New traders Guide
Hello and Welcome To the wonderful world of trading!
If you come here I guess you are a new trader, or you didn't really get started out yet.
Good for you, because then. you are in luck to get some good advise
before you all tumble off and fall into a hole. Because believe me,
there are many holes in this business. this page will be updated from time to time,
if I find out that I forgot to write something I think could help you,
I will come back and make an update. so keep checking in now and then.
Indicators
Stop your search for indicators that will win for you,
there are no such thing, I trade with no indicators at all,
I use trend lines, Fibonacci levels, pitchforks.
support resistance, that’s it.
and have been doing so for a long time. price is what you should be concerned about.
all indicators are lagging behind price. which makes them more or less useless.
another indicator you will add will just confuse you even more.
so please, take them all away from your charts.
About me
I have traded Forex live for 8 years and before that options and stocks 3 years.
The experience I have from my time trading is what I will share with you.
What it takes
First you should know that trading is not easy as someone might have told you.
Or maybe you read it on a web site somewhere? Let me get this straight.
There is no easy money, rich over night, holy grail
if anyone is telling you the opposite, they are lying and probably want to sell you a product.
You should know that by entering this world of trading, you will have to make a serious effort.
And you will have to get your hands dirty. You will have to make a serious work,
not only about education, but about your own psychological mind set.
This is not something that will happen over night.
It might take many months, maybe years.
If you want to succeed there are no short cuts.
You are going to spend most if not all your free time to educate your self.
And work on your self.
If this is not for you, then I am afraid there is no future for you in trading.
You are better off depositing your money to a savings account at your bank.
Trading just isn't for everyone.
To be good at something, you simply must have a serious interest.
You must love the idea about trading,
and you should love to sit all day in front of your computer.
If you are prepared to make a serious effort no matter how long it takes,
then you got the right spirit.
Do you think Tiger Woods love playing Golf? You bet!
Brokers
The first thing you should do is learn about the different brokers.
There are plenty of them out there, but only a few of them are quality Brokers,
It is vital! that you find one of these brokers. (I will not be giving advise of brokers so pls don't ask)
There are four kinds of brokers.
1. STP NDD
2. ECN
3. DMA
4. DD
STP is (straight through protocol) what it means is that your order goes straight though the broker into the market more or less, often the spread are a bit larger instead of using commission.
NDD (No dealing desk broker) more or less the same as STP
ECN, is (electronic communication network) What this means is it's like a internal network to the market, if you have a ecn you will be trading in this internal network. First the order is grabbed from the market and then when it is traded within the ECN you can get an even better price.
DMA is (direct market access) it means your order goes directly to the market, you will be paying commission for each trade. this is a new thing and there aren't many around yet.
DD (dealing desk broker) number 4 should not be your choice as broker because he will trade against you,
he will try his best to make you lose. This broker is your worst enemy as a trader,
shy them as plaque! Yes unfortunately they still exist.
UPDATE 1: Some of these brokers don't tell you what their model is, and some of them will out right lie to you.
they can for example say, yes we are a ECN just to make you sign up.
there is only one thing to do if you are unlucky to have such a broker.
if you see a re-quote, close the account immediatly. because this broker will try everything
to mess with your trades, I have seen it all, platform freeze, re-quotes order blocking and more,
guys! trading is hard enough than also being able to put up with this, ditch this broker NOW!
So then how are you going to know if they lie or not?
there is a way for everything, you need a live account for this,
but once you get it, check to see if you can make a trade within the spread.
between the ask and bid, if you can, this is a true ECN, if not, they are lying,
this is the first thing you should do one you have opened a live account with a ECN.
there are also market makers ( creates his own market) and none market makers
the market makers are the ones that generally uses dealing desk and STP.
in my opinion they should be avoided.
So which broker model would be the best for you?
The most important thing after avoiding number 4 is the speed of execution and commission,
after that the spread.
The execution is more or less the same on the other 3
but DMA is always the best. Because it goes straight into the market
and there is also the least conflict of interest.
You can't get better than that. If you can't find one, go for ECN.
