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14 Year Old Forex Trader's Lessons

  • #81
  • Sep 15, 2011 10:36am Sep 15, 2011 10:36am
This is mostly directed at cloggie, and goldman, but for whoever who believes to have a good answer to this, please answer. I need firm advice. Not one sentence- or a few words. If you believe something, explain it.

If i open a trade, is the profitability of the trade more important or the equity and money management. I personally feel more free trading with no SL, but i realized how that could kill equity and balance.

-Side question: Do i need to set a stop valid to my mm, or to the market itself?
Have I got something on my face, SOLDIER?
  • #82
  • Sep 15, 2011 11:10am Sep 15, 2011 11:10am
hey buma.. demo for 1 week and go back live.

Open a micro account with $100. Use 1k lots (or 0.01 volume on MT4). You won't gain any confidence going demo. You can only build your trading system. That's all.

By trading system, I mean the way you set your S&R, the way you look at your MACD or other indicators. When you go live, emotions rips away all that you've learned.

The key is to go live, but start very very small. You're still young. My advice to you is 'Build your account'. Slowly increase 1k lots to 2k, to 3k, and so on until you can trade it as a 100k unit account.

By doing this, you build your confidence which is the most important aspect. At the same time, you learn to be in tune with your emotions and detect which are the bad ones (stop trading when too much of those bad ones are present when you're trading).
  • #83
  • Sep 15, 2011 2:12pm Sep 15, 2011 2:12pm
Quoting bumapatria
I personally feel more free trading with no SL, but i realized how that could kill equity and balance.
There are some threads here at FF dedicated to SL vs no SL trading discussion.
I am not an experienced trader but I have yet to hear one valid reason not to place a stop loss immediately upon opening a trade.

Quoting bumapatria
-Side question: Do i need to set a stop valid to my mm, or to the market itself?
Both of course.
You must place a stop based on your strategy and after calculating it adjust your position size so that it fits your money management.
  • #84
  • Edited 5:29pm Sep 15, 2011 5:16pm | Edited 5:29pm
Quoting bumapatria
"The man who robbed the bank of england". I actually thought he robbed the bank. That's when i was young
Practically, he 'broke' the bank, not robbed. Ever thought about how he did it??? It's a good lesson.

Quoting cloggie
Well done kid for hanging in there.

Just a little lesson. There is nothing you can borrow, beg, buy or steal to make it in this business.

Nobody, and I mean nobody who has a winning strategy/style is ever going to share it on a public forum with some muppets he/she doesn't know from Adam.

Stay away from the strategy/system threads, they are full of rubbish. If any of 'm really had a winning system he would be on the phone to GS/DB/UBS and flog it for a couple of mill, not post it on an anonymous forum like this.

You need to find your...
Your selfmade tactic/strategy is your edge against the market. Your chances reduce once it's publicized.

Quoting bumapatria
Thanks cloggie, i honestly never visit the trading systems threads. I have a solid support and resistance entry exit strategy with pp's. I just need a few more indicators or something that gives me more confidence and more conviction when i open a trade. Sometimes fear stops you from gaining, and sometimes greed keeps you from gaining.

Thanks for the advice,

All the best for your trades.
Now, that right there is what kills a new trader. Trying to hide your misjudgment under the auspices of an indicator. Think of the few indicators out there, and consider the number of traders worldwide. Imagine millions of new traders looking at the same signal, take stochs for instance; the big players know what you're looking at, then they place a large buy, your stochs goes above the 30 level, all the newbie traders and EAs follow suit, prices advance a little higher, then they dump the position by reversing it. You loose your profits, and acquire some loss and that's all.
Trust me buma, the best forecaster of the near future is the recent past. As long as you did not invent the indicator yourself, it's not worth it.

Quoting bumapatria
@Goldman. I've read so many things about RSI, but im more proficient in stochastic when entering a trade. Would you care to explain how to use RSI?

I have heard sell when value is 70 and over and buy when 30 or below. I figured that had a lot of gaps in between.

Thanks
it's the fact that a lot of people knows that, that makes it fail.

Quoting bumapatria
This is mostly directed at cloggie, and goldman, but for whoever who believes to have a good answer to this, please answer. I need firm advice. Not one sentence- or a few words. If you believe something, explain it.

If i open a trade, is the profitability of the trade more important or the equity and money management. I personally feel more free trading with no SL, but i realized how that could kill equity and balance.

