Should I Consider Trading Price Action

It entirely depends on your trading and investment goals. If your intention is a long-term investment, then these strategies aren’t relevant. Theses trading strategies might be right for you if you are interested in intraday trading, day trading, or swing trading. They are designed to take advantage of short to mid-term price movement and patterns. Whenever considering whether a product is right for you, it’s a good idea to seek independent professional advice.

What's The Best Price Action Strategy?

The question of “What’s the best price action strategy?” is one that often arises in the world of trading, and it’s essential to approach it with a balanced perspective. The truth is, there isn’t a one-size-fits-all answer to this question because the effectiveness of a trading price action depends on various factors, including a trader’s individual preferences, risk tolerance, and market conditions. It’s crucial to understand that there is no universally “best” price action strategy that applies to all traders and all situations. The effectiveness of a trading price action depends on the trader’s goals and the specific market they are trading.

How Risky is Price Action Trading?

Price action trading involves risk, just like all other forms of trading. Trading particularly volatile markets, or leveraged products adds to this risk. If you choose to trade a price action strategy you should closely control your risk. Regardless of the strategy you choose, effective risk management is paramount. Without proper risk management, even the best strategy can lead to substantial losses. This includes setting stop-loss orders, managing position sizes, and adjusting risk when needed. As always, practise on a simulated account to prove that your strategy and risk management techniques work.

Is Price Action Trading Used in Day Trading?

There are many day traders that trade purely on price movement. Trading patterns and candlestick patterns are both very popular way for day traders to find opportunities and manage risk. In saying that, some day traders may use other tools along with their price action strategy in order to perform their technical analysis. At the international Day Trading Academy, we combine price action trading with indicators and candlestick analysis. If you’re interested in learning day trading you should check out our beginner trading course to learn more about trading.

Are These Strategies Suitable for a Swing Trader?

Yes. Many swing traders trade similar price action strategies to those outlined in this article. Swing traders may look for reversals in order to capture a newly forming trend, then hold that position until the next reversal. A swing trader might also look to trade an existing trend if other factors like volume, levels of support and resistance, favour the trade. Trading Patterns also feature heavily in many swing trading strategies.

Do Forex Traders Trade Pure Price Movement?

Yes. There are many Forex traders trading this way. The Forex markets move in a similar way to Futures, Options, Stocks etc when it comes to technical analysis. Most Forex traders concentrate on pure price movement as their method of trading the markets. Day traders and swing traders in the forex market can take advantage of these techniques.

Day Trading on a Budget

Our Tips & Strategies for New Traders

Day trading is a super exciting endeavour when you’re just starting out, but it’s crucial that you have a solid plan when you’re getting started, especially if you’re day trading on a budget.

In this blog, we will explore the tips, tricks and strategies new day traders need to keep in mind when starting out on their day trading journey. From setting budgets to helping mitigate risks these are the tips you should keep in mind when you’re day trading on a budget.

Set Your Budget

Before you even start your day trading journey, you need to establish a realistic budget that will work for you. Take a look at your finances and establish how much you can realistically afford to invest without risking your financial stability.

Your budget needs to cover your trading capital, any additional expenses for trading platforms and tools and cover your potential losses. It’s better to be more conservative when you’re setting your budgets than getting yourself in a position where you risk overleveraging.

Employ Risk Management

When you’re thinking about starting your day trading journey, effective risk management has to be considered – especially if you’re on a strict budget.

Ensure you set a stop-loss order for each of your trades to help you limit your risk exposure. You should also consider only risking a small percentage of your trading capital on your trades – for example, between 1% to 2%.

Another great risk management strategy that you may want to think about implementing is to diversify your trades across a number of different assets to help spread your risk more evenly.

Cost of Platforms & Tools

When it comes to day trading, the cost of trading platforms and tools is a sometimes overlooked cost that can start to stack up over time. You’ll want to do your research when it comes to the platforms and tools you are looking into using.

At IDTA, we have a range of completely free resources if you’re on a tight budget including free day trading books, free day trading classes and completely free day trading workshops to get you started off on the right foot. You may want to consider starting with a more basic platform for your day trading and upgrading as you grow your trading capital.

Don’t Forget Trading Fees

When it comes to day traders that are trading frequently, trading fees may have a significant impact on your profitability. You’ll want to be mindful of any broker commission fees and it may be best to try to find brokers that offer competitive fee structures or even look into commission-free platforms or trading.

Research the various trading products, platforms, and brokers available to you before you choose where to do your trading.

It’s Time to Begin Day Trading on a Budget!

When it comes to day trading, keeping to your strict budget requires careful planning and knowledge about different strategies to help you get started. When you set a realistic budget, implement effective risk management strategies and minimise trading costs, you can help to increase your chances of day trading success without blowing through your limited capital.

Enrolling in our IDTA day trading courses and workshops is a great way to familiarise yourself with the day trading world so that you can get to planning and begin your day trading journey!