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10 Rules for Traders

  • #61
  • Aug 10, 2017 5:43am Aug 10, 2017 5:43am
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  • #62
  • Aug 10, 2017 7:57am Aug 10, 2017 7:57am
Quoting redoktober
{image}
And this is the key to trading successfully!
  • #63
  • Aug 10, 2017 4:49pm Aug 10, 2017 4:49pm
Quoting redoktober
{image}
Haa haaa. The best rule I have even seen in my trading career. Thank you
  • #64
  • Aug 11, 2017 12:46am Aug 11, 2017 12:46am
6. Never use someone elses trading system. Design you own to fit your trading style

I'm a rookie - So how should I "Design" my trading system? specially when you suggest not to listen to anybody..

I agree with - never lose money lol =)
  • #65
  • Aug 11, 2017 8:10am Aug 11, 2017 8:10am
Quoting SjefLeaven
6. Never use someone elses trading system. Design you own to fit your trading style I'm a rookie - So how should I "Design" my trading system? specially when you suggest not to listen to anybody.. I agree with - never lose money lol =)
Rule 6 is actually good advice.

The OP is saying don't copy someone else's system because you don't think the same way as the system's creator, you won't understand it as well as they do, you won't know its limitations as well nor will you have the same faith in the trading system during losing streaks as the system creator does.

I think what you're referencing is Rule 7. Never log onto trading forums to get "advice" from other traders. No one has the Holy Grail.

It's good advice but should come with a footnote. Any advice you get from a trading forum should be taken with a grain of salt. Any advice you get, seriously think about it first and see if it makes sense. If it makes sense to you then test it out on a demo account, every time you have an idea or add something demo it, demo it, demo it.

As far as your question on how to design your own trading system. Go to babypips.com and go through their school and learn everything there. That is your starting point.

There is nothing new in trading, ignore the gimmicks and the short cuts and put in the work.
  • #66
  • Aug 12, 2017 2:39am Aug 12, 2017 2:39am
Quoting SjefLeaven
6. Never use someone elses trading system. Design you own to fit your trading style I'm a rookie - So how should I "Design" my trading system? specially when you suggest not to listen to anybody.. I agree with - never lose money lol =)

There are a LOT of people on forums like this that have been burned in the past by marketers selling 'get rich quick' dreams. As a result, they turn into keyboard warriors looking for vengeance on the entire training industry. Everything thing is a scam and not to be trusted.

It's true that a lot of trading gurus are just fake and selling a dream, but there are legitimate sources.

When you find these sources then it is obviously worth learning from them so that you are on the right path.

I started playing golf in 2015 .... I did read a lot of free articles and my local golf shop had open days with some free lessons etc... But after a few weeks, I kind of hit a wall and so paid for a coach to teach me. This was invaluable and after this, I saw a massive improvement.

Does this mean I'm going to be Jordan Speith? No. Was the coach as good as Jordan Speith? No. But that's not the point ... The point is to simply get onto that right path. He showed me these little nuances that generic 'free' content never could. Babypips.com is fantastic but was it created by a profitable trader? of course not. So it's unlikely to contain those insights that will really accelerate your trading.

The free stuff will definitely get you so far. But at some point, you will hit a 'wall' where your results just stop improving in line with the amount of knowledge you start to build about trading. The next stage is to pay a professional to help you get on that right path. Not to copy his signals or follow his strategy.

There are a ton of professionals around if you know where to look.

Think about it: Hedge funds and prop firms train traders to make money. They don't send them to babypips or to the FF forums. So if they have a training process then it will be available to buy somewhere. That is the beauty of capitalism

My main point is that you need to have a balance. Yes, there is a lot of free stuff to get you going BUT you won't become successful until you actually learn from someone that has already been successful on some level.

When I say 'successful' I mean successful compared to you. Even if the guy just worked inside a prop firm as an analyst ... He is much more likely to know more than you. Even if he was a great trader that made hundreds of thousands of dollars but then blew up ... He is still better than you.

