I am often asked the question as to what makes a successful price action trader? To be honest, the answer is not really any different than the same thing it takes to make a successful market trader of any type. You see, I believe that any trader that is successful actually has a good understanding of prices and how to read a price chart, even if they don’t realize that they have this skill. If you can’t read a price chart properly, there is no way to make money as a trader on a consistent basis. It just is not possible.
A Trader may call themselves a scalper, swing trader, trend follower, fibonacci trader, turtle trader or any of the other popular trading techniques that can be found today, but in the end, if they are finding success on a regular basis, they have some understanding of price movements and they are able to read a price chart. This ability to read a chart and understand price movement is the basis of price action trading although some of these traders would never think or even dream that they were trading based on price action strategies.
Now that you understand that trading success is based on the same factors for any type of trader, which obviously includes price action traders as well, let’s now talk about what it takes to be successful. I have always stated in my writing and in my videos that the most important step in becoming a successful trader starts with practice and study time, which also can be interpreted as experience that is gained through actually trading every day and then studying your work at the end of the day.
Many trading teachers will tell you to keep a journal and to go back and study that journal on a regular basis. That idea is good, but what I believe is best is to start trading immediately on the simulator and to get as much time as you can in every trading day on that simulator. Don’t be too concerned with how well you do, although you should be attempting to follow your trading strategy or trading rules as closely as possible at all times. In addition, you must be certain to review your trading and your trading chart at the end of every day. Review your trades first and foremost and determine where you went wrong and why, and try and determine what you did right and why. Once that step is complete, go through the price movements from start to finish. Try and determine where the strongest or best moves originate from or where prices reverse trend and study those areas closely and try to understand what happened at that point on your chart.
By doing this every day, you will improve your eye for the patterns while also improving your memory as to how prices react and move on a daily basis. What you will find is that over time, you will slowly be able to simply glance at a chart and immediately spot the best trades while also understanding why prices did what they did at those locations. While it will take much longer to do this in real time, learning to spot it “after the fact” is a necessary first step. Just keep trading the simulator and studying your daily chart and daily trades, and eventually you will began to see things in real time, and the light will eventually turn on for you. How long the real time action takes to pick up will be different for everyone, but understand that it takes time and experience, and lot’s of it!
Below is an excerpt from an article that I found at www.2beanonlinetrader.com. While I have no idea what trading strategy this trader uses or how they describe themselves as a trader, I do like their thought process of what it takes to become a successful trader. Here’s what this traders had to say about trading success.
You might at this time be thinking to yourself that surely anyone could be a successful trader and in one way you would be right. You don’t have to come from a certain background or have some special qualification or ability but not everyone who starts trading last very long, in fact most trader fail and why is that? Click the link for a more in depth look at why most traders fail.
Well let’s start by looking at what I think is the most important, so therefore first lesson you will learn here, TRADING IS NOT A GET RICH QUICK SCHEME!!!
To become a successful trader who stands the test of time, takes a lot of time, patience, persistence and screen time working and studying the charts. A profitable trader will also dedicate a lot of time to reviewing and updating his or her trading journal. You see it does not matter what you have heard or read before there are no fool proof systems out there that can guarantee to make you money all of the time. I mean let’s face it, if there were, everyone would be trading and everyone would be very successful but the cold hard fact is that most people who try…LOOSE THEIR MONEY!
I see far too many people just dive into trading, with their own money, thinking everything will be fine and all will be given to them on a silver platter. Or sadly some have bought into some magical “system” believing it will all be done for them and they only have to put in very little time and effort. They hand over their hard earned money only to find that their accounts get burnt and emptied before they realize what hit them.
That is not what any of us want, but sadly, it’s what far too many of us get. You can read the rest of the original article here.
If you have followed my work for any period of time, you could probably mistake this guys writing for my very own, because he’s saying the same things I’m always saying. Trading is not a get rich quick opportunity, and it takes a lot time and experience, but most importantly, it takes patience. I wish I could say that this business is easy, but if it truly were, everyone would be a day trader and everyone would be making their fortune as a trader, and that simply is not the case. If you are interested in price action trading, and if you want to learn more about what makes a successful price action trader, you can find that information at http://priceactiontradingsystem.com/pats-price-action-trading-manual/.