on Forex industry as well. Though European government may only devalue their currency for fostering their imports, it will have an effect on the investment and Forex world.

Making the market volatile

Though not all of these currency valuations are taken by pre-measured steps in Forex trading industry, sometimes there are events which may happen to change the value of the national currency. For example, if there is a country experiencing Hyperinflation which has happened in Zimbabwe, they will have more volatility in the market. These volatile markets are one way of making money, but they are also a market to lose your money. You can trade the market from Singapore but still, you will easily experience the impact of global economic change. Many traders in Singapore of consider this as the essential part of trading. In fact, it is true since these major changes of the strength of a certain currency create a high level of volatility in the Forex industry. And if you know the perfect way to do the market analysis then market volatility will be your best friend.

Have you really understood what we want to say?

We have doubts if you really have understood our intellectual discussion. To keep things simple, remember this is a very hard thing to digest and we do not expect you will understand it from top to bottom. As you trade the market, you will see that change in currency valuation is bad for Forex and traders to like to trade in a more stable currency valuation market. Being a currency trader you need to trade with a stable currency pair. For this reason, many Singaporean traders only trade the major pairs. It’s true that the synthetic pair often offers great profit taking opportunity but in the long run, their price evaluation can never be measured with a standard scale. The fluctuation is so high that any trader can lose a huge amount of money in a fraction of a second.

Summary: Currency trading is one of the most difficult tasks in today’s world. But once you learn the perfect way to assess the strength of the economic performance of a certain country, you will see things are a lot easier for you. This type of assessment is often known as fundamental analysis. So make sure that you have solid knowledge about technical and fundamental analysis as a professional currency trader.

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CFDs, Binary Options, Digital Contracts, what’s the difference?

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If you are a trader who is new to the online trading scene you may be wandering what the difference is between all the retail instruments that you can trade.

What first started as simple Forex and Equity has now morphed into a massive industry with a number of different instruments that one can trade on including CFDs, Binary Options and a relatively new concept called the Digital contract.

Indeed, no one can blame the new trader for being slightly overwhelmed. The industry is constantly changing and it can be hard to keep track of the different ways individuals can make money in the retail trading market.

However, a little bit of research will no doubt help new traders make the most of these instruments? Given the unique nature of these products, they offer a number of different strategies that one can implement.

In this post, we will run through an overview of just how these instruments differ and what type of strategies one can implement.

CFDs

CFDs (or contracts for difference) are one of the oldest types of instruments on the market. Essentially, a CFD is a spread betting type instrument where the trader will get paid according to movements in the asset.

The trader does not own the underlying instrument but instead has entered into a contract with the broker at the entry price. The trader agrees that the broker can mark the CFD to market at the end of every day and roll the position forward every day.

Another important characteristic of CFDs is that they sometimes involve a large degree of leverage. In other words, the trader can enter a position that is considerably larger than the money that they stake on the trade. This is of course a double edged sword as the price can also go against the trader.

Hence, when trading CFDs, it is quite important that the trader makes use of stop losses that are well placed that can either realise the profit that the trader aims to achieve or can stop a loss when the trade goes in the other direction.

Binary Options

Binary Options are a relatively well known exotic option on Wall Street and have been used for a number of years. It was only in about 2008 that they were being offered on the retail market to average investors. One needs to understand the basics of binary options before they can start trading them.

A binary option is in essence a variant of a traditional financial option. It has the same characteristics, namely a strike, expiry time and price. The difference between a binary option and a CFD is that a binary option has a binary payoff. The trader can either get 1 (or 100) or 0.

This makes Binary Options a relatively straightforward type of instrument as the trader knows from the outset how much they are likely to gain or lose on the investment. It gives a certain degree of certainty for the investment which allows a range of binary option strategies to be employed.

In the case of simple High Low Binary Options, the investment is relatively straight forward and easy to enter. The trader either thinks that the price of the asset will go up or will go down. In the latter case he will enter a PUT option and in the former a CALL.

If the price goes up in the trade expiry time and the trader entered a CALL option then the option expires in the money and the trader gets the positive pay-out (100). If, on the other hand, it went the other way he will lose the initial investment. Of course the opposite can be said for the PUT.

This is why Binary Options are sometimes thought of as a “bet” on the direction of the asset. However, one should not assume that binary options should be traded as a type of casino bet as they are indeed an investment instrument which is priced uniquely.

Digital Contracts

These are a relatively new investment instrument that has been made available on the market. They are a combination of a binary Option and a CFD. They are essentially contracts where the trader can either enter a PUT or a CALL.

In its essence, a digital contract offers the trader the chance to enter a binary like trade with a number of different strike levels. It also offers the trader the chance to exit the trade prior to expiry and realise the profit.

