let me share my recent "eureka" story.
i've read and watched countless of forex tutoring videos and they all helped me a bit but i'm gonna save you the time and money by letting u use a simple method that i'm using.
A Safer way to forex trading
1. FOLLOW THE TREND! (if there is one)
2. Never take counter trend trades with as large a risk as a normal trade.
If i do take a counter trend trade, i usually use half my position size
3. Use a fixed risk rule, for me i risk 2% of my capital on every trade. SL size doesn't matter. It could be 20 pips or 150 pips. It will always work out to be 2% no matter what.
take for example, i have 10Grand and i see a nice fibonacci bounce trade but for it to be safe i would need a SL of 150 pips, what do i do to risk only 2%?
2% 0f 10,000 = $200.
so let 150*10*x=$200;
X=150*10 = (1500), then $200/1500= 0.13 lots.
If it was an 80 Pip required SL it would be
80*10*x=200;
x= 800/200
x=0.25 lots
so you see, the MM here is easy. You always risk 2% no matter what.
4. if you understand the above, then you are ready to trade . When i wake in the mornings, i open up my daily charts. i sweep over 10 or so pairs to see if any setups are available. If none are there, then i close my chart and check at end of day. DO NOT FORCE A TRADE, THAT IS OUTRIGHT GAMBLING!!
IF i spot a trade, i quantifiy the potential loss first. If the Loss in pips is too great for the trend, then i dont trade it.
5. Identifying trend the following opertunity.
The main entry i use for trend following is fibonacci bounce and to an extent, trend line bounce. i love Trend line trading opertunities as it often provides a high Risk to Reward ratio.
to see a fibo-trade, look on the chart below.
http://i12.tinypic.com/4pmahip.gif
If u look, you will realized the market was very obedient to the 38% fib number (62% for some depends on how u draw the fib).
I entered after seeing this on what would be a morning star formation. I placed my stop loss below a recent low for safety.
when riding this small trend movement, i canceled and replaced my Stop be placing it below the low of the previous candle. I did that until i was stopped out.
That trade won 312 pips, risking 102. if i had 10,000 that risk would be $200 @ 0.2 lots.
0.2 lots is $2 a pip, so 312 pips would have yielded $624 over a one week period.
Now i dont see why you would need a faster growth than that, if so, then use 4% risk and turn that 624 into $1248 which is more than 10% gain for the month already! imagine compounding that!
I hope this helps you my friend.
If u have time, look up price action on james 16 thread and also candlestick reversal formations.
In my opinion, if i had known all of this 1 year ago i would be a richer guy today
i've read and watched countless of forex tutoring videos and they all helped me a bit but i'm gonna save you the time and money by letting u use a simple method that i'm using.
A Safer way to forex trading
1. FOLLOW THE TREND! (if there is one)
2. Never take counter trend trades with as large a risk as a normal trade.
If i do take a counter trend trade, i usually use half my position size
3. Use a fixed risk rule, for me i risk 2% of my capital on every trade. SL size doesn't matter. It could be 20 pips or 150 pips. It will always work out to be 2% no matter what.
take for example, i have 10Grand and i see a nice fibonacci bounce trade but for it to be safe i would need a SL of 150 pips, what do i do to risk only 2%?
2% 0f 10,000 = $200.
so let 150*10*x=$200;
X=150*10 = (1500), then $200/1500= 0.13 lots.
If it was an 80 Pip required SL it would be
80*10*x=200;
x= 800/200
x=0.25 lots
so you see, the MM here is easy. You always risk 2% no matter what.
4. if you understand the above, then you are ready to trade . When i wake in the mornings, i open up my daily charts. i sweep over 10 or so pairs to see if any setups are available. If none are there, then i close my chart and check at end of day. DO NOT FORCE A TRADE, THAT IS OUTRIGHT GAMBLING!!
IF i spot a trade, i quantifiy the potential loss first. If the Loss in pips is too great for the trend, then i dont trade it.
5. Identifying trend the following opertunity.
The main entry i use for trend following is fibonacci bounce and to an extent, trend line bounce. i love Trend line trading opertunities as it often provides a high Risk to Reward ratio.
to see a fibo-trade, look on the chart below.
http://i12.tinypic.com/4pmahip.gif
If u look, you will realized the market was very obedient to the 38% fib number (62% for some depends on how u draw the fib).
I entered after seeing this on what would be a morning star formation. I placed my stop loss below a recent low for safety.
when riding this small trend movement, i canceled and replaced my Stop be placing it below the low of the previous candle. I did that until i was stopped out.
That trade won 312 pips, risking 102. if i had 10,000 that risk would be $200 @ 0.2 lots.
0.2 lots is $2 a pip, so 312 pips would have yielded $624 over a one week period.
Now i dont see why you would need a faster growth than that, if so, then use 4% risk and turn that 624 into $1248 which is more than 10% gain for the month already! imagine compounding that!
I hope this helps you my friend.
If u have time, look up price action on james 16 thread and also candlestick reversal formations.
In my opinion, if i had known all of this 1 year ago i would be a richer guy today
100% of traders are losers. Just that some win more than they lose!