Hi all,
[B][U]First, let me intro about myself[/U][/B]
I’m a stingy Singaporean and also a Private Trading Tutor (teaching is just my hobby, I do not make money out of it.). I’m not high educated, if you know Singapore’s education system, I’m a normal technical student with GCE N(t) Level and my highest qualification is NITEC in Electronics from the ITE.
I got at least a passed for my examination but the grades are poor cuz I always skip school to do my own stuff, don’t like to study and didn’t hand up my homework during my secondary school days.
Then I decide to work hard a bit for my NITEC and got flying colours.
I’m not clever with an low IQ of 80 points but I’m logical sense exceeded average human and thank the holy that trading is more about logical sense.
In life, you will always be compensated with something when you lacked of another stuff, make good use of your main talent and the stuff that you have little will play the role of supporting your main.
Keep grudging on your lacked doesn’t help at all, being stress doesn’t help at all, so please throw them away.
Please bear with my grammar and vocabulary mistakes, I’m sorry and thanks a lot!
I started to learn trading myself 4yrs ago, making consistent profit 3yrs ago and able to see the market clearly when I woke up 1day last year (just happened Blink Blink so sudden, I cant explain why.).
I trade Stocks, Futures, Forex, Commodities and strongly encourage people [B]NOT[/B] to trade Binary Options.
How do I trade? I’m a full TA trader who pick tops and bottoms, doesn’t mean I do range bound only. Day, Swing, Position trading is not a problem for me (You don’t need to believe me.).
Why am I stingy? I don’t go for paid courses cuz I believe I can be successful learning myself.
I read cartons of books from libraries cuz it’s FREE, I attend free seminars cuz it’s FREE, I do tons of research online cuz it’s FREE and I don’t trade with real money until I get consistent profit from demo acc cuz it’s FREE.
I spent lots of time (LOTS~) going big big rounds learning different stuff, trying out my different kinds of funny funny stuff that never make me money (like lucky buy lucky sell which made me laugh at myself whenever I think about it now) till I stopped and realized I should master things and I mastered stuff 1 by 1.
Some strategies or tools can be done purely on its own and some you have to be combined. Now I can trade both during range bound and trending days as long the market move.
Having a combination is the best due different people uses different strategy. The more people use that particular strategy the more it’s going to win.
Eg. 60% of bears is going to short at the R1 the standard pivot calculated then the 40% of bulls are going to lose for sure cuz the 20% remaining bears which haven’t got their tickets are going to push the price down from R1 .
Price don’t move because of done orders, instead it move due to the people have to lower or higher their price in order to find willing buyers or sellers. Basically, when you have too many stocks on hand and no one wants to buy, you automatically have to lower your price to attract buyers and when you want to buy stock but no one wants to sell, you will have to bid at higher price. You can google to read up about order flow.
Thru my trading journey, I found out that understanding how the proper use of indicators, strategies, risk and money management, psychology and having experience are so so important but people don’t actually teach you the full function of it and most of the time trying to make things easy for you to get buy or sell signals. When things failed, traders will skip to another funny stuff again and so on.
I will cover all you need to know about trading except for extra knowledge like how many trillions being traded a day (go to Babypips’s School and read up, know what you’re doing = adding odds to your favor.
Babypips is like a million dollar website and yet provide free education for you. Don’t be lazy… Don’t waste free stuff…). The only stuff lacked in Babypips is they didn’t actually explain everything in detail on each of their topics.
This guide will be updated slowly and whenever I’m free. Will try to make things fixed and clear even for stuff that can only be verbally explained.
In my theory, all fanciful strategies are created to find Demand & Supply zones in the market by look at the chart (you can learn about it from Alfonso Moreno from Online Trading Academy @ forexfactory forum.).
Combination of different indicator is going to put odds in your favor, wash away noises and give you quality trades. Some might say it’s messy with so many indicators and rules but Nehh… I can combine 4 indicators and have simple set of rules to follow.
[B][U]Definition of risk on gambling and risk on business are different.[/U][/B]
[B]Risk on gambling[/B] = Simply place your money on the table and hoping your luck is good. In terms of gambling in the market means putting in orders without knowing what you’re doing or breaking your plan.
If a person know what he’s doing and not depend on luck to win in a casino (eg. Counting cards & memorizing cards), he is not gambling.
[B]Not gambling with financial instrument[/B] = In trading, you should [B]101%[/B] not think about being lucky or not cuz you are not the only one being stopped out at that level. If you ever thought about being unlucky due to your trade being stopped out by 1 pip, you are gambling.
Trust your analysis and if it always fail, means you’re either lacked of experience, did not master your stuff well enough or using stuff the wrong way.
Lots people lose money due to psychology issue of always thinking about earning or fear losing and forgot they need the knowledge to help them.
Learn your stuff well and do your math, math is going to save you during your inexperience journey and might still earn you a bit of money. This is why I still make profits even before being able to see the market clearly.
[B][U]The different between physical shop and trading business[/U][/B]
You all know that trading don’t hold physical stocks but shop does and they need to spend money to promote in order to sell their goods. We traders do not need to promote in the market.
Promoting in the market meaning your rules of TA did not confirm and yet you jump in a trade also = Gambling.
We don’t want unwanted risks, we always aim for the highest odds, so follow your plan even if you need 10 indicators to confirm a trade.
Crazy people who need 10 indicators to confirm are the ones who risk huge amount on that particular trade cuz they believe more than 95% they will profit from it.