The spread is the least important thing here. But however, it is not unimportant.
for scalpers or for making very short term trades. sometimes only a few minutes. it is more important
then what you are looking for is maximum 1 pip between the ask and bid.
But hold on! Don't just go and grab the first DMA or ECN.
Make your homework, do some research, because believe it or not.
There are brokers out there claiming to be ECN and they just aren't.
There are liars crocks and thieves everywhere, but especially where the big money is.
So do your homework, and make sure your broker is regulated,
the broker should be regulated in your country or at least in the same region.
Your broker should have segregated accounts. What does that mean?
It means your money goes into a separate account at the brokers bank.
This ensures that he will not be using your money for his own investments.
I wish I knew all this when I started trading, I had to learn the hard way. At that time there was not as much information as these days. But here I'm giving it to you.
Do the research, check the registers at the regulators if your broker have any complaints.
Education
Al right, you have found your broker. Go ahead and download their demo software.
Here is where you will be for a long time.
Now educate your self in
1. Technical analysis.
2. Risk management.
3. money management.
After you learned this and maybe you tested something out that you think might work.
It is time to test it on your demo account, and maybe you have your own ideas.
Test them all on demo, do not trade live just yet.
Research
What you are looking for is consistency, something that will work over and over again.
This is something you can use to build your own trading system from.
You can also test others methods here on FF.
in general, to get any meaningful reading, you must have at least 1000 trades.
this is the number where probability tend to level out.
You will execute each trade exactly the same way based on your trading plan.
then go back and see what the win rate and other things.
such as draw down, risk vs reward and more.
Therefore it is important to keep a log of all your trades, I know it is boring, but this is the only way.
You simply will not remember the trades you did a long time ago.
so if you are not doing this, how will you find out what is consistent or not. You won't!
Going Live
OK, so now you have a good broker and a consistent trading system.
It is time to test your ideas live.
But first you must write down your trading plan.
It should contain all the rules about your trading system,
and what you would do if the market would go against you.
where will you enter and exit, how will you manage your trade once in?
You should read your trading plan every day before you start to trade.
This is important! you should imprint these ideas to your mind until they stick.
this will train your mind not to do any foolish things.
Deposit some money and start trading. You should only trade 1 micro lot at this point.
Here is when you will start to train your mind and your own psychology.
You should keep a log of your mind to, after each trading day you go back and see what you did,
did you follow the trading plan? If not then why? Write that down.
This kind of training is never going to stop. Even as a profitable trader you must constantly
keep checking your mind set.
After you have at least 300 trades and a good consistent result.
Then start trading with larger amounts but never more than 1% or your account.
How did your mind react to these larger amounts? Fear?
Take a note. And keep trading, you want to see if you can maintain the same consistency.
If you can't, you need to work on your self.
If you can, then move up to 2% of your trading account.
Finally you made it! Good work trader!
Side notes:
In trading you should rely on your technical analysis.
Trade what you see, not what you believe.
if the direction is up, trade up!
do not trade down because you "think" it will reverse.
Do not let news affect your trading,
almost all news are usually priced in already.
If technical analysis tells you to trade, then trade!
Do not sit and wait because some news is about to be released.
this is a waiste of time and trading oportunities.
you are here to make money, what is your hourly time worth?
you risk is never larger than your stop loss, News release or not.
so always use a stop loss.
a trading system is personal,
if you have a profitable trading system and you give it to a group of 10 people,
then only a third will be profitable, this is because their minds do not agree about the rules.
so there will be no confidence trading it. confidence is important for success.
so you will have to create your own method that will be right for you.
this will give you confidence and success, because you know it works.
