1. Don’t get overwhelmed
It’s easy to feel overwhelmed with information and trading strategies as a beginning trader, it happens to all of us in the beginning. The best way to limit this or avoid it altogether, is to find a mentor, someone to learn from, and piggy back off their success. I have laid out all my trading strategies for you to learn in my price action trading course and in my opinion, the best thing you can do is block everything else out, forget everything you’ve learned, and start over with my teachings from a clean slate and focus only on that until you really know what you’re doing.
2. Don’t freak out when a trade moves against you
This one is big, because most traders, especially beginners, freak out or over-react at the first sign of a trade moving against them. This is much more of a problem in live trading than demo trading, due to the differences in emotion between them, but it is a problem and it needs to be addressed.
A trade moving against you is NORMAL. I’ve had trades move to within 5 pips of my stop loss and go on to be HUGE winners after that. If I had freaked out and closed them out before they hit my stop loss, I would have not only lost money, but I would have lost a lot of profit too. This is the main reason why you need to let your trades play out and not close them out early ONLY because they’ve moved against you.
It’s really pretty simple: Set your stop loss in a logical / safe place (more on this later), manage your position size so that your dollar risk is at a level you’re OK with losing, and LET THE TRADE GO. Don’t micro-manage your trades, just let the market do the work and you go play a round of golf, go to the gym or go to sleep…then check on the trade the next day. Doing nothing with your live trade is usually the best (and most lucrative) move, meaning set and forget it.
3. Focus on the price action.
There was a time once, believe it or not, when people traded without computers. Hard to believe I know, but it’s true. How do you think they did that? It wasn’t with RSI, MACD’s, Stochastics or some automated trading software obviously…it was with PRICE ACTION. They used to read the tape at the exchanges, or they would have the price movements posted up on big boards to read and interpret. They were interpreting price changes or price action. This method is the only ‘natural’ trading method and it’s been around since the 1700’s when Japanese rice traders invented candlestick charts to predict changes in rice prices.
It works, don’t over-complicate it. My unique take on price action trading has worked well for me and if you follow what I say in my course and use extreme discipline and logical thinking along with patience, it can work for you too! No need to clutter up your charts and mind with a bunch of messy and over-complicated indicators or news events. I don’t do it and neither should you because it’s a waste of time, mental energy and ultimately, your money.