Forex (...and trading in general) mindset

Beginner Questions
1

Hello fellow traders,

I’m a new forex trader who has succeeded in 1-Month Demo account by doubling his balance and I’m ready to move on Live. I’ve gone through lots of forum posts about forex mindset, risk management, R:R ratio, stop loss, take profits etc. I consider these rules complete bullshit (yes, I mean it). However I still wonder how people become profitable by following these “rules” tightly.

I wanna share my so far experience with you, and I am free to hear all your opinions. Lemme make it easy for your eyes now:

  • Never used fixed stop loss level (25 pips as many suggest). I adjust my SL in every trade depending on my technical analysis before.
  • Same goes for Take Profit Level. I cannot only aim for these 20-30 pips per trade man, that’s hard sometimes.
  • So, it is logically assumed that I don’t use fixed Risk/Reward ratios. There’s a pretty common theory about those and how they cooperate with win %, so I’m not going deep in that, you already know what I’m talking about. Some days are just bad, some days are golden
  • I do NOT have a specific trade style. I can say I’m not that guy that keeps positions for weeks for sure though. Sometimes I close the trade after 5 pips and really quickly. Sometimes I let it sit for days, because of my gut feeling (only 1 time that it betrayed me in this month)
  • I never (BUT NEVER) aim for these “pips per day”. As I said, some days go negative, some days hit the ideal weekly goal. Having daily pip aim makes you overtrade to succeed in my opinion.

That’s it. I know many will dislike all of what I said. I might do so in future as well. But for now, this free trading strategy has helped me double my demo balance in 1 month. Yes, I went at -30% at some point, yes I lost a lot in my demo, yes yes yes… Tell me what you think of that. Tell me how could I be different, better , anything! I’d appreciate some help with lot sizes as well.

*doubling is done with 1 std lot in 10k balance

Thanks for reading! Happy trading!

2 Likes
2

If it works for you then that’s great. A lot of these ‘rules’ are in place to prevent beginners from blowing their accounts and helping practice risk management. Once you have enough knowledge and experience you can do what you want when you want as per your own strategy.

Nothing wrong with disagreeing with them but they’re not bullshit. It’s for people who dont have the discipline or patience at the beginning and need time to work on trading. A lot of people dont have your ‘gut feeling’ so I wouldnt recommend beginners to start looking for a ‘feeling’ of when to trade. Your experience is right for you but it’s not what I would or have recommended to someone who comes to me for advice.

Keep up the good work though, like I said if it works for you, best of luck.

1 Like
3

I definitely agree with you, and I think I will stick with it. When I say gut feeling I didn’t mean anything advanced anyway. I kept seeing a price falling without stop, this RSI being below 20 at 1H and fib levels breaking as well. So I kept my trade open because c’mon we all know this can’t be like this for a long right? :slight_smile:

4

I agree with you but I have still in my mind that we should take care of Forex rules and we have knowldge about Forex if we want to be successful in Forex. If you have no skills and do not know how to risk managment then it will be very difficult to manage your trade.

5

You say you are new to trading yet you explode onto this forum and appear to suggest that the people on this site are a bunch of idiots.

You ask for to hear all opinions, well here is mine.

My guess is you will blow your account and go broke so lets see how you go after a year of trading live.

Good luck

Blackduck

1 Like
6

A fixed stop loss in pips I agree is not the best. A stop loss should be set depending on technical levels - which vary in pips.

I also don’t use fixed profit targets either - there actually contrary to market wisdom which is to let profits run as long as you can.

I know the idea of profit targets make people feel warm and fuzzy - but it is mental anchoring that can get in the way of trading success.

However I would not have preconceived ideas about any of this just yet

7

There are basically two types of trades: mechanical and discretionary.

Automated trading will simply follow a precisely designed set of rules and then left to get on with it. Nothing wrong with that or its rule base - if it is working.

The other style is discretionary - and that means the individual trader is in the control seat and is entirely responsible for how they manage their trades.

In my opinion, it is up to that individual to decide what suits their own circumstances best. Some rules are essential for some, and the same rules will be useless to another. For example, if a trader has a little system that has on average a 60+% win rate with a TP of 30 pips and a SL of 25 pips, then they may be happy with just that. On the other hand, another trader may look for longer term investment trades that can sit for ages with an open minus but still produce a big, significant win eventually - some will have a time horizon of even months (but not many here on BP).

The common objective of all trading is basically to earn money and the only real “rules” are to define an approach that works over time, and to protect your equity so that your earnings grow and you are still here to trade “tomorrow”.

