Tweet
Learn to trade NOT trade to learn
Nick, I hope I am not overstepping here by posting my ideas and styles. I love to help and give back and I have a great knowledge in business and starting with nothing and making something. Think on this quote-- "Rome wasn't built in a day" Now relate that to forex then you should think on that quote for your growth of your account and don't expect instant money.
---
Long post here but I hope some valuable information from TucsonTDR.
Learn to trade NOT trade to learn
-
That is what demo accounts are for if you are not sure how forex works. As many of us know in forex all that needs to happen is the smallest rumor or event and a substantial price action could occur and for the ones with high leverage are the first to lose. I have been a part of this room for only 2 weeks now and I have seen it with too many players that are great people but just risk too much. When you risk low % your mind is not playing against you that much so you can usually get out of a bad scenario relatively unharmed. I am saddened when I hear a person loses 10%+ on a single trade in a single day. Unfortunately with this part of the year and low volumes people have lost 50% in just this room over the past week. If this is pure gambling money then that is fine but if you are playing with money that you need a return on then this is just plan sad.
Here are some of my styles:
-
Buy at lows and place SL under previous lows – best way to catch a bottom with limited risk. Put in a buy at ½ % ( yes that is a half percent) as a first buy. If it goes against you but you still feel the trend or trade is what you originally planned then add that second position at lower costs to give you that 1% trade. If you are correct in the trade and it goes as planned then you should be in profit on both of those trades soon. When that happens you should place your SL at or close to break even. At that point you are playing with house money and adding additional positions is with very limited risk as now you get back to trading with your money until it moves more in your direction. Rinse and repeat with the SL so you are using house money and not yours if it turns against you then the losses will be zero or very limited. If you don’t want the added risk of adding to your original position then keep a trailing SL so you will always make a profit or keep the SL at BE so you can handle the larger swings until you are ready to close the position.
-
They key to trading small is you wont have that greed come in to make you TP too early. Then come back and see it went another 50 pips in your favor but you sold due to having too much leverage and worried.
When shorting place Sl above previous highs and hope for a reversal.
-
To trade you should not use more than 1% per trade max = 100 pip SL on average- if you have a $10,000 account then you should be trading no more than 1$ per pip, if you trade at $3 per pip then at 30 pips you are at 1%.... so that dpends on your style and risk. At $1 per pip if the trade goes against you 300 pips then you are only 3% in DD for this trade. That is not the end of the world and if you are a good trader you should be able to trade out of this unless the trend is completely reversed and you should just exit once that is determined. Use simple math based on your account size and trade accordingly. Even if its .10 per pip trades then so be it. People need to think in % and not $. Gaining 5% per month is amazing and the top traders of the world don’t usually achieve this. So why is your goal so much higher.
-
When you are in heavy DD then you need to slow trading down or stop completely until it reverses. Don’t risk a margin call due to over trading with large DD. While in heavy DD just trade demo to learn more while you wait.
Another idea if you can afford it is to start off by adding 1 to 5% a month into your account as a “drip” to keep increasing funds so your DD wont get out of control or you grow it that much faster. That way you can not worry about trades going temporarily against you and you can keep trading the same original %.
For my style of trading, I find that when I am in a losing trade I trade so much better on that pair as I get to know it much more than originally planned as now I want to either get out or find out why it went against me. When you are in a losing trade you learn the trading patterns much more intensely on a day to day basis and learning that really helps you profit or get out with limited risk or loss. having too much leverage will make you exit much faster.
-
Positive swap trades, long term up trend, get SL to BE and use positive swap as an incentive not to sell. If the position is in an uptrend and you don’t need that money then let it ride.
-
Position trading – buying lows( or selling highs), buying more if it drops every 2 to 300 pips against you. So your positions needs to be small, .5% per buy and hold long term for those 500 to 1000 pip gains. Again its best to position trade on swap positive pairs. Sort of like buying stock, if you don’t need the money why not make 1% to 10% ++ while you trade other pairs. Exotic pairs are great for this as some are very high yielding. I like swap pairs where I can invest $1000 and buy 1 mini lot and get ½ pip a day for free or more in swap. It would have to go 1000 pips against me before I get a margin call ( if that was my only trade in the account or money) if it doesn’t go down that far and eventually gets back into profit I will be earning swap the entire time. Again this is for traders that can set aside money for this style while still trading in another account.
-
If you are trading forex to double your money every month then you are just being ignorant to how money is made in this world. Trade reasonably and earn growth as one normally should.
Not trade when you have large DD, wait for those trades to come back. It might take a week, it might take a few months add funds if you can while you have large DD.
-
Not understanding the pip to $ ratio can be devastating, especially when trading exotic pairs.
