One common mistake is over-reliance on short-term patterns.
Now, don’t get me wrong…
Short-term patterns are essential in price action trading.
However, it’s just as important to consider the bigger picture. Individual candlestick patterns can be quite misleading if you don’t understand the broader context of the market.
It’s about the story the market is telling, not just isolated snapshots.
Some traders also get stuck on chasing the perfect entry.
Price action trading isn’t about nailing the absolute top or bottom of a move. It’s more about understanding the current conditions and supply and demand zones and making high-probability trades in line with those zones and conditions.
So don’t stress if your entry isn’t pinpoint perfect.
The key is consistency, not perfection.
Another mistake – ignoring risk management.
Let me tell you: risk management isn’t optional. It’s fundamental. You can have the best price action strategy on the planet, but if you’re risking too much on each trade, it’s a one-way ticket to blowing up your account.
Always define your risk before entering a trade.
Another common trap is overcomplicating things.
Remember, the beauty of price action trading lies in its simplicity. It’s about raw price, stripped of all the bells and whistles.
Resist the urge to clutter your charts with too many indicators!
Trust in the price, it’s the most direct reflection of market sentiment.