There is no reason why one cannot adopt a number of different approaches. For example, I have a journalised trade set-up on SP500 that consistently wins about 150-200 pips per trade regardless of how far the market may travel after exit on each move. It has a fixed TP and SL and produces around 75% wins on around 15 trades a month. I simply treat that as my “bread and butter” trades adn don’t have to think about them much. I spot the set-up, set the trade, and leave it as a “set and forget” (more or less :))

But that does not stop me from looking at other things and taking trades with, say, a trailing stop, or even effectively open with just an “airbag” stop way below the market. (I admit I haven’t taken any such trades during the current coronavirus era!

But, I am just saying that a cowboy, purely intuitional approach is likely to fail sooner or later without some kind of guidelines and protective constraints, but that does not mean that one has to put oneself into a highly constrictive straitjacket that stifles all creativity and destroys the pleasure in trading. Afterall, trading is as flexible as one’s own imagination is able to take it!

8

Yes that is the smart way to do it.

Cheers

Blackduck

9

Hello sir, I would like to share my actual method with you bc I’m really open to suggestions from experienced traders. When I see a trade opportunity:

  • I see the entry price without even noticing possible TP
  • I seek for a SL based on my analysis
  • Then I seek for a TP again based on my analysis.

Sometimes the Reward/Risk will be 2/1, 3/1 even 4/1 sometimes
But most of the times I see myself having a 1.5/1 R/R without even planning it, it’s just how it is.

Do you find this strategy good? Will it help me maintaining a good plan? What are your suggestions on that?

EDIT: If I have to say I follow one rule is never risking more than 2% per trade. R/R is not fixed tho

10

@LaFlamingPip

I don’t see any entry criteria here - you only talk about stop loss and risk reward - or was your entry strategyvearlier in the thread?

11

I seek for entry opportunities after technical analysis. I only asked if I handle the whole SL./ TP thing well so far. That’s why I only mentioned these two in my message above

12

Trading is all about doing it your way, so good for you.

Trade the way you’re trading and if you’re still consistently profitable doing the same exact thing in about 3 years, come back here and reiterate that it’s all bull (to you).

Who knows, maybe you’ll be in the Market Wizards book one day as the guy who did things differently.

Cheers

13

@longshottrader

In fairness I do think there are many generic beliefs and mythologies associated with trading that are questionable.

For example I’ve never used a support resistance level in my life. I m bullish the moment I buy and bearish the minute I short.

No horizontal line on a chart can change that. I see it as our original poster said ‘bullshit’

But that is my take on it, another likely sees it different.

Another thing I too find ‘bullshit’ is the idea of a profit target, to me it makes no sense if markets are trending in nature why we should cut out profit short.

You have to have a mighty fine win ratio if you can afford to take profits at twice your risk - I know I cannot afford to do that.

I do agree though that successful trading is really all about what works for the individual.

The problem is for many beginners by the time they find out what works for them many are either so traumatised by the whole experience or their accounts have blown up.

1 Like
14

Heheh I was traumatised but I didn’t blow up or give up.

What new traders don’t consider is, who the heck said it and what kind of trader are they?

You can have one guy say he never made any money trading technicals and another saying he only got rich after trading fundamentals only. Both are right and both are quoted a lot on the internet (you know who they are, they are so famous).

Here’s one belief that circulates a lot: Lower timeframe is just noise. Nah, it depends.

So Johnscott31, I agree with you–that’s what I was meaning to convey in my earlier post when I said that LaFlamingPips can reiterate that it’s all bull to him/her after 3 years of success.

What the trading world needs more of is a mentor who isn’t selling a course.

15

@longshottrader

Well i agree he did come over in a way that didn’t endear him to the rest of the community - but I also think he was quite perceptive for someone so new.

He is asking the right questions which is more than I did when I began.

16

your a star :star: :star2: pupil on here

17

So if you don’t consider support and resistance levels how do you determine when you decide to take profits of better still when to completely exit a trade??

Can you see the contradiction in these statements??

One minute you say it is bullshit and the next you say it is ok if it works for others. That is contadictive. If something works for someone but not for you then it cannot be bullshit.

Hope you can understand that as suggesting that those who use support and resistance successfully are using a bullshit strategy is disrespectful.

Happy trading

Blackduck

18

Well said. :+1:

Cheers

Blackduck

19

@Blackduck

Not at all. Assuming I am going long…

you could say my entry price is the level I see as resistance (or slightly above it).

I trade inside bars alot and my entries are a couple of pips above the high of the bar. That is the only ‘resistance level’ i care for.

As for exiting I would trail my stop at the low of each consecutively rising bar (usually daily). That is my support - if it gets hit I’m out.

In the mean time if I see some long term strong resistance line that everyone under the sun is looking at I ignore it.

I have found moving average useful but I do not use them in a conventional way.

Personally I find SR of no value at all - but i would never imply others to think the same

20

For me they are bull - but I know how much all of is are attached to our own methods.

What is bull to me might not be to someone else. As they say beauty is in the eye of the beholder

1 Like