-Side question: Do i need to set a stop valid to my mm, or to the market itself?
Before opening a trade, I ask myself, if I was a commercial bank, would I enter at these level? what are the odds against me? if the market goes against my entry, what's the highest or lowest it could go?. If you have good answers to this, trust me, the market might move against you, but it will always return to test your entry. For instance, I short a pair @ 3700 and I target 3600, then the market falls to 3665 and return to 3745. I know I was wrong. I exit at the next long setup that happens or if it comes back to 3705. I'm not saying stops are bad but the levels they are placed are so obvious to the brokers and market makers that they tend to run stops before the market reverses and go in your anticipated direction. The last time I checked, banks don't use it. Say I have a $10000 account, I know the market has to move 10000 pips against me to wipe me out using standard lots. I'm sure the long term range of any pair is not up to that.
If you must use a SL, it should be wide enough to stay away from been ran. And if it is that wide, you should've known you were wrong and taken your losses or reversed your positions already. Don't fall in love with your positions. (Still trying to figure out how that SNB guy lost $2 billion in cash)

About the SL and MM to the market, think of it this way: say you short at daily resistance R1, you might want to place your stop at R2. Now if the distance between R1 and R2 is greater than the maximum % of your account you're willing to loose on a single trade, cut down your lotsize to fit in, if not, just pass the trade. Trust me, there are only two things you can loose in forex: CAPITAL and OPPORTUNITY. If you can protect your capital, there will always be another opportunity.

Just my own simple opinion. In life, nothing is sure, and so is price action, money management and ideas.
Don't just beat the markets, leave bruises.
  • #85
  • Sep 15, 2011 6:16pm Sep 15, 2011 6:16pm
Quoting Motion
Practically, he 'broke' the bank, not robbed. Ever thought about how he did it??? It's a good lesson.


Your selfmade tactic/strategy is your edge against the market. Your chances reduce once it's publicized.


Now, that right there is what kills a new trader. Trying to hide your misjudgment under the auspices of an indicator. Think of the few indicators out there, and consider the number of traders worldwide. Imagine millions of new traders looking at the same signal, take stochs for instance; the big players know what you're...

... Great advice, very well put!
Ghost Rider - WWTBMD?
  • #86
  • Sep 15, 2011 10:00pm Sep 15, 2011 10:00pm
Quoting Motion
Practically, he 'broke' the bank, not robbed. Ever thought about how he did it??? It's a good lesson.


Your selfmade tactic/strategy is your edge against the market. Your chances reduce once it's publicized.


Now, that right there is what kills a new trader. Trying to hide your misjudgment under the auspices of an indicator. Think of the few indicators out there, and consider the number of traders worldwide. Imagine millions of new traders looking at the same signal, take stochs for instance; the big players know what you're looking...
Great advice my friend. I'm sure thats going to give me more discipline in entry and exits.
Have I got something on my face, SOLDIER?
  • #87
  • Sep 16, 2011 1:34am Sep 16, 2011 1:34am
Quoting bumapatria
This is mostly directed at cloggie, and goldman, but for whoever who believes to have a good answer to this, please answer. I need firm advice. Not one sentence- or a few words. If you believe something, explain it.

If i open a trade, is the profitability of the trade more important or the equity and money management. I personally feel more free trading with no SL, but i realized how that could kill equity and balance.

-Side question: Do i need to set a stop valid to my mm, or to the market itself?
It depends on strategy, if i scalp i usually do not use stop loss because i can intervene if needed BUT i think every beginner should use stop loss and start with swing trading.
Rocky made a very good comment here, i also think that lagging indicators or even all the indicators are preventing you to see the markets in a way that big dogs see it. Like i said before you actually don't need indicators at all and I reccommended removing them all. I can see every day in the markets how big dogs slaugher the small ones. Most people don’t understand supply and demand zones and price action. If you want to be one of the kings of this game then you must be able to see markets in a way that the big dogs do, with lagging indicators you are always one step behind.

For me trading is a psychology and philosophy. In every game there is always a victor, and there's always a victim. More control the victim thinks he has, less control he actually has. You can see very well how in supply and demand zones big dogs feed peaces to you and make you believe that you took those pieces because you’re smarter and market is dumber, but in the end, you’re still getting slaughtered. I think most of you don’t really understand what I’m saying even if you think you understand...you don’t.
  • #88
  • Sep 16, 2011 3:12am Sep 16, 2011 3:12am
Quoting bumapatria
This is mostly directed at cloggie, and goldman, but for whoever who believes to have a good answer to this, please answer. I need firm advice. Not one sentence- or a few words. If you believe something, explain it.

If i open a trade, is the profitability of the trade more important or the equity and money management. I personally feel more free trading with no SL, but i realized how that could kill equity and balance.

-Side question: Do i need to set a stop valid to my mm, or to the market itself?
I know some do trade with no SL, however I think money management is the key to success or failure.

See what can happen, the miracle he hoped for never happened - http://bit.ly/quFVNj

My max loss per trade at the moment is 1.75%. Maximum of 3 losses a day. Every trade I enter will always have that 1.75% SL set, which for my trade size is 30 pips.

The stop needs to be set at a place which makes sense, ie if your short, don't put the stop just below near resistance, it needs to go above. Size your trade to keep your risk at a sensible level. If your SL is 100 pips the trade size would be half of what it would be for a 50 pip SL.

There's a post on here somewhere that shows how much you need to gain to offset % losses. Eg if you lose 50% of your account, to get back to even you need to achieve 100% - not 50%! This is why many advocate no more than a 2% SL.
  • #89
  • Sep 16, 2011 4:27am Sep 16, 2011 4:27am
Quoting andys0506
I know some do trade with no SL, however I think money management is the key to success or failure.

