Ok guys lets get stuck into this.
I call this THE POINT TO POINT SYSTEM, for obvious reasons as you will see.
I will start by going over the basic rules that make this system, thats the easy bit.
The hard bit is learning what for many, who are used to trading with indicators, will have to learn how to trade properly and not just blindly act when a lagging indicator tells you to.
I"ll cover each section individually.
PAIRS;
we trade mainly on the yen pairs, but can be traded on any pair that has a small spread.
both my wife and i trade this system together with 4 computers monitoring 2 pairs each, you can do it on one computer it just means changing screens a lot which i find very annoying.
The spread is very important because we are using such a tight stop anything more than a 1.5pip spread will cause you to get stopped out too often, fortunately my broker offers spreads anywhere between 0 and 1.5pips on all the majors.
MONEY MANAGMENT;
Very important not only for your survival but peace of mind, never risk more than 2% on any trade, for example if you had a $1000 account with a 5pip s/l you would only ever be risking $20 per trade, and we are working on a 1 to 4 Risk /Reward ratio so a win will generate $80. We do not reduce the trade risk after a loss we keep it at 2% percent of your original balance as loosing runs dont generally last very long, the longest i have had was 6 from memory and even with that it only takes 2 winning trades to get back in the black .
Some may think that chasing a 1 to 4 R/R is very ambitious and very often just miss out on getting there and may be tempted to go with a 1 to 2 or 1 to 3 R/R, but if you fall into this trap you will never realize this systems full potential. And i will show you a way later where it is possible to even exceed 1 to 4.
Cont.
I call this THE POINT TO POINT SYSTEM, for obvious reasons as you will see.
I will start by going over the basic rules that make this system, thats the easy bit.
The hard bit is learning what for many, who are used to trading with indicators, will have to learn how to trade properly and not just blindly act when a lagging indicator tells you to.
I"ll cover each section individually.
PAIRS;
we trade mainly on the yen pairs, but can be traded on any pair that has a small spread.
both my wife and i trade this system together with 4 computers monitoring 2 pairs each, you can do it on one computer it just means changing screens a lot which i find very annoying.
The spread is very important because we are using such a tight stop anything more than a 1.5pip spread will cause you to get stopped out too often, fortunately my broker offers spreads anywhere between 0 and 1.5pips on all the majors.
MONEY MANAGMENT;
Very important not only for your survival but peace of mind, never risk more than 2% on any trade, for example if you had a $1000 account with a 5pip s/l you would only ever be risking $20 per trade, and we are working on a 1 to 4 Risk /Reward ratio so a win will generate $80. We do not reduce the trade risk after a loss we keep it at 2% percent of your original balance as loosing runs dont generally last very long, the longest i have had was 6 from memory and even with that it only takes 2 winning trades to get back in the black .
Some may think that chasing a 1 to 4 R/R is very ambitious and very often just miss out on getting there and may be tempted to go with a 1 to 2 or 1 to 3 R/R, but if you fall into this trap you will never realize this systems full potential. And i will show you a way later where it is possible to even exceed 1 to 4.
Cont.
patience is bitter, but its fruit is sweet