[QUOTE=“Kevin LaCoste;637194”]<img src=“301 Moved Permanently”/> According to OANDA, the vast majority of retail traders are short on the GPBUSD. As we all know, most retail traders lose money. So I would be looking for longs.[/QUOTE]
I would also like to note, in support of my statement, that:
the last time the market represented a major oversold price data was in 2007-2008
As of now, when you look at longer time frames of GBPUSD, you will notice how the market has been over bought, hence MUCH more people are buying than selling within the current market today.
On the Commodities Futures and forex charts, represents 3 main groups. The main group I would like you to fixate in is Speculators, represented by the red lining (hence your argument for retail traders). The divisor represents midpoint or zero line. Figures above represent buying power, figures below represent selling power. The majority of retail traders seem to have been on the buying side for quite awhile. Awhile being 9 months.
I am a bit reluctant to accept OANDA’s data that you have presented me. I am unsure what time frame is being displayed, and I understand that there are months and days, but of what year? Assuming that you are speaking of this year, there are pieces of evidence discrediting the validity of the chart. If in 2007-2008, then data is reasonable.
Also, Teslein, with regard to working full-time (not as a trader) and then trading after work, here are some
thoughts from FX-Honorary Woman PipNRoll, and my reply to her question:
I notice that your trade size is 200k. To get the most out of your demo trading, it’s good to use trade sizes that will be appropriate for the amount you intend to deposit when you begin live trading.
As a general rule of thumb, I think it’s good to try not to exceed 10:1 effective leverage. That means having at least $20,000 in the account for a 200k trade size.
Another important risk management guideline is to limit risk per trade to 2% of account equity. With $20,000 in the account, that would mean risking up to $400 per trade. With a 200k trade, the risk is approximately $20 per pip. That means the ability to risk up to 20 pips on a 200k trade in a $20,000 account.
Unless, someone’s using a very short term scalping strategy, that’s not a lot of pips. If someone wanted to risk 200 pips on a medium term trade, they could place a 20k trade (instead of 200k) and risk $2 per pip (instead of $20). A trader with $20,000 in equity could have 10 such trades open in different currency pairs of 20k each. The total account exposure would be 200k which would be within the 10:1 effective leverage guidelines.
[QUOTE=“Jason Rogers;637676”] Hi Teslein, I notice that your trade size is 200k. To get the most out of your demo trading, it’s good to use trade sizes that will be appropriate for the amount you intend to deposit when you begin live trading. As a general rule of thumb, I think it’s good to try not to exceed 10:1 effective leverage. That means having at least $20,000 in the account for a 200k trade size. Another important risk management guideline is to limit risk per trade to 2% of account equity. With $20,000 in the account, that would mean risking up to $400 per trade. With a 200k trade, the risk is approximately $20 per pip. That means the ability to risk up to 20 pips on a 200k trade in a $20,000 account. Unless, someone’s using a very short term scalping strategy, that’s not a lot of pips. If someone wanted to risk 200 pips on a medium term trade, they could place a 20k trade (instead of 200k) and risk $2 per pip (instead of $20). A trader with $20,000 in equity could have 10 such trades open in different currency pairs of 20k each. The total account exposure would be 200k which would be within the 10:1 effective leverage guidelines.[/QUOTE]
Jason, you’re awesome! Great advise (one of the many reasons why I trade Live with FXCM)