james.kensington
Forum Newbie
Core reason why Price Action Traders FAIL when they "GO Live"
I have been trading FX Price Action strategy for around 4 years. I have been fortunate enough through guidance, mentoring and ongoing education, to be very
successful. I have also transitioned from a Part Time to a Full Time Trader as a lifestyle choice.
One of the main reasons for my success is Price Action Pilot Testing (PAPT).
P A P T
Step 1: Study Price Action Theory
Step 2: Study Price Action Setup
Step 3: Study Money Management
Step 4: Study Trading Psychology
Step 5: Create “Quick Reference Rules and Diagrams” (i.e. cross-referencing
when you trade)
Step 6: Test each Price Action (Pattern) & Setup on a Demo Account
Step 7: For every “Test Trade” create a Journal Entry and take notes (for
Statistical Analysis Later)
Step 8: Track your Progress (you are looking for an increase in your Wins Vs
Loss Ratio which should progressively improve over time and practice)
Step 9: Consult with Mentors, Get Guidance and Reviews
Step 10: Repeat Process
Note that I test this on the Daily Time Frame first, after which I must then achieve a 70/30 Win to Loss Ratio. I would never “Go Live” until I can achieve
this result consistently for 3 months minimum.
Example of Price Action Patterns & Setups you may test are Pin Bars, Engulfing Bars, Morning Stars, Dark Clouds etc.
If I “GO Live” trading and a PA Pattern/Setup starts falling I “STOP”. I talk to mentors. I get advice and guidance. I show people my journal entries and
get a critique. I also would never trade down a Time Frame i.e. from Daily to H4 unless, I had proven results on higher time frames.
In fact prior to going Live 4 years ago, I actually traded the market on a Demo Account for nearly a year. I made all the mistakes on paper rather than making them going live. I often hear people say that trading live compared to trading demo is different and that you need to GO LIVE straight away.
This, in my opinion, is a misconception that was put out by brokers to take money from you.
I see no reason why those learning how to trade need to “GO Live” until they have proven success long term on a Demo Account. So, if you are struggling in FX keep your hard earned cash in your bank. Practise and perfect on a Demo Account and get your W/L Ratio up to an acceptable level.
Even today, I keep a Demo Account and Test PA Patterns & Setups. I also keep a “Live Trading Journal” which enabled me to realise that I was over trading.
I am now taking less trades whilst increasing my W/L which therefore enables me to look for more higher quality PA Patterns & Setups. FX Trading is an ongoing education - you never stop learning.
I strongly recommend that if you keep losing money in FX, just STOP and consider the above. Don’t get trapped in to the mindset of “I want to make money NOW NOW
NOW or I will miss a trade!” It is about being consistent, profitable and increasing W/L Ratio over time.
As always, happy pipping my friends.
I hope this helps.
Please note I personally use http://www.forextester.com/ (Forex Tester myself). I like to test my strategies backwards and forwards, usually on the weekends.
You can also achieve the same forward testing with MT4 by using a Demo Account with a broker for free.
I have been trading FX Price Action strategy for around 4 years. I have been fortunate enough through guidance, mentoring and ongoing education, to be very
successful. I have also transitioned from a Part Time to a Full Time Trader as a lifestyle choice.
One of the main reasons for my success is Price Action Pilot Testing (PAPT).
P A P T
Step 1: Study Price Action Theory
Step 2: Study Price Action Setup
Step 3: Study Money Management
Step 4: Study Trading Psychology
Step 5: Create “Quick Reference Rules and Diagrams” (i.e. cross-referencing
when you trade)
Step 6: Test each Price Action (Pattern) & Setup on a Demo Account
Step 7: For every “Test Trade” create a Journal Entry and take notes (for
Statistical Analysis Later)
Step 8: Track your Progress (you are looking for an increase in your Wins Vs
Loss Ratio which should progressively improve over time and practice)
Step 9: Consult with Mentors, Get Guidance and Reviews
Step 10: Repeat Process
Note that I test this on the Daily Time Frame first, after which I must then achieve a 70/30 Win to Loss Ratio. I would never “Go Live” until I can achieve
this result consistently for 3 months minimum.
Example of Price Action Patterns & Setups you may test are Pin Bars, Engulfing Bars, Morning Stars, Dark Clouds etc.
If I “GO Live” trading and a PA Pattern/Setup starts falling I “STOP”. I talk to mentors. I get advice and guidance. I show people my journal entries and
get a critique. I also would never trade down a Time Frame i.e. from Daily to H4 unless, I had proven results on higher time frames.
In fact prior to going Live 4 years ago, I actually traded the market on a Demo Account for nearly a year. I made all the mistakes on paper rather than making them going live. I often hear people say that trading live compared to trading demo is different and that you need to GO LIVE straight away.
This, in my opinion, is a misconception that was put out by brokers to take money from you.
I see no reason why those learning how to trade need to “GO Live” until they have proven success long term on a Demo Account. So, if you are struggling in FX keep your hard earned cash in your bank. Practise and perfect on a Demo Account and get your W/L Ratio up to an acceptable level.
Even today, I keep a Demo Account and Test PA Patterns & Setups. I also keep a “Live Trading Journal” which enabled me to realise that I was over trading.
I am now taking less trades whilst increasing my W/L which therefore enables me to look for more higher quality PA Patterns & Setups. FX Trading is an ongoing education - you never stop learning.
I strongly recommend that if you keep losing money in FX, just STOP and consider the above. Don’t get trapped in to the mindset of “I want to make money NOW NOW
NOW or I will miss a trade!” It is about being consistent, profitable and increasing W/L Ratio over time.
As always, happy pipping my friends.
I hope this helps.
Please note I personally use http://www.forextester.com/ (Forex Tester myself). I like to test my strategies backwards and forwards, usually on the weekends.
You can also achieve the same forward testing with MT4 by using a Demo Account with a broker for free.
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