I have been struggling with forex (as you can tell with all my previous posts).
BUT
I networked with a full-time trader last month and he told me the lot size he’s trading and his daily monetary value target. Long story short, I worked it out that if my trades were the same lot size as his I would be making bank!
This got me thinking:
Maybe I’m holding my trades too long only to see it revert… How many pips on average do you professional (or profitable) traders typically get in a profitable trade? This may have been where I’m going wrong…
scalpers = 1- 50 pips
swingers = 100-500
long term trader = 1000-anything
dont count pips. dont count money. just leave when you “feel scared” for your profits. but have a minimum take profit of 1:1 after that you can choose when to close but never close before. that could be a tactic for you.
or you have a fixed r/r ratio where you put a stop loss of lets say 50 pips and you never take profit below 100 pips (r/r = 1:2). its completely up to you.
the important part is that you cut losses short and let profits run. what to expect from each trade and where it could go is a thing that comes solely with experience. there is no formular to calculate how far a trebd will last and how long you can ride it.
anyways. theres a lot more that you can consider besides what i wrote, but im a bit lazy to write down everything you could do. but you can check it out in the school or in this thread for more detailed answares:
Don’t try to trade the same lot sizes as your friend, unless you have very deep pockets.
If you lose money trading small, you will only magnify these losses by trading big
This is actually very poor advice, especially for a relatively inexperienced trader. Psychological research indicates we are wired to be scared of losing what we have - a.k.a. cutting winners short. This sort of thing can be overcome, but it takes experience and/or a rigid system.
I’m saying this based on both the literature I read during my PhD, and also my own research findings.
IDK I think I’m going to side w/ TURBO here, b/c I know exactly what he’s getting at.
There’s something peculiar that happens, especially when scalping, when you’re watching your charts and you get this feeling in your gut that you need to get out, but you don’t. You sit there, and you watch your position retrace and the market comes back down to your entry point and eventually you puke out.
Not knocking your research or literature you’ve read, but this to me is similar to a conversation being held between a CO and an NCO (US Military leaders). A commissioned officer typically goes to college, gets a degree and learns in books about war and strategies and how to lead. A NCO is an enlistee who has been deployed 3,4, 5 times to war-zones and has been in the trenches fighting the enemy head-on. They are in a position to lead other enlisted soldiers, but, aren’t commissioned.
One is battle-tested, the other is book-tested.
There is a “feeling”, and 9 times out of 10 (personally speaking) if I listen to that feeling while trading, I’m shutting down my computer @ the end of the day happy with some profits. When I don’t “listen”, I’m laying awake @ night saying “I should have listened”. That feeling is snap judgements made @ the subconscious level before your brain can process and interfere. It can be developed over time to recognize patterns that are beneficial or negative to your current market bias/positioning.
Not 100% sure on your trading background, just going off what I see here.
Jake
You’re pretty much making my point. Presumably, you’ve been watching your charts day-in and day-out for some time, just like the NCO has been doing it (whatever it is) for a while. If experience is giving you a gut feel, then you should listen to it. If you’re a newbie trader you don’t have a gut feel yet. It’s a gut guess.
Not 100% sure on your trading background, just going off what I see here.
My trading background is getting up toward 30 years now. I started in the markets (stocks then) post Crash of '87.
yes you are completely right and i agree. telling a new trader to get out when hes scared makes him go out immediately after seeing brake even. the sentence alone is a poor advice to a new trader. therefore i added in the next sentence that he must not take profits before he has a 1:1 ratio minimum. after that he can do what he wants and let them run and take profits when he feels scared for his profits.
if somebody would have said that to me in my beginning it would have spared me a lot of headeck trying to find points where to take profits. running after fixed ratios and seeing the profits melt away because the predefined TP did not get hit by 2-5 points and you close the trade at break even is a real game killer for new traders. then they start questioning themselves and their entire way of trading.
someone once said “you cabt get broke taking a profit” and thats especially true for new traders as that gives them the time to build up experience and in future have the “gut feeling” to know where to take profits. in my opinion for a new trader itis most important to stay allive and not get broke. noone makes profits in the beginnibg but the people who succed are either:
the people who have a lot of spare capital to finance even big losses
the people who manage to make as few mistakes as possible and therefore have the necesarry time to learn
and a taken profit is a huge boost to a new traders motivation while a taken loss is a huge downer for a new trader.
in the end the trader must learn to stay in his position as long as possible. if you managed to have 10 trades you took at smsll profits or closed at brake even you are psychologically more able to have the 11th trade run long and go deep into profits than when you had 10 loosing trades and you are scared for your account and close the profitable trade too soon.
in babypips its stressed out to have a market timing. money management is stressed out a lot. trading plan is stressed out a lot. win ratios, statistics, analysis is stressed out a lot. but one thing which is just as important or maybe even more important that every trader needs is position/trade management. what to do after youre in a position or more positions. thats the really tricky part. analysis takes time. to enter a position takes a second but to manage the position well so it can become a big winner is what sucessfull traders do 99% of their time.
Wonderful post, Turbo… Are you on Babypips to escape from your wife’s family visit? Haha
I will make my fiftieth (FreeFX) video all about my long-term trades , hopefully if I survive the Brexit vote and I will be able to take my long-term trades forward: the video will focus on managing long-term trades, and the psychology of risk-management over significant time, drawdowns, and fearfulness.
your post is a perfect example of someone who managed to have enough time to develop hinself into trading as a fiel/front officer and later on, while or after, beeing deployed on the warzone (several times) to read books and educate himself in the strategic way aswell. this way beeing a great leader to his troops by knowing what they are going through and to be a great strategist in the bigger picture. to be a good trader you either need field experience by beeing on the front several times or you need theory/book experience to know the bigger picture. but to be a fantstic trader you need both, book and front experience.
it reminded me of a person who had both, front/warzone and book/knowledge and after his death not too few people said he was one of the best generals and leader in human history;
by the way, cant wait to see your 50th video and im sure youll survive brexit as i know how wide your pip span can be. in the end it will all turn into smoke. uk stays in eu and nothibg changed and we will all be laughing what a big fuzz this all was and how unnecesarry it all was
My head agrees with what you said 100%! My heart knows that it should listen to the head
Glad that you are free again… Time to relax and prepare for the week ahead!!
I did a music examination with three pupils and had an ice cream in the rare Scottish sunshine…Now off to buy nappies, for that is my nickname, PipMyNappy haha
I fear that the markets have already discounted Brexit, but implied FX volatility for the next two weeks I think is about 50% for the Pound, which is the level we saw all the way back in 2008 - and never since… Thus there really is a distinct risk of capital flooding out of Pound-based assets, and of any other asset that is globally connected to the repercussions of a Brexit outcome…
Between you and me (and anyone else glancing at the page) I think you’re probably more likely to survive it, in the long term, than David Cameron is … :57:
So would you guys n gals say that our trading systems and methodology goes out of the window this week and that we had better have the week off and sit on the sidelines. Or should we do our normal thing (at least at the beginning of the week) and see how things develop ?
Absolutely, it’s going to be a strange week. If you usually trade Gbp pairs and, to a lesser extent, Eur pairs, you’ll see spreads widen and margin requirements change. There could be some big swings as volume is likely to drop as we get closer.
If I can leave a trade running with some profit locked in, I might do that. Otherwise I’ll close
i booked wednesday till friday in switzerland. simoly knowing that i dont want to touch markets in uncertain times im going to do absolutely nothing. not even watching news. the positions that are open stay open and on friday evening ill see what exactly happened.
