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Placing A TRADE

  • #21
  • Sep 17, 2016 9:33am Sep 17, 2016 9:33am
Quoting richdadeze
Thanks you all. Really this is a wonderful family. Let me here answer the last post, i beg to be forgiven if i answered it wrongly, just to test my brain and and see if i am really catching up with my learning. I think the issue of where to set the stop loss has to do with amount you are willing to risk. So it should be calculated on the basis of risk /reward ratio of 1 to 3, that is for every 30$ profit target, you set your stop loss at 10$. Can someone please tell me if i am correct.
Does your current strategy or trade decision on this trade allow for a 3 risk reward then if so, you are on the right track, for example I risk only 0.5% on my personal account and on my institutional funds, never any more than that. So if the balance is $50,000 then my risk on the SL being hit will be $250. Does not matter if the sl size is 5 pips or 500 pips, I adjust lot amount to match my risk depending on the size of sl in pips.

Example on a $50,000 using eurusd.

If sl size is 25 pips my lot size will be 1.00 lot.
If sl size is 250pips my lot size will be 0.10 lot.
if sl size is 165 pips my lot size will be 0.15 lot.
  • #22
  • Sep 19, 2016 2:12pm Sep 19, 2016 2:12pm
Hi friends, i have another question today. my question is what actually makes the market to move in a particular direction. If the trend is up, why is it moving up and if down why is it moving down. What is it that is forcing it to move in a particular direction. I think that one need to know instead of just buying or selling because your indicator says so. What actually makes the market to move.
  • #23
  • Last Post: Oct 20, 2016 6:49pm Oct 20, 2016 6:49pm
Quoting richdadeze
What are the things that one must look out for before placing a trade. If the market is moving up, what is causing it to move up and if downwards, why is it so, and hw will you know that if you enter, the market will not move against you.
First the market moves because people are buying and selling different currency pairs in the market simultaneously. Also certain events, news release or Central Bank Governor's speech also moves the market.

To know when to enter the market to place a trade, you need to have a strategy in place which tells you when to enter a BUY or SELL position, the profit you expect to make and your Stop Loss

As a newbie, you have alot to read. However, to make your learning faster, get a mentor and follow his/her tips/strategies
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