So you’ve decided you want to learn to trade Forex and have come across a trading strategy called “price action“, yet you have no idea where to start or how to begin trading with this method.
Today's lesson is quite short but may be controversial to some who are lovers of dirt on their chat... some of the questions I am going to be recieving may be from some of you who have already made up their mind to do what they like. But in the forex game you have to be humble enough to learn, unlearn and relearn what you think you know about forex.
Step 1: Learn the basics of Forex trading
The first thing that you need to do in order to get started trading with Forex price action is to build a solid foundation on the core principals of Forex. If you don’t know exactly what the Forex market is, why it exists, or how it’s traded, you should first take my beginners trading course here. This will get you up to speed on the basic building blocks of Forex trading and it will allow you to make a seamless transition into learning how to trade with price action strategies.
Step 2: Take the ‘junk’ off of your charts
That’s right, the next thing you must do right now before you commence any trading is to strip off all your indicators; make your trading charts naked!
Indicators on forex charts are a complete waste of time, you are using second hand information, not first hand price action from the actual market itself. Its time that you completely rid yourself of complex and complicated trading methods. When you create a simple and logical forex trading plan and around the ‘core’ price action of the market, it will make your trading relatively stress free and this will work to influence positive trading habits.
Step 3: Learn simple price action trading strategies
When you trade Forex with price action, it means you are trading off the raw price movement of the market; no fancy systems or strategies, just plain vanilla price action on a clear and uncluttered price chart.
Of all the methods a trader could use to make money on foreign exchange market fluctuations, the most profitable are often the simplest and are usually widely overlooked or dismissed by the masses. Price action trading is one of those undiscovered gems.
Once you strip off all the confusing indicators and other ‘magic’ trading methods from your charts and learn a few price action trading strategies, the simple visual price patterns and signals will start to ‘jump’ out at you with extreme clarity, so go ahead and clean up your charts now!
In the chart below, we can see a good clean example of trading one of my favorite price action setups, the pin bar trading strategy…
Don’t take my word for it, start to learn to trade forex today by downloading a forex charting platform, set up daily candlestick charts and keep it as simple as possible by learning to read the plain price that you see on the charts, and don’t cloud up the chart with complex methods and indicators; keep it basic and clean. For futher reading see these articles...
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