Good thinking with different reply.
When I first learnt Forex couple of years back through a paid course, I was given materials and position size calculators that did everything for me. I was weary that I did not understand what was going on, the profits and losses, leverages, etc. how these were calculated so that I could improve. The good thing is that I have an engineering background so my maths level is quite alright to understand babypips formulas etc. By creating my own position size calculator, I finally understood many sections in babypips such as on leverage, account balance, the commissions, and other numbers I see on my MT4. Other formulas such as risk/reward ratio, %, compounding %, etc are crucial to understand so that I could layout a plan for myself and as a check to identify and improve on areas I was weak in. Maths and Forex in my opinion go hand in hand. Although I was fortunate to have a good maths background, you must know that I did not start off with that. As a matter of fact, through my younger life from primary to highschool, I usually only ājust passā or failed in maths test and exams. But when I was miraculously accepted into college to do engineering (yes I have always wanted to engineering despite my maths situation at the time), I told myself, āThis is it, buck up on my studies or get the boot in lifeā. And so that started my journey to attain a good level of maths. What I am trying to say here is that, no matter what you do, there is always maths involved if you want success in the top tiers which is Forex in this case. Unless we are in the top tiers of tradersā¦the rest do not make profit. And basic maths can be learnt by practice quite easily.And I must say it is easier to learn Rocket Science than it is to learn Forex because there is an element of psychology in Forex that cannot be mathematically calculated accurately.
What a great first post from a new member! Welcome to the forum, Farex_huat.
What is maths on forex for? ) Iām not very good at maths either, but it doesnt prevent me from making money on trading, so donāt even bother about that stuff.
Dear Texan1984,
a candlestick have 4 values.
open price
close price
high price
low price
open to close
= open price - close price
= net pip gain
High Low range (assuming daily candlestick)
=High - Low
=daily pip range amount
1 week has 5 days
eg. daily pip range for the following
Monday = 80pip
Tuesday =70pip
Wednesday =100pip
Thursday = 70pip
Friday =70pip
Average daily range
= (80+70+100+70+70)/5
= 78pip
Average daily range have a start point and end point. It is up to you to define.
Eg. you can use GMT 0000HR as start point and 2359GMT as end point. Say for example, at GMT1200 HR half the day is gone,more often than not, the high point or low point of the day is incomplete, and will be completed only by 2nd half of the day. You could make use of the average daily range to project how much more pip there is before the High Low of the daily candlestick will be completed.
Occasionally, High Low range is completed during the 1st half of the day. Usually it just mean that particular pair is dead. It may be a better idea to start searching for other juicy currency pair to trade.
The above is just an example of a trading idea or you can call it targets projection if you would prefer. In forex, you only need to know how to calculate AVERAGE values, ENTRY price to TARGET price and ENTRY price to STOP LOSS price.
Most of the time it is just addition, subtraction, calculating average or mean values. I would recommend reading up on mean median mode and learn a bit on how to determine certain values. It would prove to be quite useful later on.
The maths involve are not rocket science, pretty elementary I would say.
Lastly, just make sure the risk reward ratio are worthwhile before taking any trades. The stop loss are usually the high point or low point of the current daily candlestick.
Good Luck!
The Texan 1984
Have you been through all levels of Babypip education. If you have it is clearly indicated what you have to do! If you didnāt understand anything in the course, I am sure there would be many individuals here willing to help.
Have a positive attitude and you will get there eventually. Just remember anything worthwhile takes dedication, hard work and patience!
This is a very common question and can come to the mind of a new trader. In forex market the trader has to make a lot of analysis and interpretations, though it doesnāt require high level mathematical knowledge like theories and laws but still some basic calculations are there. You can be successful even if you donāt have high mathematics knowledge, as there is a availability of various calculators in forex which a trader can use, but manual calculations are considered as good as it gives the trader a deep insight of what is going in the market.
Donāt give up. Practice, learn and demo and you will know