He will have much to teach and you will benefit a lot.

Just my opinion
  • #67
  • Aug 12, 2017 3:14am Aug 12, 2017 3:14am
Quoting RFMagus1
10 Rules for Traders 1. Never use stops. Stops are for amatuers. 2. Never use "How to Trade" trading materials 3. Never buy and use a trading robot 4. Never use chart indicators....price is your best indicator 5. Never worry about risk-to-reward ratios. You can't precisely predict how far a currency pair will move 6. Never use someone elses trading system. Design you own to fit your trading style 7. Never log onto trading forums to get "advice" from other traders. No one has the Holy Grail 8. Never close a trade that has gone negative. Charts prove...
LMAO

1, ive tried it, as have many others, either a mental stop or hard stop work better
2, it depends which ones you read, i haven't read any, but there are good ones out there. Also you are indirectly posting how to trade materials by posting rules...
3, cant say ive ever tested one so i do not know
4, i use chart indicators, as do many.
5, RRR are amazing, 8 wins at -1% and 8 wins at 2% as a basic RRR is good return
6, someone else's trading system may be a lot better than yours, once you work out how to use it, if it is making 10% a month then why wouldn't you use it? im not saying i do that but if you put a free bag of money outside my house every month im going to take it.
7, this is how i learned for majority of my experience.
8, just let it hit the SL
9, if its worth it then why not?
10, i trade on lower than hour.

your rules show your lack of experience. one day you will realise what you wrote is stupid.
  • #68
  • Aug 23, 2017 11:35pm Aug 23, 2017 11:35pm
A trading system is more than just having a rule or set of rules for when to enter and when to exit a trade. When trading the markets, your first priority is to take a look at yourself and note your own personality traits. Examine your strengths and your weaknesses, then ask yourself how you might react if you perceive an opportunity or how you might react if your position is threatened. Be sure that you are comfortable with the type of trading conditions you will experience in different time frames.
  • #69
  • Aug 24, 2017 12:09am Aug 24, 2017 12:09am
Quoting RFMagus1
10 Rules for Traders 1. Never use stops. Stops are for amatuers.
NOT TRUE. Stops are still useful in controlling losses and risk management. They just need to be used wisely and implemented tactfully. Only some "pros" don't use them but they end up with $428 million losses. https://dealbook.nytimes.com/2011/10...-loss/?mcubz=0. If you are not Goldman Sachs, you should consider using stop-losses.

Quoting RFMagus1
2. Never use "How to Trade" trading materials
They are still useful in giving you ideas and laying a foundation upon which you can develop your own trading system which you eventually should.

Quoting RFMagus1
3. Never buy and use a trading robot
You should never buy a trading robot true but you should ALWAYS use a trading robot UNLESS there is an aspect in your trading system that REALLY needs discretionary decision-making. Trading robots takes emotion out of trading and it's ABSOLUTELY useful.

Quoting RFMagus1
4. Never use chart indicators....price is your best indicator
Again chart indicators are useful as they provide PA in an organized manner. Price is an useful indicator but is only ONE of the best indicators.

Quoting RFMagus1
5. Never worry about risk-to-reward ratios. You can't precisely predict how far a currency pair will move.

6. Never use someone elses trading system. Design you own to fit your trading style
All agree.

Quoting RFMagus1
7. Never log onto trading forums to get "advice" from other traders. No one has the Holy Grail
You can still go to forums to get advice from other traders to see they help you. Just because no one has the Holy Grail does NOT mean that you would not come away learning something that will help you trade better. But what's important is you still need to do your own homework and you should not go to trading forums to follow BLINDLY advice from other traders.

