Price action analysis is one of thee most effective and simple methods to successfully trade the forex market. Simplicity is key in trading any market because a simple method helps you control your emotions more effectively than a confusing indicator based trading system. Any one who has actively traded forex, stocks, or commodities for any period of time understands that emotion management is paramount to consistent profits. Price action setups allow you to have a window into market movement based on price movement, price data is the most significant data no matter what market being traded. It is the visual representation of everything you need to comprehend for your price action trading plan.
Trading the FX market off of price action is a great journey to embark on. The simplicity yet relevance and profit potential provided by price action setups cannot be overstated. Once you learn how to spot specific price action setups you will be on target to consistently profit in the forex market. It is entirely possible to master one specific price action setup and achieve consistent profits off of that one setup. Where many aspiring forex traders go wrong is in thinking they need numerous setups or indicators to make money; they often fall into the trap of assuming more is better in forex trading, when in fact more is usually worse when it comes to trading. The less confusing and jumbled up your charts are the more clearly you will be able to see what price movement is naturally trying to show you.
Many traders over look the method of price action analysis because they think it is too easy to learn or that trading should be technically difficult. The fact is that profiting consistently in the forex market is not technically difficult at all, it is actually technically easy. It is pretty easy to learn price action setups that work with a high degree of probability. What is not easy in forex trading is managing one’s emotions and managing one’s money as well as staying disciplined. This is one of the main benefits of price action analysis; it helps you manage your emotions and stay disciplined by giving you a straight forward yet highly effective and relevant method to base your trading plan from.
Most traders start their trading plan on a shaky foundation that employs a confusing method that they themselves barely understand. Why use lagging indicators that are derived from mathematical formulas that you probably don’t understand which ultimately just show you past price movement that you could have seen in a much more relevant form using price action analysis? The bottom line is that forex trading is an intensely psychological profession, and until you realize that every aspect of your trading plan needs to take into account the psychological aspect of market activity you are likely to be unsuccessful. A solid trading method is usually the first thing forex traders try to obtain when starting out. Generally, they pay way too much for junk systems that just cover up the relevant price movement that you can spot on any naked price chart. Don’t fall victim to the scam of complicated indicator based systems or signal services. Learn price action analysis and teach yourself how to fish in the forex market, then you can eat for free for a lifetime.