Update 2: Timeframe
Which time frame should you trade on? this is a question many new traders ask.
as if there would be a special time frame that is better than any other time frame,
well there isn't, one thing you need to understand about the markets is that they are fractal,
what does that mean? if you don't know what a fractal is, let me explain.
imagine your self a picture, tear the picture into thousands of small pieces,
then pick up one of the pieces and look at it with a magnifying glass,
now you will see the entire complete picture. that is the nature of a fractal.
and if you take one of the small pieces and tear that into thousand pieces and take a look at one of those,
you will still see the complete picture, and so it goes on and on forever, that is how a fractal is.
the markets is the same, the market is of the fractal nature. so when you zoom in to a lower time frame.
you will see the same thing, up and down and sideways, you will see all the patterns you will see at any other time frame.
it doesn't matter which time frame you zoom in on, you will still see the complete picture.
so by now you should understand which time frame to trade on, really does not matter at all,
because they are all a complete picture of the market.
there is only a question of convenience, and how much time you have each day to trade.
do you like to trade all day? chose the 5 minutes or 15 minutes.
do you have a regular day work, then chose the daily chart.
are you away working all week and are only free on weekends? use the weekly chart.
the only time frame I don't like is 1 minute chart.
I have tried it but I find it to narrow to make decent pips..
the swings tend to be only for a few pips.
there are traders loving the 1 minute chart and trading it every day.
it's just not for me, maybe it is for you. time frame is personal.
just pick the one you like best.
one thing to know is that the higher you go, the more reliable trades you will get.
simply because there is more data in each bar.
but at the same time, the higher you go, the higher risk you have to take.
your stop losses tend to be larger because there is larger and larger swings the higher you go.
if you use another software than Metatrader that have tick charts, range charts or any other charts.
they are fractal to, even though some of these are not time based,
the same thing applies there, just pick the one that suites you best.
Update 3: Which pair to trade?
Should you trade only EURUSD because that is what everyone else does?
you could, it is by far the most popular pair to trade, it also have the smallest spread.
so it is the cheapest pair to trade to.
should you only go long AUDUSD only because you are an Australian and you want to support your country?
hardly! when I heard about that I couldn't believe it.
there is nothing wrong with trading and specializing on just one pair but personally I like to diversify.
I like to trade the strongest currency against the weakest, this will put the odds in your favour.
how do you know which pair is weak vs strong? there are plenty of websites having this.
Google it. search for currency strength.
Update4: Can you get rich trading forex with a small starting capital?
Yes there is a resonable chance to get stinkin rich trading Forex,
because of the high leverage offered, and the small lot sizes that can be traded.
Forex have the best potential to grow a small account very fast compared to other instruments like for ex, stocks,
We can get rich very fast by compounding, that means that your winners and losers will grow in size, as your account size grows,
by using money management and always trading a set percentage of the intire account balance,
we will accomplish this effect, using variable lot sizing according to risk management.
As a beginner you should never ever I repeat EVER!
Trade more than 1% of your intire account, you might think this is small?
it is, but it ensures that you have enough money left on your account even if you get a row of losers.
Note that even if you have a 70% winrate on your trading method.
it IS technically possible that you can get all the remaining 30% losses in a row.
sometimes probability works in mysterious ways.
unlikely, but definitely possible. or a least a lot of them in a row,
believe me, things like this will happen to you somewhere down the line.
you just never knows when it will happen. and if you are over trading at the time, your'e done trading,
and you'll wipe out your account.
If you have one trade open at 1% of your account,
you are NOT allowed to open another position until your current trade
is either closed, or you moved your stop loss to brake even.
Learn money management and how to calculate your lot size.
this is a key thing you must learn, there are plenty of lot size calculators on the net if you are lazy.
and even lot size indicators you can install in Metatrader.
this is a well worth investment.
if you think this is difficult to calculate manually,
just get one of those indicators, they will calculate for you on the fly.
Or, you can simply do this.
On a 100 dollar account, trade 1 micro,
200 = 2 micro's
300 = 3 micro's
400 = 4 micro's
1000 = 1 mini lot (10000 units)
2000 = 2 mini lots (20000 units)
10000 = 1 full lot (100 000 units)
etc etc.
This will keep you well inside safe sizes.
and you can't get more easy than that.
Your capital is your tools, simular to a carpenters tools.
without them, he cannot do his job, and wihout your capital,you are done trading.
so protecting your capital is a traders highest priority. always use a stop loss.
and always manage your trade with moving your stop loss closer to entry as the trade goes in your favour.