Quoting RFMagus1
8. Never close a trade that has gone negative. Charts prove that every pair eventually comes back
ABSOLUTELY NOT true. You should ALWAYS close a trade that has gone negative after a certain threshold. The no. 1 rule to succeed in trading is: Cut your losses EARLY and let your profit run. Charts prove that every pair eventually come back yes that's true BUT you won't know WHEN they come back. They could come back after you have lost all your trading capital and blown your account. The key to trading success is not making profit today but is still be able to trade tomorrow and the day after tomorrow, and the day after the day after tomorrow...and so on until you choose to retire from trading or die whichever comes first. So cut your losses EARLY otherwise your brokers will.

Quoting RFMagus1
9. Never spend money to buy a slick trading system
Agree

Quoting RFMagus1
10. Never trade on any timeframe below the hourly chart.
You can trade on shorter timeframes than hourly. There are traders who are successful scalping aka trading in very short timeframes but you need a good broker with fast feed, small to no slippages, low commissions.
Make your losses in demo. Earn your profits live.
  • #70
  • Aug 24, 2017 12:21am Aug 24, 2017 12:21am
Quoting FerruFx
{quote} Wrong ... You have no way to say that a 99% winrate is profitable or not without the RR. You can be a loser with 99% winrate ... and also you can be profitable with 1% winrate.
Win/lose ratio is NOT the same as Risk/Reward ratio. Win/lose ratio is meaningless not because or risk/reward ratio; it's meaningless without actual profit/loss amount. But risk/reward ratio is an entirely different concept. It's the ratio that is calculated from estimated profit potential vs. potential losses. Since everything is POTENTIAL, then risk/reward ratio is misleading I find. Just because you estimate that the potential profit is going to be 2X the potential loss according to the stop-loss that you set doesn't mean the trade will actually result in that ratio exactly.
Make your losses in demo. Earn your profits live.
  • #71
  • Aug 24, 2017 12:31am Aug 24, 2017 12:31am
Quoting fx1986
I agree that stops are important. But remember what happened when the SNB removed the floor? So they have their limitations.
SL would've still been useful in that SNB event. It was not as effective only because all the "Big Banks" that make up the whole forex market shut down the market by stopping providing quotes. That's NOT a limitation of SL; that's just those "Big Assholes" being assholes. When there is no market, everything has limitation.
Make your losses in demo. Earn your profits live.
  • #72
  • Aug 24, 2017 8:27am Aug 24, 2017 8:27am
Quoting Forexia
{quote} SL would've still been useful in that SNB event. It was not as effective only because all the "Big Banks" that make up the whole forex market shut down the market by stopping providing quotes. That's NOT a limitation of SL; that's just those "Big Assholes" being assholes. When there is no market, everything has limitation.
Just to be clear ... A stop loss would have been completely useless. As in, no use whatsoever. You would have fared no differently than if you didn't have a stop loss order in at all.

The problem wasn't the banks being 'Assholes' it was the fact that no one was buying. Why would they? The SNB removed the floor and everyone wanted to jump in and profit from the drop.

Just because a bank doesn't want to take the other side of an obvious losing trade, it doesn't make a conspiracy.

Generally speaking, a stop loss is very important. Anyone who states they are unnecessary will lose all their money eventually.

My main point is that stop losses don't 'guarantee' anything because that's not how the markets work.
  • #73
  • Aug 24, 2017 11:08am Aug 24, 2017 11:08am
Quoting fx1986
{quote} Just to be clear ... A stop loss would have been completely useless.
My point is EVERYTHING would've been completely useless simply because there was NO MARKET!! What can you do when there is no market and nobody is willing to trade?

Quoting fx1986
{quote}As in, no use whatsoever. You would have fared no differently than if you didn't have a stop loss order in at all. The problem wasn't the banks being 'Assholes' it was the fact that no one was buying. Why would they? The SNB removed the floor and everyone wanted to jump in and profit from the drop. Just because a bank doesn't want to take the other side of an obvious losing trade, it doesn't make a conspiracy.
Their job is to make the market. They are supposed to MAKE a market when there is no market. When everybody wants to trade and there is a market anybody can make a market; you and me putting in a two-way quote, there, there is a market. It's when there is no market that they are supposed to step in and create a market, to stand there to absorb all the orders, not bail and shut down the quote system. They are called market MAKER for that specific reason. During the 2008 financial crisis and all those fat-finger market crashes, all of the exchange specialists are still there taking in orders maintaining the market and incurring large losses. You don't see the NYSE, NASDAQ all shut down with no quotes during those times and whenever there is some major news, do you?