These strike levels range from those that are close in the money (near current price) to deep out of the money (far away from strike). Hence, the range of payoffs that are available to the trader are quite diverse. The trader could make small gains on the instruments by entering contracts which are close to in the money. They could also make large gains on those contracts that are far out of the money.

This could work well for the trader that aims to make a profit from a large movement in the price on events such as price action moves on release of important economic news. The trader could enter contracts that are deep out of the money.

Conclusion

Although there are a range of instruments that one can enter on the retail market, each will serve a different purpose. It is important to make sure that you understand the risk and returns involved with each of these instruments.

A well thought out strategy will make use of a range of these instruments. This is possible these days given that most brokers provide a range of these instruments on their platforms.

 


Amazing Way to Master The Art of Chart Pattern Trading

forex market

Chart pattern trading is very much popular among the professional traders. If you want to catch the large moves in the market then it’s highly imperative that you learn the basic chart pattern in the forex market. Most of the novice traders in the forex market try to trade the high impact news release without knowing the market details and thus they incur a heavy loss in the financial industry. If you truly want to become a professional trader and want to catch the large movements in the market then it’s highly imperative that you develop a strong basic in the CFD trading industry prior to real life trading. The success rate in the forex industry is so low compared to other business in the world only due to the lack perfect trading knowledge. In this article, we will learn how to master the art of chart pattern trading in the forex market.

Trade the higher time frame

Most of the novice traders in the financial market tends to trade the lower time frame in the market and thus trade low quality trading signals. But if you look at the professional traders then you will see that every single one of them is executing their orders in the higher time frame. The novice traders simply think that the more they will trade the more money they will make. But when it comes to real life trading it’s totally opposite. So make sure that when you trade the chart pattern in the forex market you look for the reliable pattern in the higher time frame. If you look at the professional traders at Saxo then you will notice that every single one of them is trading the chart pattern in the higher time frame.

Figure: Professional trading environment offered by Saxo

Use price action confirmation signal

Price action trading strategy is very much popular among the forex traders. Most of the traders in the CFD trading community executes their orders in the market by using price action trading signal. So when you spot a possible chart pattern in the forex market make sure that you trade them by using the price action confirmation signal. It’s true that in the very beginning you will have a tough time to trade chart pattern with the help of price action confirmation signal. But once you master the art of price action trading strategy in the market you will find it extremely reliable and profitable.

Fundamental factors

The forex market is an extremely volatile market and most of the time the breakout of the chart pattern occurs during the high impact news release. The novice traders in the CFD trading industry tends to execute their orders in the market based on technical analysis only. But if you truly want to ensure high-quality trade execution in the market then you need to do the fundamental analysis prior to chart pattern trading. In the eyes of trained professional fundamental factors are often considered to be the most powerful price driving catalyst in the forex market. So make sure that you do the fundamental analysis along with the technical analysis to execute a balanced trade by using the chart patterns in the market.

Forex Trading

There are many different ways of trading the financial instrument in the world. If you want to trade the high impact news release and catch the large movements of the market then make sure that you use reliable chart pattern in the market. Though chart pattern trading is very much profitable and reliable but yet you should follow proper risk management factors in every single trade. Last but not the least never trade the market with the money that you can’t afford to lose.


These are the Best Hours to Trade the Market

One of the great things about trading forex is that the markets remain open 24/7. Somewhere, that is. As the market opens in one part of the world, it closes in another, but there is always a market open for trading. However, not all hours were created equally, and it is not profitable to trade during specific hours. Knowing how to trade, when to trade, which pairs and where are all part of what sets novice forex traders apart from the more profitable and experienced traders. Here’s what you need to know to get started.

Trading Times in Forex

Basically, there are three time zones you need to know for trading. There is the London market, which opens at 3am and closes at 11am, the New York market, which opens at 7am and closes at 4pm and the Japanese/Australian market, which opens at 7pm and closes at 3am. So you can basically trade 24/7 if you want to. But, keep in mind that there are fluctuations within each trading time zone, so movements are not consistent throughout each session. Watch the market and make your trades when the markets are the busiest. During down times, take a nap and come back when the markets are booming.

Choosing the Best Trading Sessions

For the best results, choose a period during which the opening times of two markets overlap one another so you can trade two markets simultaneously. When two markets are open at the same time, you should see a higher volume and more volatility. For instance, when both London and New York are open, there are loads of trading opportunities on top of the regular movements of prices. Using your own trading plan during these time segments can yield great profits.

Potential Pairs

During the periods of overlap, the currency pairs that are the most active are the USD/CHF, the GBP/USD, the USD/JPY and the ERU/USD. The most profitable hours for those overlapping currency pairs are considered to be the 3 hours from 8am until 11am. This coincides with the times that various economic releases are published. Keep in mind that you’ll want to trade currency pairs at hours that the related markets are open.

