You must understand the professional trader mindset if you want to gain more profit. Many think that people who are successful in trading are lucky. In fact, it takes more than just luck to be able to consistently profit from forex trading.
A successful professional trader must join the best forex broker and have a mature trading strategy. And in developing these trading strategies, they generally rely on two important factors for price analysis, namely price action and confidence.
The price movement that you see on a chart or chart is called price action. Try to pay attention to the graph on the time frame which is quite long.
You will be able to find patterns of price movement that tend to repeat themselves. This is because the price cannot go up forever or go down forever.
Understanding Price Action as a Part of Professional Trader Mindset
Because the pattern of price movements repeats itself, you can predict future price movements by looking at past price movements. Apart from that, all fundamental news which is released every day is always reflected in the price action.
Therefore, the more you hone your ability to analyze price action, the more you will be able to find out which moments are good to place orders and have the potential to profit.
Using professional trader mindset, you can also find out which moments the risk is less proportional to the potential profit or too high for your tolerance limit.
With the ability to find moments like this you can make wise and rational trading decisions, not just relying on luck or emotion, so you can manage your risk of loss better.
Understanding Confluence in Forex Trading
Confluence is the emergence of a condition coupled with the occurrence of other situations that support the strengthening of these conditions.
For example, you can see that the EURUSD (Euro/US dollar) price is increasing on the chart. Then came the release of Non-Farm Payroll (NFP) data which was lower than the previous month.
In addition, there was also strengthening in the currency pairs GBPUSD (pound sterling/US dollar), AUDUSD (Australian dollar/US dollar), and NZDUSD (New Zealand dollar/US dollar).
It can be seen that the three things above are interrelated. The declining value of NFP data shows that the United States economy is experiencing a decline from the previous month.
So, it makes sense for the price of the EURUSD, GBPUSD, AUDUSD, and NZDUSD currency pairs to strengthen on the chart. So in a situation like this, using professional trader mindset, you can reach a potential profit by opening a buy order on the currency pairs above.
Whereas in major currency pairs with USD as the base currency, such as USDCAD (US dollar / Canadian dollar), USDCHF (US dollar / Swiss franc), and USDJPY (US dollar/yen), the potential profit will be greater if you open a short position.
This is because the USD price is weakening, so the price movement of the currency pair above on the chart tends to be bearish.
The Combination of the Two Can Help You Find Opportunities
By combining the ability to analyze price action and confidence, you will be able to find better trading opportunities. Of course, this is very different from trading based on feeling or trading based on luck.
This mindset based on price action and confidence is what professional traders use in creating trading strategies, which aim to manage the risk of loss and maximize potential profit during forex and commodity trading.
If you still think that trading is just hockey capital and often suffer losses, start changing your mindset by expanding your knowledge of trading, price action, and confluence together with the Didimax forex broker, so that you can reach much better profit potential.
Remember, you can't solve problems in the same mindset that they arose. So, change your mindset from now on into professional trader mindset to get more profit on your trading activity.
