Most of traders during my interaction with them says the following ” Looking at most of indicators which were oversold we took long in market but the market keep on falling down and we need to bear huge loss” .
Once the position you are holding is down by 5-6%, traders will not be interested in booking loss as their emotions will overpower them stopping them from booking loss and giving assurance market will bounce back. Sometimes they get Lucky market do bounce back giving them space for exiting positions in minimum loss for those unlucky their trading account goes bust and they are forced to quit the market.
So how to tackle the emotional side of trader and reduce his dependance on indicators?
Price action trading strategies provide high probability entry signals and also keep the emotional side of trader under control.Most of traders know that to find success in trading they need to be disciplined . However, very few traders understand just how much the specific trading strategy they use can influence their mindset and emotions. Since not trading off of emotional impulses is a necessity for making consistent money in the market, it is of paramount importance to use a simple method like price action trading so that you do not unknowingly contribute to your own confusion and struggle in the trading.
• Having Control on your trading emotions is key to your long term success
If you want to have consistency in your trading profits and be at peace with yourself not worrying where Dow is closing or Fed is tapering the QE Infinity , you will really need to first understand why emotional management is so critical to trading success. The reason emotional management is so vitally important to trading success is because the market simply does not care about how you feel or what you think. This means that the more you trade based on emotion, the more money you will lose. It may take a year or even 5 years for you to blow out your account, and you may have many winning trades in between, if you do not learn to control your emotions while trading the market you will eventually drop into the 90% of losing traders.
• Complex Trading Strategies can easily induce emotional trading, leading to lost money and lost time.
I have seen many traders who put on fancy indicators Like MACD,RSI, ROC, Fibonacci numbers, Gann Fans etc etc when they analyses / trade the market. I am not disagreement that these indicators does not work, they do work but using so many indicators can confuse a trader,eventually making wrong trading decisions. These system no doubt looks nice and sophisticated but they are not tradeable set ups in long run.
If you are using a trading strategy that is too complicated or is just simply too confusing for you to understand, you are likely to end up entering trades out of desperation or frustration.
• Keep It Simple and Stupid (KISS)
The simplicity in price action trading will work to make a traders thinking as emotion-less market.You will not be concerned about Indicators in Oversold range or market approaching a support levels. This type of objective thinking pattern is the cornerstone of consistently profitable trading, and the fact that many traders lack this thinking pattern is the biggest reason why most traders fail in the end.
Price Action trading Strategy are developed on KISS concept, We just need to study the price without confusing our self with tons of fancy indicator.
To summarize , The real difficulty in achieving trading success lies in the fact that most people lack the ability to keep themselves accountable each day and maintain an objective mindset. So, if we can acknowledge that trading is not really as technically difficult as most people think it is, but that the real difficulty lies in maintaining control of your emotions, it only makes sense to use a simplistic, logical, and effective method like price action trading strategies.
Learn To Trade Price Action – If you want to get a comprehensive price action trading education on the exact same strategies that I use to trade the market with, check out my trading course . These Courses are conducted online on 1-1 basis.