[Simple Trading System] Trendline Break (The Only System You Need)

[desifxtrader]

Re: Swing Calls by desifxtrader

Euro has brake out of the trend line, can it be a short.

I'll wait 4H candle to close

 

[desifxtrader]

Usdx

Getting ready for a Breakout??

 

[fxgood]

Re: Forex Trading: An Introduction for Newbies and

hehe google is more brainy than rest of us, any thanks for your efforts!!

 

[desifxtrader]

Us$/

Prior shorting this, I'd wait for reversal signs with SL of 50/60 pips.

Lets see if the bulls are still going strong today or ...

... also, since today is Friday, it would not be surprising to witness a sleepy mood :lol:

 

[scplindia]

Re: Swing Calls by desifxtrader

Euro has once again fallen with respect to dollar, any comments

 

[desifxtrader]

Euro has once again fallen with respect to dollar, any comments

Hi scplindia,

I'm not sure which TF charts you're referring. On a macro scale, I didn't notice anything new in € for past couple of days except a formation of nice triangle and increase of volatility (major explosion ahead ??).

If we zoom in, yesterday it fell from a high of 2326 to 2151. Nothing new here only that the 2100 (2140) level is still acting as good S. Old S&R levels are still good.


EUR 4H

<<old S level still holding>>

 

[scplindia]

Re: Swing Calls by desifxtrader

Euro has fallen from the neck line of H& S pattern, have you noticed it. The cuts has become deaper, this is not good news for Euro.

 

[scplindia]

Re: Swing Calls by desifxtrader

http://img267.imageshack.us/img267/5683/euro.gif

Check the chart of euro / usd

 

[scplindia]

Re: Swing Calls by desifxtrader

http://img267.imageshack.us/img267/5683/euro.gif

Sorry duplicated, was trying to upload image, failed, how to do it.

 

[desifxtrader]

[FOREX] Margin and Leverage

Some more info ...

Emotional involvement is directly proportional to leverage and to the amount of importance one attaches to the trade at hand.

I suggest if you don't have a micro account or smaller, that you get one - fxsol / oanda or marketiva are excellent choices. they provides micro lots, and offers even finer granularity. Once you have such an account, I recommend you start by trading a single micro lot. This will yield a pip value of 10 cents or less. Even if you have a 100 pip drawdown, that will only be a $10 loss. This is easily handled emotionally. Once you are able to show a profit after 20 trades, then increase it to 2 micro lots. Continue to increase your trade size every 20 trades as long as you are remaining profitable until you reach the maximum trade size allowed under your money management system.

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Individual trades are essentially meaningless. It is only a series of trades placed by consistently following the rules of your system that has any significant meaning. Trade to trade well, not to make money. By trading well I mean for each trade you place, as long as you follow the rules of your system exactly the same each time, then it is a trade well made. Whether the trade wins or loses is irrelevant. Remember the secret is in series not singles.

If you have less than $30,000 in your account, then you should only trade micro lots or smaller. The reason for this is a thing called asymmetrical leverage. Believe it or not, you'll actually make more money with a small account trading micros than minis because you have finer control over your position sizes.

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For leverage, take the highest your broker offers. If they offer 400:1 take that. You won't be using that much leverage; you only want it that high to reduce your margin requirements. The leverage your broker gives you has nothing to do with the leverage you trade at. The leverage you trade at is your position size divided by your account size. As an absolute beginner, keep it at 1:1 or less when you first start out, then gradually increase it over time to no more than 5:1. This is all the leverage you need.

As a beginner, your objective at this time is NOT to make money. Your objective is to learn to trade. To do that you have to stay in the game by preserving your capital. Low leverage trades will allow you to do that.

So, start with a demo account and when your system proves itself to you and you feel "ready" to trade for real, i would suggest a trading with very small or micro lots (REAL MONEY !) considerably under your normal money management risk. This will expose your weaknesses in trading real money and help you overcome them and still stay in the game. It is kinda like a "demo" of your trading psychology, how you react with your system....and you won't lose your whole stake, and will learn a whole lot. Size increases with demonstrated confidence.

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When i started a year ago. I thought people were crazy for trading on such high time frames ... 1hr, 4hr, or daily. But I to has moved to the daily and switch down for a better entry. My stress level has greatly reduced. Not to mention how I look at the trades too.

For me risk per trade is most important. I determine my risk first before any trade. Since my stops depend on highs or lows of previous candles, I limit my risk per trade to 3% of my account. That give me at least a 100 pip stop. As the trade moves in my favor, I can add more to the table but locking profit along the way. If I can't handle a certain stop, I don't take the trade ... it's that simple ... I move on and find another pair with less risk for me.

On a similar note what do you all think about demo accounts? I think trading a demo account is great to not risk ANY money at all but if you don't have the feeling of putting money at risk do you really learn anything because as soon as you do start to trade for money you'll find it a different thing entirely!

I never traded a demo account but always kept my trades very small while I was learning (still learn something every day) but as I gained confidence i just slowly increased my pip size.

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Pip spread/SL + TP ratio, mm, pyschology, broker, and trading system are all vital.

Lets face it...say you are trading the euro with a 2 pip spread. TP = 50 and SL = 50. Your odds of winning are 48/100 or 48%. The chance of you losing is 52%. Thus...on average you are losing 4% of all of the money that you risk. Your trading system must be good enough to overcome that 4% deficit. Hence...you must have a good trading system. If your Broker is a cheat....your odds are even tougher. And there are many ways they can cheat you......unfair swap...stop loss hunting...spread widening...slippage...I could go on and on.

My thinking is...keep the trading system as simple as possible....keep your pip spread/SL +TP ratio as low as possible. Find a system with an edge because you must have an edge or the odds will defeat you. 4hr or daily candles for instance would allow for you to use larger SL and tp levels....thereby reducing SOME of the edge against you. Find the fairest broker you can.

I've played craps many times at the casino. You can win sometimes....but it is tough to be a winner overall. If you play the game the smartest way possible...you can reduce the casino's odds to just under 1%. Thats better than the 4% above with a flip of the coin type of system.

So with forex....you need to have a good enough long term system to overcome the 4%+ advantage that is against most systems in Forex.

Sometimes a system stops working because market conditions change. Are we good enough to all know when that is? Should we change as the markets change? Or...just stick with a system that we believe in come hell or high water?

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