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one impulsive trade can wipe out weeks of profit Replied 6 months ago - The urge to trade at random is one of the biggest undoing of losing forex traders. The urge can be overwhelming if not properly managed. You see, trading drains you mentally so you should not trade several times in a day, if not the tendency to make a mistake becomes higher. One mistake can wipe out all your gains. Some people trade only in the mornings, some only in the afternoon, some only at night. You must have specific trading hours, you cant be looking at charts the whole day. To help manage the urge of randomly trading, use a demo account if you must test strategies and close your system and take a walk or engage in other activity once you feel the need to engage in a random trade.
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Never Risk More Than 2% of your Account Balance On A Trade Replied 6 months ago - I totally agree! Especially if you are a beginner trader this rule is a must follow. Even if you lose a trade, there will always be another trade so the important thing is capital preservation to be able to take advantage of the next trade. You know how its gonna hurt if after you blow your account, you then see a good trade but dont have the money to take it? Trading is about checks & balances without which one cannot be cnsistently profitable.
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what is stop out level & why does it matter in trading Replied 6 months ago - Glad to hear so many perspectives of what stop out level means
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20 pip xauusd loss, how do i recover from it? Replied 6 months ago - Register your loss in your trading journal, take a step back and study why you lost. Come back after some days but reduce your lot size this time (maybe 0.01). Use a 1:1 risk to reward ratio to lock in small profits till you get your confidence back then you can go for bigger lot sizes and higher rr ratio trades.
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how will i know if i'm a profitable trader Replied 6 months ago - You will have consistency, you wont make $10 today then lose $150 tomorrow, your losses will always be around the same figure. Your profits will also be around the same figure but they will ususally be higher than your losses when summed up.
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whats the implication of increasing my leverage in forex? Replied 6 months ago - Whenever you enter a trade, you have a fixed point that you have already decided that if the price goes past that level, then you are out. That is your SL. But when you are in a trade, most often, you will know within 15-20 minutes if the trade is working or not. It is up to you at that point to take the loss & kill the trade early. So, in that case rather than let's say your initial 10 pips SL, you will be out early with a smaller loss. To give you an example, yesterday, I was pre-emptively short on Franky after the first opposite bar, even though it did not break the last bar's low. I thought that it would fall back into the Asian range, give a false break of the 1252 level. My stop was at 62, entry was at 54. But for the next 30 minutes, the price was not breaking the low, and still holding above 52. And my entry was always hovering around BE or a minor loss. And the London was opening. In such cases, you know that the initial reason for your entry is invalidated. Because if it was a fake, you want a quick reversal. But it was just holding above, not able to break the lows. In this case, you would not wait for it to hit your 8 pips SL, you get out as soon as you know that the trade is not working out as anticipated. In this case my loss was around 5 pips. There is always a possibility that by cutting it early you are intervening too much. But it comes from experience. For a new trader, my suggestion is to place your SL at a point where you know definitely that reason for your trade is invalidated, and then let it hit.
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How much should I start with to trade forex in South Africa without overexposing myself? Replied 6 months ago - R50 is okay to start trading with but keep your lot sizes at 0.01 for each trade so you dont blow your account quickly. Also set a tight stop loss for each trade and avoid the temptation to adjust the stop loss to accomodate more losses. if you make a loss, do not try to recover it that day, wait till the next day.
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what do the 1% successful traders do differently from the 99% unsuccessful ones? Replied 6 months ago - They also cut their losses early, they don't allow losses to grow while hoping the situation will turn around. This is why its important to use a low spread forex broker so that even if you close a trade seconds after opening it, the spread that will be deducted will not be too much.
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when should i exit a losing position to cut my losses early? Replied 6 months ago - You should not hold a position if the original reason based on which you had entered has been invalidated. Meaning, you should only keep a position if it is going as you had expected it to go. If it is not, you should try to cut your loss quickly, or just take a small loss. Never ever take any loss or drawdown that you cannot recover from. Small losses never hurt, it is turning small loss into big ones that hurt, either by pushing back (not accepting the loss), or giving a bad position more leeway to eat into your equity (not accepting the loss). You have to learn to take small losses. But I'll also add that a lot depends on how you trade, for someone few minutes may be too late, for some few hours or days. But the point remains, never take a big loss. You can very easily recover from a single losing trade or a small drawdown. But once it starts to get bigger, it can take months to get back to the point, if at all.
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is a margin call an actual phone call or just a push notification from your broker? Replied 6 months ago - In the old days, margin call was an actual telephone call because they were no push notifications or modern electronic gadgets with SMS. Today a margin call no longer comes as a telephone call (except you are a VIP customer trading millions💵 ); for regular traders, it can come as a text message or a push notification from your brokers mobile trading app. This is why you need to download your brokers mobile app so you dont miss margin call notifications.
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i want to trade forex but i'm scared of losing my money, any advice? Replied 6 months ago - Dont be afraid, the best loser wins ! How you handle losses will determine how successful you will become as a trader, you dont have to be a sore loser instead cut your losses early then learn from your mistakes. Theres no shame in losing.
