By: Johnathon Fox
So many traders never find consistent profits in the markets as they are always looking for the next big thing or the “Holy Grail”. They never find a method and stick to. Instead they continue their search for a fool proof which doesn’t (and won’t) ever exist. By sticking to a set method a trader gives themselves an opportunity to practice that method and perfect it.
Finding a Method
Finding a method that is simple but logic-based, is the key to having a method that you can believe in. Trading Price Action signals can give you a defined edge in the market. There are many Price Action signals but a few examples are:
• Bullish and Bearish Engulfing Bars
• Pin Bar
• Inside Bar
• 2 Bar Reversal
Price Action gives you a chance to enter and trade as little, or as much as you want. Trading this way gives you as much time as you want, to perfect your craft and become and expert at your method.
Sticking to your Method
After finding a Forex trading method you feel comfortable with, you must form your rule set and plan and then stick with it. If every time you have a losing trade you go looking for a new method you will never perfect your trading skills with that method.
Having a false belief that the Holy Grail of trading exists, will be counterproductive to your Forex trading endeavours. Once you are happy with the method you have chosen you need to set all your mental energies on becoming the best trader you can at that method.
Perfecting your Trading Srategy
Once you have settled on your Forex trading strategy, you’ll need to practice, practice, practice. Perfecting your method means formulating a plan and having rules for any situation the market may present. When going through this process there is absolutely no reason to lose money.
Forex gives traders one of the biggest advantages over other forms of trading, which the ability to trade with a demo account. Demo trading allows traders to become 100% confident in their method before they have to risk a cent. Traders can place trades and see if the method they have chosen really does suit them or if they need to adjust it before investing real money.
Going Live
Only once a trader has proven to himself that his Forex trading strategy is profitable over a sufficient sample size of time and trades, he can consider going live and putting real money on the line. The amount of time this process will take will vary from trader to trader and will depend on what they feel comfortable with. Some traders will be keen to go live after just three months and others after a minimum 12 months. Anything less than 3 months likely won’t give you enough time to determine whether your Forex trading method will be profitable for the long haul. Even if you’ve had a big winning streak during your demo time and you rush to trade on a live account, you may discover that over a large sample size of trades the method does not work as you expected. The lesson to learn: finding your Forex trading method is like finding a spouse – it’s always better to take your time and to know what you’re getting into before making a commitment.