As time goes by, if you have a winning system the leverage will work in your favour..
and your account will grow rapidly. even with this small amount traded,
you would be suppriced how fast it can go. but please don't jump the gun.
Make sure you have a winning system before you start trading live,
when you become good at trading you can use 2% maximum 5%.
As a beginner, high leverage is not your friend,
it might be a good idea to lower your leverage when you first strarted out.
this will protect your capital for comon newbe misstakes,
because leverage goes both ways, it can either make more money for you,
or it can hurt your account more if it goes against you.
I strongly suggest you trade with maximum 50 to 1 in the begining.
talk to your broker, he will be able to help you with this.
High leverage allows you to buy more units on a small margin.
and if you over trade, this will be your doom.
It can also mean riches to be enjoyed if used correctly.
always trade according to your trading plan,
everybody can train them selves to be disciplined.
Update 5: Don't get caught in the Squirrel wheel
This is a phenomenom that can happen to new traders as they are testing out
trading system after trading system and keeps coming back to the same old result.
When you are testing a new trading system, maybe you found it online or maybe you bought it.
maybe you came up with it your self.
you then test it out for about 20 trades live in the markets,
you get 10 losses in a row and you treat the system as a losing system,
you think to your self, this system is compleate garbage!
then you ditch the system and goes on to find the next holy grail.
This goes on and on and on like a squirrel wheel.
Stop right there! you cannot judge a trading system based on just 20 trades, or 100 trades. or even 500 trades.
Probability take a long time before leveling out, what do I mean by that?
well, take a coin and flip it, take a guess on heads every time,
how many times do you think you have to flip it to get to 50% heads?
20? 50? 400?
The answer is close to 1000 times.
so if you ditch each system just based on a few losses you will never find a winning trading system.
take your time with them, and test them prooperly.
1000 trials gives a reliable number.
Thanks everyone for the feedback
it's Apprechiated
Good luck!
Hello and Welcome To the wonderful world of trading!
If you come here I guess you are a new trader, or you didn't really get started out yet.
Good for you, because then. you are in luck to get some good advise
before you all tumble off and fall into a hole. Because believe me,
there are many holes in this business. this page will be updated from time to time,
if I find out that I forgot to write something I think could help you,
I will come back and make an update. so keep checking in now and then.
Indicators
Stop your search for indicators that will win for you,
there are no such thing, I trade with no indicators at all,
I use trend lines, Fibonacci levels, pitchforks.
support resistance, that’s it.
and have been doing so for a long time. price is what you should be concerned about.
all indicators are lagging behind price. which makes them more or less useless.
another indicator you will add will just confuse you even more.
so please, take them all away from your charts.
About me
I have traded Forex live for 8 years and before that options and stocks 3 years.
The experience I have from my time trading is what I will share with you.
What it takes
First you should know that trading is not easy as someone might have told you.
Or maybe you read it on a web site somewhere? Let me get this straight.
There is no easy money, rich over night, holy grail
if anyone is telling you the opposite, they are lying and probably want to sell you a product.
You should know that by entering this world of trading, you will have to make a serious effort.
And you will have to get your hands dirty. You will have to make a serious work,
not only about education, but about your own psychological mind set.
This is not something that will happen over night.
It might take many months, maybe years.
If you want to succeed there are no short cuts.
You are going to spend most if not all your free time to educate your self.
And work on your self.
If this is not for you, then I am afraid there is no future for you in trading.
You are better off depositing your money to a savings account at your bank.
Trading just isn't for everyone.
To be good at something, you simply must have a serious interest.
You must love the idea about trading,
and you should love to sit all day in front of your computer.
If you are prepared to make a serious effort no matter how long it takes,
then you got the right spirit.
Do you think Tiger Woods love playing Golf? You bet!
Brokers
The first thing you should do is learn about the different brokers.
There are plenty of them out there, but only a few of them are quality Brokers,
It is vital! that you find one of these brokers. (I will not be giving advise of brokers so pls don't ask)
There are four kinds of brokers.