Days to Take a Rest From Trading

Just as there are best hours and days to trade, there are also days that can be a total waste of time. Specifically, most traders go easy on Sunday trades. Nothing is moving with the currency rates on Sundays, so there’s not much to trade. The same is true on Fridays in the late afternoon. On Friday afternoons and on holidays, the markets can be unpredictable and it’s best to avoid them.

Markets Around the Clock

With forex, everything is related. Besides looking at the ideal hours to trade, watch what’s going on around the world. If one currency pair makes a big move either up or down, it will affect all the other markets. Pay attention and make the best trades, no matter what hours and pairs you choose!

 


Trade.com Forex and CFD Broker Review

Trade.com allowsImage and video hosting by TinyPic you to trade CFD and Forex worldwide. It is run by the investment company LeadCapital Markets. LeadCapital Markets is regulated by CySEC..Trade.com was established in 2009. They operate out of Cyprus and provide regular updates through their Twitter account. Currently, they are not accepting US citizens.

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Account Types

The site offers three different trading account types. The best account for you will depend on the amount that you have to deposit. The minimum deposits for each account are $100, $2500, and $10,000. Each account offers a variety of different features, with the premium account offering all of them to its users.

Classic Account

The classic account has a minimum deposit of $100. It’s perfect for people that just want to get their feet wet. With the classic account, you will receive access to their webinars and video tutorials to show you how to use the platform. You will also have a dedicated account manager that you can speak to and a 24-hour customer support service that you can contact if you have any questions or issues.

Standard Account

The minimum deposit for the standard account is $2,500. With the standard account, you will be able to receive automatic text messages that will notify you in real time with Trade.com Market updates.
This can help you make or save positions when unexpected events occur. Many people use this feature as a safeguard against their positions in case there is a sudden drop in the market.

Premium Account

The highest-level account that they offer is their premium account. The minimum deposit to open a premium account is $10,000. With this account, you will gain access to premium daily analysis which and gain access to their premium customer support.

With their premium customer support, you will receive impressive and immediate help from their top staff members. If you have a question, you should expect to get the answer to it right away with their premium customer service feature.

Opening an Account

Demo Account

If you are new to Forex trading, we recommend starting with one of their demo accounts. Their demo accounts are completely free to use. It gives you access to virtual money which you can use just like real money.
Use the virtual money in a demo account to simulate what you would do once you deposit real money into your account. Once you get the feel for the platform and understand how to earn on your investments, you can switch over to one of the normal accounts that they offer.


Binary Options Trading for Beginners: What to Watch Out For

“An investment in knowledge pays the best interest.” – Benjamin Franklin

Are you interested in trading on the global financial markets? Your friends have told you about the relatively new investment vehicle known as binary options; however, after you visited your best friend Google, and readhow many people are adamant that binary options trading is akin to gambling, you are a bit nervous of following your friends’ advice. You have also read that binary options trading is a very high-risk activity which you will more than likely fail at; therefore, losing your entire investment.

Are the above statements correct? Is binary options trading similar to gambling? Is it a very high-risk activity, and, finally, will you lose your entire investment if you invest in financial options?

Before we look at the answers to these questions, and, before we determine whether the above statements are true or not, let us look at the definition of what binary options are. My personal belief is that if I acquire an in-depth understanding of a topic, then I’ll be able to make an informed decision.

Binary or Financial Options

According to Investopedia.com, a binary option “is [a] type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money. The success of a binary option is thus based on a yes or no proposition… A binary option automatically exercises, meaning the option holder does not have the choice to buy or sell the underlying asset.”

In simple terms, when you trade in binary options, you do not purchase shares in an underlying asset. You trade on whether you believe that the share price of this asset will rise or fall within a specified time-frame. It is, thus, easy to conclude that binary options trading is gambling because it sounds as though deciding whether the price of an underlying asset will move up or down is based on luck. However, this is not the case. To determine which way the price of an underlying asset will move is a combination of knowledge, skill, experience.

Things to watch out for when investing in financial options

Avoid fly-by-night brokers

Because of the increased access to the internet, and the growing number of online trading brokers opening up, it’s very easy to choose an unreliable online trading brokerage to partner with. Statistics show that about 50% of the world’s population currently has access to the internet via mobile devices. Therefore, it’s important to ensure that you open an account with a reputable broker. Read reviews written by experienced traders and look at the different brokers’ website. Companies such as Lionexo pay large sums of money to ensure that their websites are professionally developed, with enough information for you to be able to determine whether they are a reputable firm or not.