-
Scalping doesn’t usually work for me but I love to jump in knowing I can easily make 10 pips but the fun part is once you get 10 pips ahead, then set your SL to BE and let it ride. What’s the harm. Now you are using their money and not yours. Increase positions as it moves up if you wish and keep moving that SL up. Now you are playing with more money but again its not yours anymore, its all free with zero risk.
On the above watch out for news as SL sometimes are not taken when very volatile.
-
What I see in this trading room and have seen this in the years I have been trading is the risk reward ratio is a$$ backwards. If your style is to scalp for 1 to 5 pips then you need to set your Sl to about the same. Why on earth are people taking 100 pip drawdowns to only scalp 5 pips.
Reverse trend trading, now this is not for the unskilled but can equate to easy scalping if done properly but not one I would hold for any length of time, like 1 hour or 1 day max. If you are successful in a reverse trend trade then you could take that trade again on the flip and use those profits you just made as your SL on the second trade and ride it up to the next level if possible.
-
Trade pairs you know about or have traded frequently. When you know the pair and countries economics and policies and potential news you can trade so much more profitable. Taking in DD can sometimes be to your advantage if you start with a small trade first.
I have been trading for over 15 years but most of those years have been in equities and stock options. I have been buying currency for about 10 years but always through my full service broker so I was always a position trader for long term buying swap positive pairs and just holding them for a long time or until the rates were not in favor any longer and I could exit with decent profit.
I started trading forex online about 4 years ago and when I first started I blown two accounts due to having bad money management skills and over leveraging. My main business took off so I stepped back from online trading and about a year ago I opened an account online to do it again.
I am using a great ECN broker with some of the lowest spreads and rates but I will soon open up a meta trader type account with them so I can sign up with some signal services here as there are some great traders in this room and I am learning many of their styles before I just jump in to pick one or 2. also this myfxbook is really nice and I will get set up with that too so I can show my figures in real time like many of you do already. Unfortunately with my current platform I can’t link it to myfxbook.
-
I have no special talents and I am a lousy chart reader so I am not great at calling signals except on the pairs I know but I have the trading skills and knowhow to not get in a massive drawdown position or I know how to handle it. for me if I was 1000 pips down on a position it would mean I am only down 10% but that is a huge amount if its only 1 trade. I have never been down that much except on my carry trades but for me I am not one to stress on being down several hundred pips for a month or two unless I am losing on swap, then it bothers me. Unfortunately for me having a US broker I cant hedge with the same account.
I hope people respond and correct any ideas I have or make suggestions. I have so much to learn but as many here I love the vibe of the forex over equities any day.
“Lets be careful out there”
TucsonTDR
---
Long post here but I hope some valuable information from TucsonTDR.
Learn to trade NOT trade to learn
-
That is what demo accounts are for if you are not sure how forex works. As many of us know in forex all that needs to happen is the smallest rumor or event and a substantial price action could occur and for the ones with high leverage are the first to lose. I have been a part of this room for only 2 weeks now and I have seen it with too many players that are great people but just risk too much. When you risk low % your mind is not playing against you that much so you can usually get out of a bad scenario relatively unharmed. I am saddened when I hear a person loses 10%+ on a single trade in a single day. Unfortunately with this part of the year and low volumes people have lost 50% in just this room over the past week. If this is pure gambling money then that is fine but if you are playing with money that you need a return on then this is just plan sad.
Here are some of my styles:
-
Buy at lows and place SL under previous lows – best way to catch a bottom with limited risk. Put in a buy at ½ % ( yes that is a half percent) as a first buy. If it goes against you but you still feel the trend or trade is what you originally planned then add that second position at lower costs to give you that 1% trade. If you are correct in the trade and it goes as planned then you should be in profit on both of those trades soon. When that happens you should place your SL at or close to break even. At that point you are playing with house money and adding additional positions is with very limited risk as now you get back to trading with your money until it moves more in your direction. Rinse and repeat with the SL so you are using house money and not yours if it turns against you then the losses will be zero or very limited. If you don’t want the added risk of adding to your original position then keep a trailing SL so you will always make a profit or keep the SL at BE so you can handle the larger swings until you are ready to close the position.
-
They key to trading small is you wont have that greed come in to make you TP too early. Then come back and see it went another 50 pips in your favor but you sold due to having too much leverage and worried.
When shorting place Sl above previous highs and hope for a reversal.
-
To trade you should not use more than 1% per trade max = 100 pip SL on average- if you have a $10,000 account then you should be trading no more than 1$ per pip, if you trade at $3 per pip then at 30 pips you are at 1%.... so that dpends on your style and risk. At $1 per pip if the trade goes against you 300 pips then you are only 3% in DD for this trade. That is not the end of the world and if you are a good trader you should be able to trade out of this unless the trend is completely reversed and you should just exit once that is determined. Use simple math based on your account size and trade accordingly. Even if its .10 per pip trades then so be it. People need to think in % and not $. Gaining 5% per month is amazing and the top traders of the world don’t usually achieve this. So why is your goal so much higher.
