Hi
tonights my first attempt at a practice account. im on the EUR/CAD oanda model and the first thing ive noticed is when you go throught he various time frames , when you get right in there to the 1min , what you thought was a bullish trade really is bearish !
Anyway , ive gone bullsih . looked at the trend and it looks as if its trending up - ive put in a trailing stop plus 10 pips ,and so far - its giving 2 pips
( more luck than judgement) , but i need the practice
forex wales
My broker charges a 9 pip spread for the eur/cad. Ouch! I think most charge more for the cross curencies. One way I get around that is by buying or selling the majors to create my own cross. In this case one could buy equal dollar amounts of the eur/usd (2 pips with my broker) and usd/cad (3 pips with my broker) and the combined trades with a 5 pip cost act just like a eur/cad with a 9 pip cost, since the usd cancels out. Of course, it’s a bit more complex to manage, but every pip counts!
Happy trading
You’ll probably realize this the more you trade but tight stops like 10 pips will rarely hold too well. I understand you’re trailing your stop, however day trading has a lot of volatility sometimes.
It’s happened to me where a tight stop loss takes me out of a trade just when it starts to reverse back in my intended direction for triple or quadruple my stop loss.
Allow a reasonable amount of room for your stops and you’ll find you will become more profitable.
thanks for the help
thanks for the reply. I havent really got my head arounf the stop loss precentage yet. Firt instance is ti think - o my god , if i leave it too low im going to lose that amount, but i seen some spikes on some charts ive been analising and you right. There could be a bag full of pips there and I get stopped out. One question I have , how is day trading more risky than wave swing trading. Surely with the scalpig you get in if you get the signal and trend correct , collect 2-3 pips and get out. If a trade is going for days and you can watch it , how do you control it?
forex wales
Hi all my first post on this forum
It is important to consider why you set a stop loss at a particular spot and where you place it, if you have set it just below support then having a tight stop will minimize loss’s. Problem is most gain confidence as it rallies therefore support ends up a long way down.
It is also important to make sure your risk reward ratio is more in your favor than the brokers.
Hi Forex Wales. Good to see things are going well for you. Per our previous post, I’ve found there are instructions on the internet for just about every possible feature of your platform. So any questions, just google it with your platform type and you’ll probably find answers. Almost always there are youtube videos that show you step by step anything you need to know. Failing that, your broker is paid to help, so don’t be shy about calling their customer support with any questions.
Let’s talk stop losses. Why have a stop? It’s a protection against an unforeseeable event. Like say your internet goes down and the market turns against you just at that moment. Always keep your brokers trading desk phone number handy for such a thing so you can quickly close your trades. But suppose there is a terrorist attack and the market runs away? A stop loss could save your account. The greater the stop, the less chance you’ll be stopped out of a trade by normal price action, but the more risk you’ll take. So how to balance these out?
The answer is take control of your exits, rather than leaving it up to the stop loss. Before entering a trade, ask yourself, at what point will I know this trade isn’t working, or how much am I willing to let it run against me before I exit?
If say you have entered above an up trend line, you could say, "if the price drops below this up trend line, it’s not working and I want to get out. Or you could say, I don’t want to risk more than 12 pips on this trade. Then you set that as your “mental stop”. Your success will depend largely on how consistently you manually exit your trades at a predetermined point. It takes much practice to develop that mental discipline of a Spartan warrior.
Now you want an emergency stop loss, which always risks less than 2% of your trading capital, set well out of the way of your price action. If you find that you are being taken out by stops more than 20% of your trades, either your emergency stop is set too close to price action, or you are riding out losing trades beyond your mental stop. So work on fixing that. Never ride a losing trade all the way to your emergency stop. It’s a sick feeling. Just get out of a loser quick and go looking for pips elsewhere. There must be one hundred ways to say it, but you must be aggressive in preserving your trading capital, and slow or conservative in taking your profits; have the courage of your convictions, but have an open mind and consider the opposite case; or more simply, cut your losses quick and let your profits ride.
Personally, I’ll enter trades with a 30 or 40 pip emergency stop, and with a tight mental stop of about 10 or 12 pips. If the trade goes against me that much, then I’ve done something wrong. I get out first, then try to figure it out. Trying to figure out why a trade is going against you while you are still in it is a sure way to big losses. If the trade goes in my favor, I’ll trail the emergency stop when I think about it, and try to manually exit with max pips. But each trader must develop his own methods.
To summarize, if you are doing discretionary trading, you must learn to control your exits, you can’t depend on any program or fancy pants stop loss or formula to do it for you. It’s hard work, but it pays well.
Happy Trading
Graviton
Awesome as always
Ill take on board you advice, I’m in demo trading now for a year. That’s my tactics
And long plan and determination be able to manage my money with confidence
Man if you ever become a mentor, look me up
Good luck
Ill be in touch with progress
Forex wales
Your stops should be placed at logical levels:
NOT round numbers
NOT even numbers
near, but not at, S/R levels
IMO, trailing stops are garbage because they don’t take market conditions into consideration. It’s blind hope that your stop doesn’t get triggered.
barb
so S/R levels with a bit added on incase it gets spiked?
Woah hey, Round numbers in the centennials are good psychological barriers, though admittedly so far in my experience, they are not as strong as the evident S/R levels. it’s still worth noting however.
And you’re right, not directly ON the line, but near it. Preferably on the side that doest require crossing for a TP and requiring many crossings for the SL. Force the line to turn your way.
My method is to place a stop about 3 pips beyond an S/R level when I’m using them. It’s not unusual for the price to make a small penetration of the level before turning around. But you have to cut it off somewhere, and anywhere you put it it’s going to get hit sometimes if it’s too close to price action. Cheers.
Trailing stops do work but they perform very poorly.
The reason is that they do not allow your trade to breathe properly during a retracement.
As a result, they close you out too early, shutting out your opportunity to let your profits run - a must for successful trading.
To solve some of your problems with entering on an SR line, it is an excellent money management strategy to use 2 contracts upon entry and use the method described in the hyperlink below - it will most definitely give you an edge…
http://forums.babypips.com/analyst-arena/12562-using-multiple-lot-positions-improve-trading-fx.html
Excellent info, as always, tymen1. I’m about half way through reading your Finest in Trend Trading thread. Tons of good stuff there. It’s highly recomended to traders of all levels.
I haven’t discussed trading multiple lots, but that’s the method I use. I’ll typically put in a “feeler” position of 1/5 th what I want to trade. If it goes against me I get out quick with very little damage to my trading capital. If it goes my direction, I’ll keep adding lots until I have all 5/5ths in and let the profits ride until the trade loses momentum, be that hours or days. When the momentum slows on a trade, I start taking out “Chunks” of profits. That sounds so good I’ll say it again; “Chunks” of profits. I have good success with this method, but of course every trader must find his or her own personal “Holy Grail”.
Happy Trading