Trading can be done in many ways and every trader is different in the Forex market. You need to develop your trading system based on your trading knowledge to become a profitable trader. If you try to make money based on other people’s trading system the chances are very high that you will become the greatest loser. You need to assess your personality, and based on that, you need to pick your desired timeframe to trade the market. It’s true that most professional traders in the United Kingdom will suggest you trade the higher timeframe data but this doesn’t mean that you can’t make any profit in lower time frame trading. However, lower time frame trading is extremely risky and you can’t afford to make mistakes. Most importantly, you need to have precise knowledge about trade management or else you will blow your trading account. Today, we will give you some amazing tips which will help you to become a profitable trader in the shorter time frame.
Use of price action trading strategy
The price action trading system is one of the most reliable trading systems with which to trade the Forex market. It’s nothing but the study of the raw price data to find the most profitable trade setups at the key levels. Some novice traders say that understanding all the basic parameters of the Japanese candlestick pattern is extremely hard but if know the psychology behind the formation of each candlestick, it won’t take much time to master the art of trading. But when you use the price action confirmation signal in the lower timeframe you need to do the multiple time frame analysis to filter out the false trading signals. Doing multiple timeframe analysis will greatly improve your trading performance.
Simple support and resistance level trading
Keeping things simple is one of the key ingredients to becoming a profitable trader. If you get involved in the binary options trading UK community, you will see that most of the successful traders have a very simple trading system. But developing the perfect trading system is not so easy. Most of the time, traders don’t understand the nature of this market. They simply try to trade this market based on their gut feelings. Try to draw the perfect support and resistance level in the higher time frame. Once you have identified the perfect support and resistance level, switch back to the lower time frame and try to look for potential price action confirmation signal. Some retail traders often try to place trade against the long-term existing trend. But betting against the market trend is nothing but a suicide mission. Make sure that you are placing a trade with low-risk exposure.
The golden 2% rule of money management
Risk management is often known as the Holy Grail of the Forex market. Most novice traders lose money due to their aggressive approach to trading. They even risk more than 10% of their trading capital in a single trade. But if you look at the successful traders in the United Kingdom you will be surprised to see their conservative way of trading. They might be trading the lower timeframe, yet they trade this market by following the simple 2% rule of money management. As a retail trader, you will always have to face losing trades and there is nothing you can do to avoid such loss. You have to consider your losing trades as your business costs.
Trading the lower timeframe data is extremely challenging. If you can follow these simple tips you will see that lower timeframe trading is extremely easy. Being a new trader you should never try to trade the market with your real money. Try to gain confidence by using the demo trading account.