Why Trade Forex with Price Action?
Forex price action trading can significantly simplify and improve your entire trading experience. Very often beginning traders confuse themselves by making their forex trading much harder than it needs to be by using trading strategies based on lagging indicators or trading software that only work to over-complicate the process of analyzing a price chart. Using such overly complicated trading strategies in turn works to influence their trading psychology in a negative manner that makes attaining the goal of consistent forex profits significantly harder to achieve. If you could interview a large sample size of professional forex traders you would discover that they mainly employ simple trading methods which make use of core market price data, this is because they have long since realized that there is no advantage to be had by over complicating the trading strategy you use to enter or exit the forex market.
One big reason to trade forex with price action setups is the fact that the most lucrative trading strategies typically revolve around trading with the dominant trend direction and price action trading provides you with an excellent method for entering into these trends at the best possible times, and a big part of your early trading career success will depend on your ability to accurately time your trading entries.
As smaller retail forex traders our main goal is to ride the price action wave created by big market players; commercial and institutional traders because these are the people that really create and maintain forex trends. Specific price action setups repeat themselves in the market on a semi-regular basis, as a result we can learn to spot these setups and jump aboard the trend created by bigger market players, and by using such time-tested and repetitive price action setups we give ourselves the best chance at riding the forex market momentum to consistent profits.
Another main reason to use forex price action to trade with is that it can be traded very effectively on the higher time frames which allows you to live your life as you normally would without having to check your charts every 15 minutes. You can effectively trade the forex market with simple price action setups on the daily or weekly charts which gives you the power to control when you trade, rather than having to be a slave to some intra-day trading system. However, if you do want to trade intra-day, price action is still a very effective strategy to employ as there are many excellent signals on the 1 hour and 4 hour time frames for those traders who want to be more active in the market. To sum this point up; forex price action trading is an extremely flexible trading strategy that can be adapted to any individual schedule or trading style.
Finally, most traders who have actively traded the forex market for any significant period of time will acknowledge the fact that trading success is mostly a result of proper trading psychology and money management. Many novice traders begin their career by thinking that technical strategies are much more important than the psychological and money management aspects of trading and they thus end up losing money by getting stuck in what seems like a constant fight against the market. What forex price action trading provides you with is a simple, logical, and most of all effective trading strategy that allows you to focus more of your time and energy on the very important psychological and money management aspects of forex trading.
Click here for some examples of price action strategies: Price Action Trading Strategies
