Forex Beginner: Price Action Question

Hello FF. This is my first post, though I've been reading the forums here for a little while now. I'm new to the Forex market, and don't fully understand all the aspecs of technical trading just yet... but I'm learning. I was initially intrigued by the Forex due to the fact that I love anything involving strategies, numbers and statistical analysis. Also, I'm a gambler and the thrill of it all is just what I'm looking for.

I'm generally a logical person, so I don't expect to make millions from trading currencies. I do hope to make money though, even if its only enough to pay my cable bill each month. For now, I'm only wishing for a bit of a supplemental income. I'd also like to keep things as simple as possible.

So far, I've funded a mini account with $250 twice. Both times I've lost it all, but I've considered it a learning experience. The first $250 I traded by feeling. I had no idea at the time what the market was all about, or even what the most basic terminology meant. The second $250 I lost while using an online signal service. Just my luck that their first losing month in almost two years happened to be when I jumped aboard. (I'm feeling a bit sceptical about their supposed track record now) I've learned two things from this first $500... 1. gut feelings are worthless... 2. don't trust any cheaply priced signal services you find by doing a simple google search. I know that probably sounds like common sense, but I'm very new and a bit niave.

My question to anyone reading this is: Can you profit in the Forex market simply by using price action and price history alone? As stated above, I want to keep my strategy as simple as possible. I've gone back and collected about 5 months of price data on the EUR/USD pairing and have begun looking for any discernable patterns. I may have found one. I'm not going live with it until I can get about 2 years worth of data and seeing if my strategy still holds up. 5 months is just way too short a time. Even so... Do any profitable traders use price history alone to setup their trades? Is it possible, or am I being too simplistic about it?

Any advice would be appreciated.

i think you lost your $500 not because you're clueless, even though you may think you are. But I think you might have risked waaay too much on a single trade. If you trade with someone like fxcm or forex.com, then an account of 250 will dissapear very quickly

i didn't know much when i started too. Just looked over few technical books, but one thing that always remained in my head since the beginning was not to risk more than 2% on a trade. I've had so many losses, but never to the point of breaking my acccount

so to answer your question, yes price action method is very effective trading strategy (i'm using one actually). I recommed reading steve nison's books, SRDC threads here, and James16 thread. However, even when you have a good system and you still risk like 10% of your small account, you'll gonna end up losing.

good luck

Thanks hilmy83. I am using forex.com, but I've been trading the smallest available lot size. Its 10,000. Is $250 just not enough for a mini-account, or should I be looking for a platform with less leverage and/or smaller lot sizes?

Thanks for the advice. I've read Steve Nison's name a few times now in the forum and I believe Boris Schlossberg mentioned him in his book, "Technical Analysis of the Curreny Market." I'll definately check him out.

Try oanda.com
Check out and get a feel for their platform first by opening a demo account.


Best of luck

If you want to know about Price Action then this is the guy to study. It's long but everything (well almost) you need to know is in here http://www.forexfactory.com/showthread.php?t=2331

yea, that's definitely too large of a contract to trade $250. Assuming that it's about $1/pip, you would need something like 5 pip s/l or less if you wnat to just risk 2% of 250.

yes, switch to broker that offers micro account like oanda or fxdd

Thanks hil... I'll take a look at oanda tonight.

Thanks Peter. A lot of information here. This should keep me busy for awhile.