Bare bones trading is the simplest way to trade in the Forex market. So what is bare bones in Forex trading? I believe all that's needed is a Daily chart with price action and no indicators. The question now is how do I identify a valid trade setup with entry and exit points? This is where Horizontal or Key levels come in, which is the“core” component of my trading strategy. In this article I will be discussing how to identify these levels and why it should be a fundamental part of any trading strategy.
Now that I have a trading plan as well as some form of money management in place, I will need a trading strategy. I will be focusing on the Price Action strategy. What is price action? The best way to describe it's the “footprint” of money. Financial markets are where money is exchanged between market participants, and this exchange of money leaves a trail, this trail is a market’s price movement or price action and it can be observed on a price chart.
Having a Forex trading plan is one of the most important pieces of the puzzle of becoming a consistently profitable Forex trader. One of the best ways to not let emotions influence my trading activities is to have a defined trading plan that describes in concrete terms what I will do in any given market scenario.
A key area that many traders fail upon is creating or keeping a trading journal. For some reason people blow this off but it's an aspect of trading that truly defines and separates the disciplined and organized traders from the rest who continually lose money and blow out their trading accounts.
The main function of money management is to help me manage my emotions. It seems that I need to take a logical approach in my decision making knowing that every trade setup taken there is a calculated risk.
Trading psychology is a huge aspect of successful trading and determines whether or not you will be able to make consistent profits as a trader.