How to Master Your Trading Strategy

In this week’s lesson, I am going to share with you a proven technique for becoming a “Master” of your Forex trading strategy. If you’re a regular reader of my blog then you know that I refer to “mastering” your trading strategy in many of my articles, and today’s lesson is going to get into the meat of exactly HOW to master your trading strategy and WHY it’s so important.

Staying focused on one trading method

long enough to really learn how to trade it effectively is something that many traders struggle with. Based on my personal experience from observing and helping thousands of traders, the traders who focus on learning one entry trigger or one setup at a time are typically the ones who succeed at trading. Since I am a price action trader and I teach price action trading, I teach my members to focus their attention on learning ONE price action setup at a time, until they feel they’ve “mastered” it, and then they can move on and add more setups to their arsenal. Mastering one setup at a time helps create focus and clarity in a trader’s mind by removing clutter and minimizing decisions.

Why you need to become a “Master” of your trading strategy

I know that this might seem obvious, but you really need to “Master” your trading strategy before you try trading it on a live account. Why am I saying this if it seems so obvious you ask? It’s simple, from my interactions with traders every day, I know for a fact that far too many of them are diving into live-account trading without any real clue as to what their trading strategy is or how to trade it. Many traders “think” or “feel” like they know what their trading strategy is and how to trade it, but the truth is that most beginning and struggling traders have not truly “mastered” their trading strategy yet.

Ask yourself these two questions: Do I know my trading strategy inside and out? Am I at the point where I can flick through the charts in 5 or 10 minutes and instantly know if there’s a setup worth trading or not? If you can’t answer an honest “yes” to both of these questions then you aren’t ready to trade live and you have not mastered your trading strategy yet.

I talk about trading like a sniper in many of my articles. Whether it’s what crocodiles can teach you about trading or how to trade from a coffee shop in a minimalistic manner; the underlying point is basically the same; trading in a relaxed and scaled-back manner is best. But, HOW do you arrive at that point of trading in a relaxed and confident manner? You have to first become a master of your trading strategy, and then you will have the ability to quickly scan the markets and make a confident decision to trade or not to trade. If you aren’t doing that, then you are probably sitting there for hours mulling over your charts until you eventually convince yourself of a trade signal that later you realized was not really worth trading at all. If this sounds familiar then read on, I’m going to tell you how to fix it…

Creating FOCUS

Most traders struggle with focus, and it’s not surprising really. How can you easily focus when there are so many different trading methods, economic news events and other market variables bombarding you every day?

With all the different trading systems and strategies out there, how can you really know if what you’re doing is “right” or if it will work if you can’t focus on it enough? Well, the answer to that question is that you can’t. You can’t know if any strategy or system will work until you try it, and the key is that you have to try it over a large enough series of trades to see it play out.

MOST traders struggle with sticking to one trading method long enough to see it play out. Why? It’s because they try to tackle too much at one time; they try to trade with 10 different forex indicators or they try to trade 30 different markets at once with 5 different entry triggers. The truth is, the entry trigger is the easiest part of trading, and it’s also the part that traders over-complicate the most.

How do you create the focus that you need to really MASTER your trading strategy? It’s actually pretty simple; you break your trading strategy down into smaller pieces; you un-complicate it. This is actually the “key” to mastering anything in life, whether it’s reading a book, studying for a test or getting through your work day; if you break things down into smaller pieces, you will be able to focus more on each piece, rather than trying to do too much at one time. This, in turn, will help you achieve the larger end-goal faster and more effectively than if you try to do too much at once with no plan of action.

How to MASTER one price action setup at a time

Let’s get into the “meat” of the process of mastering one price action setup at a time. Before we begin, it is worth noting that when I say “one setup” I don’t mean “only” a pin bar or only some other price action bar…a price action strategy or “setup” consists not only of the bar but of the surrounding market conditions and events as well.

For example, in the charts below, we are going to look at mastering the daily chart pin bar setup from key chart levels of horizontal support and resistance. Thus, you don’t trade unless there’s an obvious daily chart pin bar setup formed at or rejecting a key level of horizontal support or resistance. Let’s look at some examples now:

In the example chart below, we can see 4 different examples of trades that would fit our criteria of trading only daily chart pin bars from key levels of support or resistance. These would be the ONLY types of setups you would be looking for until you feel you mastered them:

In the example chart below, we can see a good example of a pin bar on the daily chart of the USDJPY that formed rejecting a key horizontal support level through 79.20. It’s worth noting that this pin bar actually kicked off the huge up trend in the USDJPY that is still underway:

In the example chart below, we are looking at more examples of daily chart pin bars that formed at or near key levels of horizontal support or resistance:

One important thing to take note of with trading a strategy that involves finding key levels like this; you have to wait until a key level actually forms…don’t guess. I wrote an article about how to draw support and resistance that will help you to distinguish key levels from less significant / minor market levels. This is why in the USDCHF example (the last one above); I didn’t mark that first pin bar from support that formed on January 2nd as an example of our trade setup that we are mastering. At the time that pin formed that level was not really established yet, so it wasn’t a “key level” and thus it didn’t meet the criteria of the “one setup” that we are focusing on.

To make this exercise of mastering one setup at a time work, you really have to obey the rules that you’ve outlined for the particular setup you are trying to master. In this case, our main “rules” would be this:

1) Identify the obvious / key chart levels on the daily chart

2) Look for obvious pin bar reversal setups that have formed at or near those levels. Meaning, pin bars that are showing rejection of the level and (or) are creating a false-break of them.

Now, keep in mind that even with such a simple set of rules, with price action there is always discretion involved….you have to decide if a pin bar is “obvious” and if a level is “key”…but these things are easy to get better at through training, time and practice. I’ve already linked you guys to some good articles on these topics within this lesson, so you should understand what I’m talking about here.

In closing…

Professional traders do not sit in front of their charts wondering what to do. They know what to do already; they are just waiting for the right combinations of events to come together to give them a reason to trade. Knowing what these are events are, exactly what they look like and how to trade them is something you can easily accomplish by following the template laid out in today’s lesson. You first decide on what your entry trigger is, in our case it was the daily chart pin bar, and then you decide how to trade it. There are many different combinations of price action setups and factors of confluence that you can learn to master. Eventually, all of these setups that you’ve mastered will begin to “paint a picture” of the market for you and you will begin to have clarity and confidence whenever you look at a market’s price action.

If you don’t think and act like a pro trader then you will never become one, so start becoming a “master” price action trader by learning one particular setup at a time. Get it down on demo first, then try trading it live, and if you find after a couple months that you are making consistent money with it, then you can consider adding another setup. Your aim should be to have a handful of setups that you have an “intimate” knowledge of; that you are a “master” of. At that point, trading simply becomes a game of waiting patiently for the price action setups that you have mastered to show themselves in the market. It really can be as simple as that.