6 Steps To Start Your Price Action Trading Journey

So you’ve acquired an interest in price action forex trading and you want to get started as soon as possible, but you aren’t quite sure how to begin, or perhaps you aren’t quite sure if what you are currently doing is getting you started on the right track.

Does this sound like you? If so, read on, because today’s article is going to take you step by step through the very beginning stages of learning to trade forex with price action.

 I am going to lay out in very clear terms exactly what you should do to get your forex trading career off and running to a solid start. Let’s get started…

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The first thing you need to do after deciding you want to learn how to trade the forex market, is find a trading strategy or trading setup that makes logical sense to you and that you know has worked for other traders.

Once you find this strategy, study it intensely, focus in on the main concepts and don’t deviate from your chosen strategy; genuinely focus and embrace it.

Too often beginning forex traders will switch trading strategies after not really giving the current one they are using a serious effort.

 No trading strategy is going to bring you instant success without any study and effort, and the ones that claim to do this are almost certainly scams.

If you want to learn how to trade the forex market with price action strategies, then you need to truly commit to this trading strategy and embrace it completely, don’t get distracted by the myriad of other trading systems and strategies out there, you must put all of your focus and mental energy into mastering the art and skill of price action if you want to be a consistently profitable price action trader.

2. Begin your forex education and begin demo trading…

Now that you have picked your forex trading strategy it is time to find a quality source of forex trading education on the particular strategy you want to learn to trade with.

Once you find a trusted and genuine forex trading education source, you should begin to absorb and learn from all the materials they offer.

While you are studying this material you should be observing the charts, watching the price action, and generally studying how the concepts you are learning apply to real-time price movement.

You can open a demo account to get this process rolling; begin taking notes and logging any demo trades that you take which are in-line with the concepts of the forex trading strategy you are learning.

You can record your demo trades in a spreadsheet or notebook, include a snapshot of the chart containing the demo-trade setup that you took, save it in a folder on your computer or print it out to use as a reference later on.

3. Begin to morph your demo-trade observations into a draft forex trading plan…

As you build your demo-trading track record and you get a decent amount of trades logged, you will begin to notice that some trade setups worked better than others in certain market conditions.

Keep record of the types of setups that you see working most often, record the specific setup and the market conditions that it formed in (trending/consolidating/quiet/volatile), make sure you note all important factors in these records; the type of signal or setup, the direction of the market at the time of entry and exit, nearby levels that acted as turning points, note the time frame, and make sure you record the potential risk / reward that these setups are providing.

By doing this you are building the basic foundations of your trading journal that we discussed in step 2, this will become your actual trading plan later on as you progress and master the trading strategy you have chosen.

This 3rd step of building your trading journal and drafting your trading plan is essentially just about you making and recording observations of things you see working in the market, according to the concepts you have learned in your trading strategy educational material.

Record as much as you can and keep it all for later reference, this step is about learning to use the concepts of the trading strategy that you will employ, so figuring out what works and why, is very important in building your final forex trading plan.

4. Start trading with your draft plan…

Now that you have a draft forex trading plan, it is time to start logging your demo trades officially; as if you were trading them for real.

At this point you are training yourself to stick to the basic concepts in your trading plan, during this period you will also be tweaking and improving your trading plan; adding the finishing touches.
 This means you will really be focusing on and recording the concepts that you see really working and that you understand clearly, this will work to solidify your trading plan.

There is nothing wrong with asking questions of your trading mentor or trading peers at this point, if you feel like you need to study more and go back and re-read or re-watch the educational materials that you learned from, then by all means do it, you want to make sure you thoroughly understand all the concepts now and that you are completely happy and confident with your trading plan.

5. Finalize your trading plan…

At this point you want to finalize your draft trading plan and trading experiences into a final forex trading plan.

If you are a price action trading student your plan should focus on one or two core price action setups, after you finalize your trading plan you should repeat the process from step 4; log demo trades and keep up your study and discussion with peers and mentors.

By this final step you will likely have simplified and condensed your thoughts and ideas from the earlier stages of your forex trading educational journey; at this point it is time to begin implementing and testing risk reward and money management techniques on the trading strategies in your trading plan.

6. Making it all work…

Implementing all of the steps above will not mean much if you are not using an effective forex trading strategy like price action.  

Learning to master the charts by gaining a thorough understanding of daily price dynamics in the forex market will allow you to clearly see what is happening in the market at any given point in time.

The simple and realistic approach of learning to trade off naturally occurring price action setups is a trading strategy that has been effectively used for hundreds of years.

 Once you are properly trained in the unique and proprietary way that I personally have successfully traded price action for years, the setups that I teach will begin to “jump” off the chart at you; practically begging you to trade them.

 There is no confusion or doubt once you become a proficient price action trader, this is because you are trading with the first-hand data of the market; pure price action.

SOURCE:http://www.learntotradethemarket.com/forex-currency-trading-blog/how-to-start-your-price-action-trading-journey