1. STP NDD
2. ECN
3. DMA
4. DD
STP is (straight through protocol) what it means is that your order goes straight though the broker into the market more or less, often the spread are a bit larger instead of using commission.
NDD (No dealing desk broker) more or less the same as STP
ECN, is (electronic communication network) What this means is it's like a internal network to the market, if you have a ecn you will be trading in this internal network. First the order is grabbed from the market and then when it is traded within the ECN you can get an even better price.
DMA is (direct market access) it means your order goes directly to the market, you will be paying commission for each trade. this is a new thing and there aren't many around yet.
DD (dealing desk broker) number 4 should not be your choice as broker because he will trade against you,
he will try his best to make you lose. This broker is your worst enemy as a trader,
shy them as plaque! Yes unfortunately they still exist.
UPDATE 1: Some of these brokers don't tell you what their model is, and some of them will out right lie to you.
they can for example say, yes we are a ECN just to make you sign up.
there is only one thing to do if you are unlucky to have such a broker.
if you see a re-quote, close the account immediatly. because this broker will try everything
to mess with your trades, I have seen it all, platform freeze, re-quotes order blocking and more,
guys! trading is hard enough than also being able to put up with this, ditch this broker NOW!
So then how are you going to know if they lie or not?
there is a way for everything, you need a live account for this,
but once you get it, check to see if you can make a trade within the spread.
between the ask and bid, if you can, this is a true ECN, if not, they are lying,
this is the first thing you should do one you have opened a live account with a ECN.
there are also market makers ( creates his own market) and none market makers
the market makers are the ones that generally uses dealing desk and STP.
in my opinion they should be avoided.
So which broker model would be the best for you?
The most important thing after avoiding number 4 is the speed of execution and commission,
after that the spread.
The execution is more or less the same on the other 3
but DMA is always the best. Because it goes straight into the market
and there is also the least conflict of interest.
You can't get better than that. If you can't find one, go for ECN.
The spread is the least important thing here. But however, it is not unimportant.
for scalpers or for making very short term trades. sometimes only a few minutes. it is more important
then what you are looking for is maximum 1 pip between the ask and bid.
But hold on! Don't just go and grab the first DMA or ECN.
Make your homework, do some research, because believe it or not.
There are brokers out there claiming to be ECN and they just aren't.
There are liars crocks and thieves everywhere, but especially where the big money is.
So do your homework, and make sure your broker is regulated,
the broker should be regulated in your country or at least in the same region.
Your broker should have segregated accounts. What does that mean?
It means your money goes into a separate account at the brokers bank.
This ensures that he will not be using your money for his own investments.
I wish I knew all this when I started trading, I had to learn the hard way. At that time there was not as much information as these days. But here I'm giving it to you.
Do the research, check the registers at the regulators if your broker have any complaints.
Education
Al right, you have found your broker. Go ahead and download their demo software.
Here is where you will be for a long time.
Now educate your self in
1. Technical analysis.
2. Risk management.
3. money management.
After you learned this and maybe you tested something out that you think might work.
It is time to test it on your demo account, and maybe you have your own ideas.
Test them all on demo, do not trade live just yet.
Research
What you are looking for is consistency, something that will work over and over again.
This is something you can use to build your own trading system from.
You can also test others methods here on FF.
in general, to get any meaningful reading, you must have at least 1000 trades.
this is the number where probability tend to level out.
You will execute each trade exactly the same way based on your trading plan.
then go back and see what the win rate and other things.
such as draw down, risk vs reward and more.
Therefore it is important to keep a log of all your trades, I know it is boring, but this is the only way.
You simply will not remember the trades you did a long time ago.
so if you are not doing this, how will you find out what is consistent or not. You won't!
Going Live
OK, so now you have a good broker and a consistent trading system.
It is time to test your ideas live.
But first you must write down your trading plan.
It should contain all the rules about your trading system,
and what you would do if the market would go against you.
where will you enter and exit, how will you manage your trade once in?
