• Emotion is the enemy of the Forex trader
To put it succinctly, the less emotional you are while trading the markets, the better you will do over the long-term. Yet, emotional management seems to be the number one area where most Forex traders experience the most trouble. Whether they realize it or not, the reason most traders lose money in the markets is because they are not managing their own emotions correctly. A big factor in emotional management is not being stressed out or confused as to what your trading strategy or trading system is trying to tell you. However, many traders use trading systems that require them to over-lay tons of indicators all over their charts or download expensive “robot” trading software that claims to fully automate the trading process.
The problem with these indicator-heavy and software-heavy trading systems is that they don’t actually teach a trader how to interpret and trade the “raw” unencumbered price action of a market, and without this knowledge it’s nearly impossible to become a relaxed yet confident technical trader. Controlling one’s emotions in the market is hard enough to do without clouding up the natural price action of a chart with numerous indicators or black-box trading software systems. So, if you really want to achieve the proper Forex trading mindset you need to eliminate these confusing and unnecessary secondary-analysis tools and learn to trade off a plain-vanilla price chart. We do not want to add unnecessary variables to our Forex trading strategy.
• How price action can help you achieve an objective trading mindset
Once you master an effective set of price action trading strategies, you will understand the market and how it ebbs and flows at the most “core” level. Having this knowledge of how to read and trade off the “core” price action of the market, with no other secondary-analysis variables introduced, will work to foster and sustain a clear and objective Forex trading mindset. You won’t be sitting in front of your computer trying to figure out what the MACD is doing in relation to the RSI or Stochastics, or any other silly indicator-based trading ideas. Instead, you will know when your high-probability entry scenario is present because price action setups are easy to spot and easy to trade.
Yes, price action is a discretionary trading method, but over time your price action discretionary trading skills will improve and eventually you will only need to spend ten or twenty minutes a day analyzing the daily charts if you want; no need to sit up all night burning your eyeballs out trying to figure out what your indicators or trading software is telling you. Once you learn how to trade with price action, you learn how to “fish” for yourself in the market forever, no more depending on anything else but your own brain and the raw price bars on a price chart.
• Let simplicity permeate your Forex trading
The beauty of price action trading lies in the fact that it is both simple and effective. Many traders, if not most, try in vain to use very complicated trading strategies and systems because they erroneously believe that trading should be or is technically difficult. The difficult part of becoming a successful Forex trader lies not in the technical chart analysis aspect; indeed, this aspect of trading should and can be very simple. The difficulty lies in controlling your emotions and not over-trading or over-leveraging. If you look at any failed or failing trader, they will inevitably be an over-trader or a trader who risks too much per trade, or both.
Once you learn how simple and effective price action trading can be, you are unlikely to go back to your old complicated trading strategies. The simplicity of trading with a raw price chart will work to permeate into all aspects of your trading. You will find yourself more relaxed, more confident, and more objective about the market when you learn to think about it and look at it from a simple price action-only stand point. This will greatly cut down on the amount of stress and time you spend analyzing your charts and the markets in general, you can then focus more of your time on the most important aspects of trading like creating and maintaining a Forex trading plan and trading journal and generally staying more level-headed and less emotional as you trade.
One final closing note, you should not doubt the effectiveness of price action trading just because it is not hyped widely on the internet. The reason it’s not hyped widely is because people naturally want to over-complicate trading and believe it’s difficult, so the more complicated and “fancy” sounding trading systems are the ones that sell the best. Price action just seems a bit boring to most people because it seems “too easy”. However, price action has been used effectively for literally hundreds of years since the Japanese rice traders invented candlestick charts in the 1700s to help predict the future price of rice. You do not need to use complicated trading systems or strategies anymore, learn how to trade off of time-tested and simple to understand and implement price action strategies and you will find that you think about and trade the markets from a new and refreshing perspective.
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