Quoting fx1986
{quote}Generally speaking, a stop loss is very important. Anyone who states they are unnecessary will lose all their money eventually.
That I agree.

Quoting fx1986
{quote}My main point is that stop losses don't 'guarantee' anything because that's not how the markets work.
Yes but nothing does. My main point is that's NOT the fault of stop-losses; it's a group of people that made stop-losses not to work.
Make your losses in demo. Earn your profits live.
  • #74
  • Aug 24, 2017 5:07pm Aug 24, 2017 5:07pm
Quote
Their job is to make the market. They are supposed to MAKE a market when there is no market. When everybody wants to trade and there is a market anybody can make a market; you and me putting in a two-way quote, there, there is a market. It's when there is no market that they are supposed to step in and create a market, to stand there to absorb all the orders, not bail and shut down the quote system. They are called market MAKER for that specific reason. During the 2008 financial crisis and all those fat-finger market crashes, all of the exchange specialists are still there taking in orders maintaining the market and incurring large losses. You don't see the NYSE, NASDAQ all shut down with no quotes during those times and whenever there is some major news, do you?

The only way to make a market is to be the other side of your position. Ultimately whatever broker you use it is a bank (Or the broker if you're on a b-book) that is taking the other side. 'Making a market' makes it sound like they are building a nice platform for everyone to play on. This is not the case. You buy GBP the liquidity provider (Bank) is selling it to you. When you win the bank loses. Simple. Their best hope is to off load the position to another liquidity provider (bank) or speculator (You and me) and let them/us take the loss.

'Everyone trading' simply means that we are all trading against the banks. I don't trade against you and you don't trade against me. All trades are routed through a bank that then takes the other side.

Therefore when you understand that ... It actually makes perfect sense why they would bail during an event like SNB. The reason FXCM (Who were bailed out by a fund) and Alpari and Everest Capital (Who lost almost $1billion) went bankrupt after SNB is because their liquidity providers demanded the payment of losses that had destroyed their retail client accounts. Retail brokers had no chance of forcing retail traders to sell their house and pay the debt so they had to fold.

Finally, the major exchanges REGULARLY shut down when trading becomes too volatile and there is a risk of disproportionate moves. It is called a 'Circuit Breaker' system and is specifically in place because of the significant damage massive price moves can do when the market is all in one way and the big banks remove themselves quickly.

This concept is a basic feature of professional trading.
  • #75
  • Aug 24, 2017 11:08pm Aug 24, 2017 11:08pm
Quoting redoktober
{image}
Lose is a very common part in every business! Here, losing money is very easy so I am not looking for 100% profit here! I know, 100% doesn’t exist here! So, I don’t take high risk reward ratio!
  • #76
  • Aug 25, 2017 2:12pm Aug 25, 2017 2:12pm
Quoting fx1986
{quote}'Everyone trading' simply means that we are all trading against the banks. I don't trade against you and you don't trade against me. All trades are routed through a bank that then takes the other side. Therefore when you understand that ... It actually makes perfect sense why they would bail during an event like SNB.
Well that's their problem. They are the ones who wanted FX to trade OTC with no transparency for them to be the ultimate market maker that sets the price that everybody is forced to take well they need to fulfill their obligation that comes with that OTC system which is taking in all the orders that are routed to them at ALL time. There was an central exchange set up at one point before the 2008 Financial Crisis for FX trading but it failed because all the "liquidity providers" decided to bail out just like how they bailed out during the SNB crisis. You don't just reap all the benefit when everything is advantageous to you and then jump ship when shit hits the fan. If they want all the traders to share the load of the market during "unfavourable" times then they need to participate in a central exchange for ALL traders to be able to trade against each other, making markets to each other with transactional and price transparency. Do they want to do that? No.