You should read your trading plan every day before you start to trade.
This is important! you should imprint these ideas to your mind until they stick.
this will train your mind not to do any foolish things.
Deposit some money and start trading. You should only trade 1 micro lot at this point.
Here is when you will start to train your mind and your own psychology.
You should keep a log of your mind to, after each trading day you go back and see what you did,
did you follow the trading plan? If not then why? Write that down.
This kind of training is never going to stop. Even as a profitable trader you must constantly
keep checking your mind set.
After you have at least 300 trades and a good consistent result.
Then start trading with larger amounts but never more than 1% or your account.
How did your mind react to these larger amounts? Fear?
Take a note. And keep trading, you want to see if you can maintain the same consistency.
If you can't, you need to work on your self.
If you can, then move up to 2% of your trading account.
Finally you made it! Good work trader!
Side notes:
In trading you should rely on your technical analysis.
Trade what you see, not what you believe.
if the direction is up, trade up!
do not trade down because you "think" it will reverse.
Do not let news affect your trading,
almost all news are usually priced in already.
If technical analysis tells you to trade, then trade!
Do not sit and wait because some news is about to be released.
this is a waiste of time and trading oportunities.
you are here to make money, what is your hourly time worth?
you risk is never larger than your stop loss, News release or not.
so always use a stop loss.
a trading system is personal,
if you have a profitable trading system and you give it to a group of 10 people,
then only a third will be profitable, this is because their minds do not agree about the rules.
so there will be no confidence trading it. confidence is important for success.
so you will have to create your own method that will be right for you.
this will give you confidence and success, because you know it works.
Update 2: Timeframe
Which time frame should you trade on? this is a question many new traders ask.
as if there would be a special time frame that is better than any other time frame,
well there isn't, one thing you need to understand about the markets is that they are fractal,
what does that mean? if you don't know what a fractal is, let me explain.
imagine your self a picture, tear the picture into thousands of small pieces,
then pick up one of the pieces and look at it with a magnifying glass,
now you will see the entire complete picture. that is the nature of a fractal.
and if you take one of the small pieces and tear that into thousand pieces and take a look at one of those,
you will still see the complete picture, and so it goes on and on forever, that is how a fractal is.
the markets is the same, the market is of the fractal nature. so when you zoom in to a lower time frame.
you will see the same thing, up and down and sideways, you will see all the patterns you will see at any other time frame.
it doesn't matter which time frame you zoom in on, you will still see the complete picture.
so by now you should understand which time frame to trade on, really does not matter at all,
because they are all a complete picture of the market.
there is only a question of convenience, and how much time you have each day to trade.
do you like to trade all day? chose the 5 minutes or 15 minutes.
do you have a regular day work, then chose the daily chart.
are you away working all week and are only free on weekends? use the weekly chart.
the only time frame I don't like is 1 minute chart.
I have tried it but I find it to narrow to make decent pips..
the swings tend to be only for a few pips.
there are traders loving the 1 minute chart and trading it every day.
it's just not for me, maybe it is for you. time frame is personal.
just pick the one you like best.
one thing to know is that the higher you go, the more reliable trades you will get.
simply because there is more data in each bar.
but at the same time, the higher you go, the higher risk you have to take.
your stop losses tend to be larger because there is larger and larger swings the higher you go.
if you use another software than Metatrader that have tick charts, range charts or any other charts.
they are fractal to, even though some of these are not time based,
the same thing applies there, just pick the one that suites you best.
Update 3: Which pair to trade?
Should you trade only EURUSD because that is what everyone else does?
you could, it is by far the most popular pair to trade, it also have the smallest spread.
so it is the cheapest pair to trade to.
should you only go long AUDUSD only because you are an Australian and you want to support your country?
hardly! when I heard about that I couldn't believe it.
there is nothing wrong with trading and specializing on just one pair but personally I like to diversify.
I like to trade the strongest currency against the weakest, this will put the odds in your favour.
how do you know which pair is weak vs strong? there are plenty of websites having this.
Google it. search for currency strength.
