Thank you for your reply @justshell
Will take a note of that.
Seb.
Am really learning a lot here, am new but am already feeling belonged!!
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Yea, you learn a lot not just from the school, but from the forum convos as well lol Iām on here daily just scrolling through the posts
A closer look at the pinbarā¦
Revealsā¦
It was just a pull backā¦
Looking like an ABC Retracementā¦
Now at 3.14 or Piā¦ Will it reach the 3.168 and then come down for the Returnā¦?
Elliot wave followers can prob see a 1,2,3,4,5 Bullish Inpulse wave hereā¦
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It is a fibonacci yes.
There is a huge number of people claiming that indicators donāt work. What do you think about indicators @A1lenTrader ? And how would trade a pin bar?
Seb.
I think that thereās lots of different ways to trade Indicators, price action, supply demand, chart patterns etcā¦ But its a combination of a few things that will be best and being able to manage your money and risk properly when you take the trades.
You would not just see a pin bar and take a trade, you would look for some kind of confirmation for example the red and blue lines i put at top and bottom of pin bar if price breaks through then you could have gone long or if it broke the blue gone short but thatās pretty basic .
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Or letās say you use the macd indicator with the rsi indicator and take your trades when macd crosses and rsi meets a certain criteria thatās fine if it wins more times that loses. If you use say a R:R ratio of 1/3 so you risk Ā£10 to make Ā£30 then you could be wrong 7 times and right 3 times and still profit.
Really the best way is scan the markets for potential low risk high probability trades in which i mean a few different things are all lining up so say you have seen price is at a support / resistance area at a certain fibo level and momentum is starting to pick up and breaks the s/r level also your macd just crossed.
Iām not saying use these exactly but just as an idea of what Iām trying to say. Or you could keep it simple and just trade breakouts of certain areas.
Thank you for your reply @A1lenTrader
Thatās what poker is all about as well - minimising risk and maximising profits.
How you get risk to return ratio at 1:3? Do you apply a leverage?
Seb.
Leverage magnifies your buying power if i put 1000 into broker and they give me leverage of 1:500 i now have 500.000 to use instead of 1000.
Risk reward ratio = if i open a trade and say put a my stop loss at 10 pips at Ā£1 per pip Iām risking Ā£10 my take profit at 30 pips i make Ā£30. 1:3 R/R
So i either lose 10 or make 30
A 1:4 R/R ratio = i risk 1 to make 4 so i could put stop loss at say Ā£15 and take profit at Ā£60. So could lose 11 times win 3 and still be in profit.
Also remember if Iām using leverage Iām buying on margin so if i buy 1lot which is 100.000 with my leveraged money its either making say Ā£10 per pip or losing Ā£10 per pip if it goes against me so if it went against me 50 pips thatās Ā£500 and that is taken of my original 1000 capital not 500.000 leveraged and i would be left with Ā£500 and get a margin call (50%) if it carried on against me i get margin stop out at 20% and my trade would be closed.
So risk to reward ratio is determined by your stop los setting. You said that, to get 1:3 you would set stop at 10 pip and profit at 30 but then, itās a very tight setting. Iāve seen some videos of experienced traders and they say that, most people donāt make any money in forex cause of tight stop los. You get traded against by those āmarket makersā or āinstitutional tradersā donāt know how you call them.
Let say for argument that, you would set up your stop at 30 pip and take profit at 90. You still get 1:3 ratio and still have to be right only 3 times out of 10 but you kind of risk more as your stop is lower.
Leverage allows you to control a larger position which comes with a bigger risk but if you only risk a 1% on a single trade, should you be concerned about a margin call?
Have you tried āthe school of pipsologyā?
Thanks for you reply @Maximus_martins
I am reading a book as I said in my first post. Iāve planned to do the school of pipsology afterwards and a demo after that.
Seb.
Yeah the 10 pip 30 pip was just an example you could open a smaller lot size and set 20 pips etcā¦
If you have a bigger balance/capital you got more margin obviously.
So if you start with Ā£1000 your 1% is Ā£10 and that would be a 1 pip stop loss on 1 standard Lot of EUR/GBP say And 10pip SL on 0.10 Lot or 100 pip stop loss on a 0.01 lot
So bear that in mind when working out position sizeā¦
Hereās a useful link to work out how much each pip is worth for the different currency pairsā¦
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Whats your opinion on BDSwiss as a broker?