See what can happen, the miracle he hoped for never happened - http://bit.ly/quFVNj

My max loss per trade at the moment is 1.75%. Maximum of 3 losses a day. Every trade I enter will always have that 1.75% SL set, which for my trade size is 30 pips.

The stop needs to be set at a place which makes sense, ie if your short, don't put the stop just below near resistance, it needs to go above. Size your trade to keep your risk at a sensible...
Okay, thank you my friend.

MM comes first then.
Have I got something on my face, SOLDIER?
  • #90
  • Sep 16, 2011 4:36am Sep 16, 2011 4:36am
Quoting GoldMan.
It depends on strategy, if i scalp i usually do not use stop loss because i can intervene if needed BUT i think every beginner should use stop loss and start with swing trading.
Rocky made a very good comment here, i also think that lagging indicators or even all the indicators are preventing you to see the markets in a way that big dogs see it. Like i said before you actually don't need indicators at all and I reccommended removing them all. I can see every day in the markets how big dogs slaugher the small ones. Most people don’t understand...
Truthfully, I don't understand this completely. I'm still in the process of learning how specific price levels are psychological to the next move. I'm still learning. I agree that indicators are lagging and useless, and if not half-useful.

Are supply and demand, similar to support and resistance?

THanks goldman
Have I got something on my face, SOLDIER?
  • #91
  • Sep 16, 2011 4:47am Sep 16, 2011 4:47am
Quoting bumapatria
Truthfully, I don't understand this completely. I'm still in the process of learning how specific price levels are psychological to the next move. I'm still learning. I agree that indicators are lagging and useless, and if not half-useful.

Are supply and demand, similar to support and resistance?

THanks goldman
Yes, supply and demand zones on weekly chart:
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd weekly supply and demand.png Size: 82 KB
  • #92
  • Sep 16, 2011 4:57am Sep 16, 2011 4:57am
The example I was talking about earlier.
See how important it is to keep losses small.
Attached Image
  • #93
  • Sep 16, 2011 5:00am Sep 16, 2011 5:00am
Quoting andys0506
The example I was talking about earlier.
See how important it is to keep losses small.

Yeah i can see the difference and it does make sense.
Say you got $1000. You now have 100$. it does take 900% of $100 to get back to BE no loss no profit.

Thanks for the heads up.
Have I got something on my face, SOLDIER?
  • #94
  • Sep 16, 2011 5:01am Sep 16, 2011 5:01am
Quoting GoldMan.
Yes, supply and demand zones on weekly chart:
I very much am a S/R Trader but mostly with H4, H1, and daily. Weekly, im not that much good of entry with larger TFs. Im not comfortable with floating loss of over 30 pips.

Thats why you recommended swing trading with gmma right?
Have I got something on my face, SOLDIER?
  • #95
  • Sep 16, 2011 5:04am Sep 16, 2011 5:04am
@Goldman. Any tips trading with larger TF's?
Have I got something on my face, SOLDIER?
  • #96
  • Sep 16, 2011 5:27am Sep 16, 2011 5:27am
Quoting bumapatria
I very much am a S/R Trader but mostly with H4, H1, and daily. Weekly, im not that much good of entry with larger TFs. Im not comfortable with floating loss of over 30 pips.

Thats why you recommended swing trading with gmma right?
Quoting bumapatria
@Goldman. Any tips trading with larger TF's?
I don't trade weekly chart also, i just mark those areas so i can see (for exaple) on H1 chart when price has moved in that zone. I use GMMA because it shows very detailed bull and bear strenght. You can also look buy and sell entry with that but i don't pay much antention to that.
Try to catch 100-500 pip moves, maybe 1-3 trades a month. It may sound too boring but i think you will learn the most by doing that. Many people have given you good advice already, now you just need to practise.
  • #97
  • Sep 16, 2011 5:29am Sep 16, 2011 5:29am
i see some other traders 'lurking' on this thread. If you have any important advice; i repeat important advice, please share it here for me, and other beginners in this thread.

Thanks

Have I got something on my face, SOLDIER?
  • #98
  • Sep 16, 2011 6:13am Sep 16, 2011 6:13am
First swing trade on EUR/AUD.

See chart for more details.

IF any mistakes taken, or comments you want to add, feel free to do so.
Attached Image (click to enlarge)
Click to Enlarge Name: swing trade.gif Size: 53 KB
Have I got something on my face, SOLDIER?
  • #99
  • Sep 16, 2011 8:32am Sep 16, 2011 8:32am
Yes not quite sure what has happened!
Guys clear the air, I still believe this thread is good and will get better.
  • #100
  • Sep 16, 2011 8:40am Sep 16, 2011 8:40am
I was intrigued until he posted a chart, wow im tripping out just looking at that chart, indicator frenzy. Theres only one route for ppl with charts like that, and im not going to say it out loud as all the profitable traders will know the answer. That is all
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