Hi!!! I’m an economics student living in Madrid. I have been dabbling in and out of forex since January, but now I have the entire summer to myself while I teach English so I plan to put some serious effort into my forex adventure hahaa
Anyways I have a serious question. I am designing a basic trading plan that I will apply money management to. RR ratio minimum 2:1, never risk more than 2% of the account, all those basic rules.
My Question: [B]I plan on trading on the 4h-1D-1W combo, mostly on the 1D because that seems to be best for learning candlestick patterns, and gives beginners lots of time to analyze graphs…
When I place a trade, say I have one running right now, I write it down in my journal, the best thing is NOT TO TOUCH IT until it either hits the S/L or the T/P that I set??? [/B]
Right?? Because to sucessfully analyze journal entries you have to figure out what you’re doing wrong so once you place your entries you basically go away and don’t come back until they’ve either triggered the S/L or T/P.
Is this a correct assumption? I hope that made sense. I want to know if I should be monitoring my trades and moving the S/L or should I do the analysis and then just let it run its course?
Thanks for your help this is important for journaling.
My Question: [B]I plan on trading on the 4h-1D-1W combo, mostly on the 1D because that seems to be best for learning candlestick patterns, and gives beginners lots of time to analyze graphs…
It will depend on the trading strategy on which time frames will best suit according to your needs. It would be better if you can use 2 time frames for compare and Analyse.
When I place a trade, say I have one running right now, I write it down in my journal, the best thing is NOT TO TOUCH IT until it either hits the S/L or the T/P that I set???
Right?? Because to sucessfully analyze journal entries you have to figure out what you’re doing wrong so once you place your entries you basically go away and don’t come back until they’ve either triggered the S/L or T/P.
[/B]
Theoretically you are right, but in practical you will need to Modify both the TP and SL according to the time of Entry into the markets
Is this a correct assumption? I hope that made sense. I want to know if I should be monitoring my trades and moving the S/L or should I do the analysis and then just let it run its course?
Good for a Demo account practice set up and learnings.
I would say that the best thing to do is to backtest it. Especially on the longer timeframes, you could sit for months on a demo account before you actually figure out an answer to your question. Backtesting can give you a good idea of what you should do in a few days.
On the first test, you could test what happens when you let it run to hit the TP or SL. On the next test, you could try out another exit method and compare the results.
The good news with longer timeframes is that they are faster to backtest. You could get through 10 years of data pretty quickly.
Of course that will not guarantee your success (nothing will) but it will give you a better idea of what you should do.
Firstly i would like to congratulate you on taking the right steps to successful trading.
I have a trading plan and i write in it every day. It’s how i interpret the market and what my entries are going to be. It contains all my set-ups im currently waiting to breakout. This is interpreted on my trading platform where i use colour codes to represent certain things like entries, support and resistance, swing highs and lows, plus charting formations.
You are doing everything right for starting off.
What the journal will do will give you a measurable outcome. Since you seem to be interpreting the market the same each time and writing it down you will have a measurable outcome. When things go bad you can pick up on things more quickly if you have a journal.
If you need help with trading psychology just go to my website i have written like 40,000 words on the subject.
Later if you trade like me you will never have your trades hit your stop loss. This is because you will become so good at reading prices action that you will be able to tell if things go bad. Another reason is that you want small losses and large wins in your trading account. A lot of traders will never get what im about to say but it is true. When the trade goes against you, remember you can always get out and get back in if it goes your way again. This is another method you might need to learn. Knowing how to get back into a trade once you have gotten out of it.
Let me tell you why your trade should never hit your stop loss. If your trading the AUDUSD and found a good entry point. You have a profit target of 480 pips and a stop loss of 240 pips. You shouldn’t have to wait until your stop loss is hit to get out of a trade. This is just being poor at price action reading. There will be major signs that the trade is moving against you before the stop loss is hit. That is why you should never have it hit your stop loss. But for now while you learn it is fine.