-
When you are in heavy DD then you need to slow trading down or stop completely until it reverses. Don’t risk a margin call due to over trading with large DD. While in heavy DD just trade demo to learn more while you wait.
Another idea if you can afford it is to start off by adding 1 to 5% a month into your account as a “drip” to keep increasing funds so your DD wont get out of control or you grow it that much faster. That way you can not worry about trades going temporarily against you and you can keep trading the same original %.
For my style of trading, I find that when I am in a losing trade I trade so much better on that pair as I get to know it much more than originally planned as now I want to either get out or find out why it went against me. When you are in a losing trade you learn the trading patterns much more intensely on a day to day basis and learning that really helps you profit or get out with limited risk or loss. having too much leverage will make you exit much faster.
-
Positive swap trades, long term up trend, get SL to BE and use positive swap as an incentive not to sell. If the position is in an uptrend and you don’t need that money then let it ride.
-
Position trading – buying lows( or selling highs), buying more if it drops every 2 to 300 pips against you. So your positions needs to be small, .5% per buy and hold long term for those 500 to 1000 pip gains. Again its best to position trade on swap positive pairs. Sort of like buying stock, if you don’t need the money why not make 1% to 10% ++ while you trade other pairs. Exotic pairs are great for this as some are very high yielding. I like swap pairs where I can invest $1000 and buy 1 mini lot and get ½ pip a day for free or more in swap. It would have to go 1000 pips against me before I get a margin call ( if that was my only trade in the account or money) if it doesn’t go down that far and eventually gets back into profit I will be earning swap the entire time. Again this is for traders that can set aside money for this style while still trading in another account.
-
If you are trading forex to double your money every month then you are just being ignorant to how money is made in this world. Trade reasonably and earn growth as one normally should.
Not trade when you have large DD, wait for those trades to come back. It might take a week, it might take a few months add funds if you can while you have large DD.
-
Not understanding the pip to $ ratio can be devastating, especially when trading exotic pairs.
-
Scalping doesn’t usually work for me but I love to jump in knowing I can easily make 10 pips but the fun part is once you get 10 pips ahead, then set your SL to BE and let it ride. What’s the harm. Now you are using their money and not yours. Increase positions as it moves up if you wish and keep moving that SL up. Now you are playing with more money but again its not yours anymore, its all free with zero risk.
On the above watch out for news as SL sometimes are not taken when very volatile.
-
What I see in this trading room and have seen this in the years I have been trading is the risk reward ratio is a$$ backwards. If your style is to scalp for 1 to 5 pips then you need to set your Sl to about the same. Why on earth are people taking 100 pip drawdowns to only scalp 5 pips.
Reverse trend trading, now this is not for the unskilled but can equate to easy scalping if done properly but not one I would hold for any length of time, like 1 hour or 1 day max. If you are successful in a reverse trend trade then you could take that trade again on the flip and use those profits you just made as your SL on the second trade and ride it up to the next level if possible.
-
Trade pairs you know about or have traded frequently. When you know the pair and countries economics and policies and potential news you can trade so much more profitable. Taking in DD can sometimes be to your advantage if you start with a small trade first.
I have been trading for over 15 years but most of those years have been in equities and stock options. I have been buying currency for about 10 years but always through my full service broker so I was always a position trader for long term buying swap positive pairs and just holding them for a long time or until the rates were not in favor any longer and I could exit with decent profit.
I started trading forex online about 4 years ago and when I first started I blown two accounts due to having bad money management skills and over leveraging. My main business took off so I stepped back from online trading and about a year ago I opened an account online to do it again.
I am using a great ECN broker with some of the lowest spreads and rates but I will soon open up a meta trader type account with them so I can sign up with some signal services here as there are some great traders in this room and I am learning many of their styles before I just jump in to pick one or 2. also this myfxbook is really nice and I will get set up with that too so I can show my figures in real time like many of you do already. Unfortunately with my current platform I can’t link it to myfxbook.
-
I have no special talents and I am a lousy chart reader so I am not great at calling signals except on the pairs I know but I have the trading skills and knowhow to not get in a massive drawdown position or I know how to handle it. for me if I was 1000 pips down on a position it would mean I am only down 10% but that is a huge amount if its only 1 trade. I have never been down that much except on my carry trades but for me I am not one to stress on being down several hundred pips for a month or two unless I am losing on swap, then it bothers me. Unfortunately for me having a US broker I cant hedge with the same account.
I hope people respond and correct any ideas I have or make suggestions. I have so much to learn but as many here I love the vibe of the forex over equities any day.
“Lets be careful out there”
TucsonTDR
Comment