Don’t guess, educate yourself

The online trading partner you choose should have a comprehensive education centre with a trading academy, additional articles, glossary, FAQs, and a list of assets that the company offers. There will also be a demo trading platform which you can use to practice placing trades before you move onto the live platform. Avail yourself of all of this education material to ensure you know what you are doing before you start trading on the live platform.

Avoid indecisiveness

Don’t vacillate once you have determined what trading strategy you are going to employ. Once you have made up your mind on what to trade, stick to your decision. Trust yourself even though it can be scary watching the continued volatility in the global financial markets. However, if you change your investment strategy in the middle of trade, you run the risk of losing your initial investment.

Refrain from placing large trades

During volatile and unstable market conditions, it is advisable to invest small amounts when placing trades. In this way, you will protect your investment capital should the market move in the opposite way to everyone’s expectations.

Final words

There is no doubt that, in the current geopolitical and socio-economic instability, it is more of a challenge to trade successfully on the global financial markets; however, with thorough research and proper planning, you stand a good chance of investing successfully.

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Some of the common mistakesin price action trading – Exchange Traded Funds

Trading the financial instrument is getting huge popularity among the professional traders due to its extreme level of reliability. There are many traders in the forex market who uses tons of indicators to filter out the best possible trades in the market. But at the end using tons of indicators doesn’t help the reality traders at all. Most of the retail trader’s fails to make money since they rely too much on the indicators. Indicators are two types, leading indicators, and lagging indicators. The leading indicators always give early trading signals to the traders where the lagging indicators give a late signal. That means if you trade the market using the indicators then you will never be able to execute any trades in the market with the real time movement of the price. In exchange traded funds, it is extremely crucial for the traders to understand the real time movement of the price. The price action trading strategy is developed on the raw price movement of the price and its gives the trader’s real time information about the market dynamics. But trading the financial instrument with price action trading strategy requires pin perfect execution and experience. In this article, we will discuss some of the most common mistakes in price action trading.

Using the lower time frame: Price action trading strategy is based on the raw price moment and it allows the traders to identify the potential trading spot to the traders. Most of the novice traders trade the lower time frame after learning different price action setups in the market. They simply use the lower time frame since lower time frame offers more trading opportunity to the traders in exchange traded funds. But in order to make a consistent profit and earn a decent living by trading, you must trade the higher time frame. There are lots of false spikes and movement in the market and when you use the lower time frame then you actually expose yourself to false signals in the market. In the eyes of trained professional trading, the financial assets with price action setup should be always done in the higher time frame. If you trade the market in the higher time frame then you will be able to execute your orders in the market without worrying about the false setup.

Taking too much risk: Those who are trading the financial instrument for a long period of time knows the importance of proper risk management factors. They always make sure that they execute their orders in the market by following proper risk management factors regardless of their trading setup and probability. They simply rely too much on price action trading strategy and thinks that it will allow them to make profit 100 percent of the time in exchange traded funds. But if you trade the financial assets then you will always have some losing orders in the market.SO when you trade the market with price action trading strategy always make sure that you use proper risk management factors in every single trade and never risk more than 2 percent of your trading capital at your initial stage.

Avoiding the confirmation signal: Those who are trading the forex market with price action trading strategy knows very well that every price action candlestick pattern in the forex market comes with a confirmation candlestick pattern. The expert price action traders always make sure that they execute their trade in the market after the formation of the confirmation signal in the market. It’s true that by using the confirmation signal in the market you will have to use a little bit wider stop loss but if you truly want to master the art of price action trading strategy then you must use the confirmation signal in the market. Most of the retail traders fail to money in the forex market by using the price action trading strategy due to their aggressive trading style.

Avoiding the fundamental news release: Price action trading strategy is extremely profitable and reliable. Most of the retail traders in the forex market tend to forget about their fundamental analysis since they think that price action trading strategy is enough to ensure their profit in the market. But in reality price action trading strategy is based on the combination of technical and fundamental analysis.SO if you ignore the fundamental news release in the market then there is a high chance of losing in the market. As a professional price action trader, you should always execute your trade after analysis the fundamental factors in the market. The long-term prevailing trade in a currency pair changes its trend on the event of the fundamental news release in the market. So always make sure that you assess the fundamental factors before taking any trades in the market. Every single professional price action traders assess the fundamental factors and market sentiment before they execute any signal trade by using the price action signal. By using the fundamental analysis you will save yourself from many losing trades in the market. Most importantly it also allows the traders to know about the prevailing strength of a trend in any currency pair.

Summary: Price action trading strategy is one of the most profitable trading strategies in the forex market but most of the retail traders fail to make money due to some common mistakes. So if you truly want to master the art of price action trading strategy then you need to learn from your mistakes and trade the market with proper risk management factor.

 


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