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I lost a trade due to internet downtime, would a forex vps have prevented this? Replied 6 months ago - sorry about your loss, I think take profit targets should be realistic and not based on greed 🤣but i feel you though. As for forex vps i have not used one before but i understand its for hosting trading robots and not for manual trading. I may be wrong and stand to be corrected.
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whats the most important part of forex trading? Replied 7 months ago - I think it is sub-consciously related to the fear of missing out. If you miss out on a trade that you then see you would have been right had you taken it, this creates even more bad behavior. You need to develop a state, where you are able to trade without fear or hesitation (I think Mark Douglas said it). And I've overtime found it to be very true. Fear of being wrong, fear of missing out, fear of your winner turning into a loser & so on. You want to be able to trade without any of these fears. So, every trade is just a trade, and you are not expecting anything out of it, other than an outcome, which will be a win or a loss. You don't know what it will be for any particular trade. Your job as a trader is to execute based on your set of rules without expecting anything from a trade. In order to do develop the right habits a. start by creating very rigid set of entry & exit rules, follow them exactly as they are. Even if you believe sub-consciously that this trade might be a loser, but your rules say to enter, you must do it. b. Take the next 20 trades exactly as per those set of rules. If you find yourself just wandering & breaking the rules, start again. For most traders, 20 trades will re-enforce the discipline to do that same thing over & over.
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forex influencers claim to trade $1m account size, is this possible? Replied 7 months ago - You will notice that these online forex gurus who claim to trade 1 million dollar account size even do so with unknown forex brokers and not the tier-1 forex brokers which is suspect. I do not think there is any forex broker that can accept as much as 1 million dollars from a forex guru and let him trade and they issue payouts, they do not have such liquidity. Anyone that wants to trade with up to $1m has to pass through the banks and bigger liquidity providers like oil companies or hedge funds; and not forex brokers. So this is how you know that it is fake when online gurus display $1m as their account trading account balance.
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should i take profits early when trading forex? Replied 7 months ago - I dont think taking profits early is a good idea in the long term. I mean it may seem like a good idea/quick fix in the short term, but it will hurt your overall profitability in the long term. In trading to become profitable over the long term, your profits have to exceed your losses. If you exit with profit early and also cut your losses early then you will only break even and will neither be profitable or unprofitable. And studies have shown that if you take say 10 trades you are probably going to lose around 6 of them, so this is why for the trades you win you must let the profits run to cover the losses you sustained from the other 6 trades.
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Why is My Stop Loss Triggered Without Price getting To It? Replied 7 months ago - always set your charts to show bid price and ask price lines. If you are short it means you entered at the bid price and will have to exit at the ask price. This means when the ask price line (the upper of the two lines in the image) reaches your stop loss it will be triggered. If you were long it means when the bid price (the lower of the two lines in the image) reaches your stop loss it will be triggered.
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the less you trade, the more you make; can anyone relate to this? Replied 8 months ago - online trading is one area where doing it more does not mean you will make more money. In fact doing trading more will result to more losses because trading is about probability. There's always going to be times when the market will move against you or you make a wrong decision; so the more you trade the higher the probability that you will make a mistake.
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How to calculate risk management in forex Replied 8 months ago - One way is to use a Risk to Reward (RR) ratio. RR = (Stop Loss Amount/Take Profit Amount) If you set your stop loss such that you will only lose $10 if the market doesn't favor you, and you set your Take Profit such that you will gain $60 if the market favors you, then your RR ratio becomes ($10/$60) = 1:6 or 0.1. This means you are risking $1 to get $6. An RR ratio below 1.0 is considered safe so from the above example our RR was 0.1 which is safe. Many people consider 1:2 as the ideal RR ratio and some will argue that an RR of 1:6 is greedy but it depends on your risk tolerance. An RR ratio from 1.0 and above, is considered high risk and unsafe because you will be risking more to get less; which does not make a good business sense.
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How do you manage risk when trading forex? Replied 9 months ago - To manage risk I always use a stop loss in calm markets and a trailing stop loss in fast paced markets (aka volatile markets). During volatile markets, I remove any excess money from my trading account and leave just the amount needed for a trade because sometimes stop looses can fail to trigger at the right price. I also make sure I have the brokers mobile app on standby because sometimes your MetaTrader desktop can freeze and lock you out of the trade and when that happens you can continue monitoring the trade from the mobile app.
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How To Use Trailing Stop Loss Replied 9 months ago - Before I set my trailing stop, I will first of all set a normal stop loss because trailing stops only get activated when you start making profit. So setting a normal stop loss will protect you from immediate price reversals. After I set my normal stop loss, I right click on the stop loss line on the charts and select trailing stop. I then set the number of points or pips of profit that I want the trailing stop loss to secure. If I select 5 points, then when price moves 5 points in my favor the trailing stop automatically adjusts itself by 5 points. When price moves another 5 points in my favor, the trailing stop adjusts again by 5 points. It keeps doing this till price starts reversing and hits the trailing stop then it will close me out of the market with profit.
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