Quoting fx1986
{quote}Retail brokers had no chance of forcing retail traders to sell their house and pay the debt so they had to fold.
Well actually they do. If they REALLY want, they can sue you for the amount that's owed to them. The margin that they extend to you for you to trade is essentially a loan. You repay that loan by closing the position at the end of the day but if you can't repay it because your position value deteriorated, well you still owe that money to the broker.

Quoting fx1986
{quote}

Finally, the major exchanges REGULARLY shut down when trading becomes too volatile and there is a risk of disproportionate moves. It is called a 'Circuit Breaker' system and is specifically in place because of the significant damage massive price moves can do when the market is all in one way and the big banks remove themselves quickly. This concept is a basic feature of professional trading.
What the exchanges do is suspending trading but in that case is that NOBODY is able to put in a trade and it is an orderly shutdown and they do it BEFORE any sudden news. But that is NOT what happened during the SNB crisis. There was no shutdown or suspending of trading; people were still able to put in trades seconds before all the market makers decided to stop quoting. The market only became "suspended" after all the "Big Assholes" decided to bail. If they hadn't bailed, the market would've still existed. They were basically willing to trade as long as it's advantageous to them that they could make money off us and then as soon as they see that they are going to lose money to us, they don't want to pay up. On that day, its not just the traders who were on the wrong side of the market who lost money; people who were on the right side lost money too; that's how ridiculous the quotes were. That's why those "Big Assholes" are really the ultimate bucketshops in the Forex industry and they do last-look, requoting just the same to the brokers too.
Make your losses in demo. Earn your profits live.
  • #77
  • Aug 25, 2017 2:21pm Aug 25, 2017 2:21pm
Quoting DarrenLehma
{quote} Lose is a very common part in every business! Here, losing money is very easy so I am not looking for 100% profit here! I know, 100% doesn’t exist here! So, I don’t take high risk reward ratio!
You couldn’t earn 100% profit, its true and there is nobody who can reduce 100% risk ratio, but any kinds of traders can effort 100% for learning Forex. so, concentrate your learning by diligent mentality.
  • #78
  • Aug 25, 2017 2:45pm Aug 25, 2017 2:45pm
Quote
Well actually they do. If they REALLY want, they can sue you for the amount that's owed to them. The margin that they extend to you for you to trade is essentially a loan. You repay that loan by closing the position at the end of the day but if you can't repay it because your position value deteriorated, well you still owe that money to the broker.

There is actually zero chance of any broker winning that suit against a retail trader. At the professional level yes ... But for the little fuck wits that waste their time chatting on Forex Factory forums, we have all the protection we need. Hence why the largest retail broker on the planet needed a bailout and another one of the biggest just went bankrupt.
  • #79
  • Aug 25, 2017 3:28pm Aug 25, 2017 3:28pm
Quoting fx1986
{quote} There is actually zero chance of any broker winning that suit against a retail trader. At the professional level yes ... But for the little fuck wits that waste their time chatting on Forex Factory forums, we have all the protection we need. Hence why the largest retail broker on the planet needed a bailout and another one of the biggest just went bankrupt.
Least they could do is go through a collection agency or sell their debt to recover some of their owed money. It's better than not getting anything at all. Anyway, nobody knows how they run their business so can't comment on that.

But all in all, going back to our original discussion, stop-losses are still valid as long as there is a market. When there is no market, everything fails.
Make your losses in demo. Earn your profits live.
  • #80
  • Last Post: Aug 27, 2017 12:07am Aug 27, 2017 12:07am
Quoting JustUsePrice
Your rules are setting traders up for failure ... you are best staying away from "advising" people on trading rules
some rules are worst . easily marked especially 9. but all are not that you have mentioned
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