I will educate you with strategies that I would recommend new traders to learn cuz it’s easy to handle and master. If you only want to trade with clean & clear charts, you might want to learn Demand & Supply from Alfonso Moreno @ Supply and demand in a nutshell by Alfonso Moreno @ Forex Factory
You must know that every risky stuff has at least one proper solution to handle it even doing one of the most dangerous way which is sizing the Martingale’s ways. Trading will not make you bankrupt unless you trade without have the capital you need.
Eg. In Singapore, when you buy a stock, you will have to pay your broker within 3 days if not, what you bought will automatically be sold back to the market.
If profit, it will be given to you but if loss, you will have to pay or else your broker is going to sue you till you bankrupt.
People who had done this way are gamblers without money, hoping the stock price will move up and give them profit and got busted.
How fast do you think a stock price can move in 3 days? Or how much?
Many shop business went bankrupt because they are on consignment, owing suppliers physical stock’s money and during downtime, supplier will chase for debts. Shop owners who cannot pay up = Get sue by supplier = Bankrupt. Consignment is like borrowing money and don’t forget shop owners will have to pay their rental if not, close shop = cant earn money = cant pay debts = die.
Remember, as long you do not owe any debt, you will not go bankrupt and only invest with what you have. This way, your journey stress will only be not making any money but you don’t have to worry about paying up any debt.
If you are so that poor, go MacDonalds to work and save up cuz you can also start learn while saving. I do not believe humans with hands and legs can’t find a job. You simply can get a job and look for a better job to skip to.
[B]Please let me know if you have question or need to define something which I missed out[/B], answer will be updated to the section for sharing purposes. I tend to forget stuff cuz I absorbed too much but will be able to recall easily when I come across again. I will let you know when I updated.
[B][U]Let me start off with Risks and Money Management[/U][/B]
[B]Recommended amount to trade:[/B]
Forex = $3k cuz of high leverage
Futures = $50k cuz contract size are expensive
Stocks = Don’t buy stocks if you have little amount of money cuz it’s not going to let you earn your daily meal. How about penny stocks? Answer is No no no!
[B]Recommended leverage[/B]
As high as you can get from your broker
But Wait! Isn’t high leverage risky??
Nehhh… You will only use leverage for your margin purposes, not for you to over leverage.
How??
Margins are the money you have to maintain in your acc when you are in an open position. The higher leverage you have, the lesser margin you will have to maintain, more flexible when you are doing position sizing and you don’t have to worry margin call or being kicked out by broker.
1 Micro = 1k unit
1 Mini = 10k unit
1 Standard = 100k unit
Let’s say you have leverage of 1:1 and you want to get 1 standard lot. The margin you need to maintain in your account is:
100k unit / 1 leverage * current price on chart eg.(1.4000) = $140k
If your account’s equity goes below $140k, your broker will automatically get you out of the position.
Some brokers might offer you to maintain only 25% to 50% of the margin.
Eg. 25% - Meaning, you will get kicked out if your equity falls below $140k * 0.25 = $35k
And now for leverage of 1:100 and 1 standard lot, margin you need to maintain is:
100k unit / 100 leverage * current price eg.(1.4000) = $1.4k
If your account’s equity goes below $1.4k, your broker will automatically get you out of the position.
[B]Maintaining margin is your responsibility, not your brokers’![/B]
[B]How not to over leverage?[/B]
Eg. I funded my account with $3k
I’m in leverage of 1:400, the highest my broker can offer.
You need to calculate the maximum lot size you can enter:
$3k balance * 400 leverage = $1.2m
Standard = $1.2m / 100k = 12 standard lots
Mini = $1.2m / 10k = 120 mini lots
Micro = $1.2m / 1k = 1200 micro lots
These are just rough figures, dont forget you still got current price that will lower down your calculated maximum lot size.
And my dear friend, please do not trade up to 12 stand lots.
In order not to over leverage, you have to follow your risk amount per day per trade if you are doing DayTrading.
I use only [B]1% per trade for Swing (capped at 4 trades max = 4%, can only enter another after 1 closed[/B] and [B]2% per trade for Position[/B] cuz I dont get that many trades.
[B]So my total risk % wont go over 10% of my account.[/B]
For Swing & Position, I take only perfect setup.
For my Daytrading some times tend to be a bit wild, I standby up to 4% risks per day, normally I wont reach 4% (having standby is always good)
If you did not fully utilized your 4% today, [B]doesnt mean you can add on for tomorrow[/B].
Everyday is a fresh new day = everyday risk fresh new 4% only
So $3k * 0.04 = $120 maximum loss a day
You will have to recalculate your 4% everyday. (Use your Excel Spreadsheet)
If you do not have Microsoft office, then download a free office called ‘Apache OpenOffice’ google it. It function just like MS office.
Per day I know but how bout per trade?
It depends on your risk : reward ratios.
If your R:R is 1:2 then $120 / (1+2) = $40 per trade. Meaning you can enter up to 3 trades a day.
If your R:R is 1:3 then $120 / (1+3) = $30 per trade. Only 4 trades a day.
Once you fire off your bullets, that’s it for the day.
[B]Why calculate like this?[/B]
Reason being if your R:R is 1:2, out of 3 trades, 1 winning can breakeven your day.
3 win = $240 0 loss = -$0 day profited = $240 - $0 = $240
2 win = $160 1 loss = -$40 day profited = $160 - $40 = $120
1 win = $80 2 loss = -$80 day profited = $80 - $80 = $0
0 win = $0 3 loss = -$120 day lost = $0 - $120 = -$120
Meaning you only need to profit:
1 win / 3 trades = 0.33 = 33% of the time to breakeven
More than 33% = you are earning.
If your R:R is 1:3, you only need to win 1 out of 4 trades to breakeven = 25%
really interesting thread keep on 
