Proactive VS Reactive Trading

Mar 17, 2023

Many traders want a simple, mechanical trading plan that is based on indicators and chart patterns. It's like you get something on the chart and you react by either trading it or not. However, we see that indicators are more often failing than working. Chart patterns are also more often failing than working. So what can you do about it?

You need to be proactive. First of all, you have to identify price areas where you're going to expect a chart pattern or indicator signal to happen. To be able to do that you need professional market knowledge which you can't get from youtube, babypips, books and most forex teachers.

When you identify your price area and expect a certain pattern or signal to happen, you're making a prediction (step 1). After you've predicted what's going to happen, you wait for it to happen (step 2). And then you know that if A happened, followed by B, then it's very likely that C will happen as well. So then you trade (step 3).

Sometimes I wait until evening for my morning's predictions to happen. Or until tomorrow. Or longer. Remember - patience is the name of the game and if you use proactive approach then you're less likely to fall into trader's psychological traps and also more likely to make more money.

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Disclaimer: The information on this site is just a very basic understanding of price action Forex trading and is for entertainment value only. How I trade is very different to what you may read here. The information on this site is not a recommendation to trade Forex as I do not know your level of trading experience or your financial situation. I am not a financial advisor, and I am not qualified to give financial advice. Trading Forex profitably is a skill that cannot be learned from reading the posts on this site, and I cannot be held responsible for any trades that you may take as a result of the information on this site. So if you are trading, you are trading at your own risk, so please trade responsibly, and do not trade with money you cannot afford to lose. For help and advice please contact me, or for more information about what I do check out my Forex Trading Course.