In this article, I will give you a brief overview of my trading journey and where I am today as a result. Before we get started, I just want to get “real” with you for a minute by telling you that trading is not a “get rich quick” scheme nor is there any “magic bullet” or “Holy-Grail” trading system out there. Like you, I was attracted to trading because of the financial freedom it can bring you, as well as other forms of freedom; freedom from bosses, from mundane routines and the “9-5” drone culture of going to “work” everyday.
However, what most people (including myself) don’t realize in the beginning of their trading careers, is that trading success is something that takes a different amount of time for every trader…but it most certainly IS attainable. In my experience from working with thousands of traders, most traders have an unrealistic expectation of being able to quit their jobs after just a month or two or three of trading their relatively small trading account. This is not how it works, unfortunately. I spent about 3 years struggling, looking for that “Holy-Grail” and experiencing huge account ups and downs before I finally realized two critical things: 1) I was trying way too hard via trading too much, thinking too much and analyzing too much, and 2) I was making trading way more complicated than it need to be. I eventually realized after much trial and error that I just needed to be a minimalistic trader.
In my first 3 years of Forex trading, I was an extremely motivated market student, undergoing intense Forex training and study as I could fit into my life. My focus was to learn as many trading strategies as possible, with the common goal to make money and quit my job. Like most traders, my early Forex trading account statements where poor, in fact, I blew up many small accounts whilst learning the do’s and dont’s. The tables only turned when I discovered an extremely simple methodology to identify trade setups on a “raw” and stripped-down price chart, that methodology was price action trading.
When My Forex Trading Changed
My success in Forex trading started when I finally started to recognize the repetitive behavior of the daily Forex price charts. There was a transition period in my Forex trading career when I started to move from the 1 hour charts to the 4 hour charts and then finally to the daily charts. I couldn’t believe I had been overlooking the higher time frames in Forex for so long, and yet they offered some very clear and simple trading setups which repeated often enough to recognize easily.
After watching just the daily charts for several months, I began documenting the price action trading patterns and my observations. What started as an exercise of making daily market commentaries soon became my trading method and plan. Everything was now revolving around the higher time frames which made the chart clear and clean. Things in that initial trading plan included, basic trend identification, plotting key levels, and finding single and multiple bar price signals. Over time, I found that the largest players in the market where also using horizontal lines to trade from very often, in fact, it was when I also started to trade based off simple horizontal levels that my account started to soar.
Keeping it simple
Whilst there is no way a trader can trade just horizontal levels or just trade one price action signal and make money, the core foundation of my success lies in analyzing how markets react around key chart levels and trading specific price action signals that form near them. I can certainly deduce that all traders who make serious money think in a very simple manner, me included. The daily chart allowed me to live a healthy life, with less stress, thus increasing my trading performance as well. So the message is very clear: continue to keep it simple, and keep using the same method, don’t deviate to another method, just keep mastering it and believing in it. That’s how I did it.
Why Price Action?
Price action removed all the noise and mess of the charts. I now look at raw price charts with only 1 or 2 longer term moving averages to assist with trend definition. The entire method is based around simple, concise trading guidelines. I learned that markets rotate very often, and rarely move in one direction for very long, thus I have learned to work within the structure of those market dynamics. I let trades come to me as I wait in ambush for the perfect setup. Price action trading is not only your ability to read a chart, it’s also your ability to maintain a simplistic outlook on price and its expected direction. Patience is required, but in the end, anything worth doing requires patience, and trading is no different.
Where I am today
The journey for most traders is typically a long one filled with a lot of trial and error. However, there is a serious argument to what can and can’t work in terms of a trading style. You need to learn to “read price action”, not just learn a rigid trading system that doesn’t teach you anything about the market’s dynamics. The trick is to keep it simple by learning to read the raw price action of the market and not trading too frequently. Now that I am doing well in my trading endeavors, it is my duty to educate aspiring traders, to guide and assist them. I feel that if you just start to clean up your charts, remove the indicators, and look at the raw daily price action, you’re going to discover a trading perspective that you never knew existed. To learn more about how to develop this trading perspective and tading with simple yet highly effective price action trading strategies, checkout my price action trading course for more information.