Update4: Can you get rich trading forex with a small starting capital?
Yes there is a resonable chance to get stinkin rich trading Forex,
because of the high leverage offered, and the small lot sizes that can be traded.
Forex have the best potential to grow a small account very fast compared to other instruments like for ex, stocks,
We can get rich very fast by compounding, that means that your winners and losers will grow in size, as your account size grows,
by using money management and always trading a set percentage of the intire account balance,
we will accomplish this effect, using variable lot sizing according to risk management.
As a beginner you should never ever I repeat EVER!
Trade more than 1% of your intire account, you might think this is small?
it is, but it ensures that you have enough money left on your account even if you get a row of losers.
Note that even if you have a 70% winrate on your trading method.
it IS technically possible that you can get all the remaining 30% losses in a row.
sometimes probability works in mysterious ways.
unlikely, but definitely possible. or a least a lot of them in a row,
believe me, things like this will happen to you somewhere down the line.
you just never knows when it will happen. and if you are over trading at the time, your'e done trading,
and you'll wipe out your account.
If you have one trade open at 1% of your account,
you are NOT allowed to open another position until your current trade
is either closed, or you moved your stop loss to brake even.
Learn money management and how to calculate your lot size.
this is a key thing you must learn, there are plenty of lot size calculators on the net if you are lazy.
and even lot size indicators you can install in Metatrader.
this is a well worth investment.
if you think this is difficult to calculate manually,
just get one of those indicators, they will calculate for you on the fly.
Or, you can simply do this.
On a 100 dollar account, trade 1 micro,
200 = 2 micro's
300 = 3 micro's
400 = 4 micro's
1000 = 1 mini lot (10000 units)
2000 = 2 mini lots (20000 units)
10000 = 1 full lot (100 000 units)
etc etc.
This will keep you well inside safe sizes.
and you can't get more easy than that.
Your capital is your tools, simular to a carpenters tools.
without them, he cannot do his job, and wihout your capital,you are done trading.
so protecting your capital is a traders highest priority. always use a stop loss.
and always manage your trade with moving your stop loss closer to entry as the trade goes in your favour.
As time goes by, if you have a winning system the leverage will work in your favour..
and your account will grow rapidly. even with this small amount traded,
you would be suppriced how fast it can go. but please don't jump the gun.
Make sure you have a winning system before you start trading live,
when you become good at trading you can use 2% maximum 5%.
As a beginner, high leverage is not your friend,
it might be a good idea to lower your leverage when you first strarted out.
this will protect your capital for comon newbe misstakes,
because leverage goes both ways, it can either make more money for you,
or it can hurt your account more if it goes against you.
I strongly suggest you trade with maximum 50 to 1 in the begining.
talk to your broker, he will be able to help you with this.
High leverage allows you to buy more units on a small margin.
and if you over trade, this will be your doom.
It can also mean riches to be enjoyed if used correctly.
always trade according to your trading plan,
everybody can train them selves to be disciplined.
Update 5: Don't get caught in the Squirrel wheel
This is a phenomenom that can happen to new traders as they are testing out
trading system after trading system and keeps coming back to the same old result.
When you are testing a new trading system, maybe you found it online or maybe you bought it.
maybe you came up with it your self.
you then test it out for about 20 trades live in the markets,
you get 10 losses in a row and you treat the system as a losing system,
you think to your self, this system is compleate garbage!
then you ditch the system and goes on to find the next holy grail.
This goes on and on and on like a squirrel wheel.
Stop right there! you cannot judge a trading system based on just 20 trades, or 100 trades. or even 500 trades.
Probability take a long time before leveling out, what do I mean by that?
well, take a coin and flip it, take a guess on heads every time,
how many times do you think you have to flip it to get to 50% heads?
20? 50? 400?
The answer is close to 1000 times.
so if you ditch each system just based on a few losses you will never find a winning trading system.
take your time with them, and test them prooperly.
1000 trials gives a reliable number.
Thanks everyone for the feedback
it's Apprechiated
Good luck!
Bulls are stupid Animals!especially when Im short!
