If you’re struggling with price action analysis, you should know that you’re not alone and you shouldn’t get too concerned just yet. Most traders struggle with price action for a handful of pretty common reasons, and today’s article is going to discuss these reasons and help you overcome them.
Read on to learn some of the most common reasons why people struggle with price action analysis, following those reasons are some guidelines on how you can overcome them.
1. You have not fully committed to price action analysis
You have to let go of the fear and doubt / second guessing regarding price action. Part of you thinks trading should be technically difficult, so you feel you ‘need’ indicators and a very complicated and or expensive trading system. You need to let go of these fears and commit to a simple price action approach like I teach.
How to fix it: Commit to the price action approach.
Once you get the training, you need to give it time to work for you and you need to make sure you stick with the program / method. If you take my price action trading course you need to spend the proper time to learn it all and really let it sink in, then formulate a plan and trade a demo account for a little while before going live.
You need to stick to the method for AT LEAST six months to really give it a chance to work in your favor, any less than that and you won’t be giving it a fair shot. I have found that most people have a hard time doing this however, they tend to give up after a couple losing trades and start looking for other methods and approaches and just generally waffle and become undisciplined.
Understand that trading involves both winners and losers, and you will never make money if you aren’t at least disciplined enough to stick with a method for six months or more.
2. You don’t wait for obvious price action signals
I have found over my years of helping traders learn price action, that the single biggest reason they struggle with price action analysis is simply not waiting for obvious trade signals to form from key levels or in trends.
How to fix it: Wait for the signal.
Patience is key here, as well as a clear understanding of what a ‘good’ price action signal looks like, which relates back to the previous point above. You have to first learn a real price action method and then commit to it, in order to know what a good price action signal looks like in the market. If you don’t do that, you don’t really have a price action strategy; you are basically just guessing.
If you do obtain and learn a price action method, you then have to commit to it as I said above, and part of committing to it means actually FOLLOWING it by WAITING for the signals to appear. You have to leave your greed at the doorstep, because it will not help you make money, even though it may ‘feel’ like it will. The most helpful thing I can say to you is that ‘patience’ is the fastest way to making money in the market, as counter-intuitive as that may sound.
Patience means waiting for your edge / strategy to form a signal and then waiting patiently for the trade to play once you do find a signal.
3. You want to get rich quick
Whether we admit it or not, we all want to get rich quick, and trading seems like the perfect way to do that to most beginners. However, it doesn’t take much time in the market to figure out that you aren’t going to get rich quick trading the markets. It usually takes someone years of learning, trial and error and discipline to start making consistent money in the market.
How to fix it: Obtain and maintain the proper trading mindset
The longer you try to ‘make fast’ money in the market, the longer it is going to take you to actually do so, let me explain…
Price action trading success and really any form of trading success, comes from the proper trading mindset and maintaining that mindset over a long enough period of time for it to bring you increasing amounts of money. The proper trading mindset means that you don’t expect to win every trade and you wait patiently for obvious trading opportunities to form; you aren’t jumping at every little pattern that comes along. You need to approach your risk management with the understanding that any one trade can be a loser, if you truly accept that then you will never risk more than you care to lose on any one trade.
4. You don’t actually have a solidified price action method
The most common reason that traders struggle with price action is that they aren’t actually trading a specific price action method. Instead, many traders pick up bits and pieces of price action trading from various sources online and they ‘think’ they know how to trade with price action. But you have to ask yourself; have you actually learned a real, solidified method that is gelled together into an effective price action trading approach? If you haven’t, you’re probably not very focused and you just randomly look at the charts with no routine or process behind your price action analysis.
How to fix it: Learn an actual price action method.
Learning an actual price action method and sticking with it is the first step to fixing your struggles with price action trading. This means getting an education on price action analysis from someone who has put together their approach into a comprehensive learning program.
The point is, you need to find a price action approach and stick with it; don’t combine a bunch of different approaches or jump from one method to the next. If you’d like to learn how I trade with price action, you can get my price action trading course here.