The following list are actually extracts from this website -> [forex4noobs](12 Essential Trading Tips to Make You a Pro Trader). It is exactly what I thought what’s needed to trade like the pro (here, my definition of a pro who trades forex systematically and consistently profitable. I do not like the topic of the article though… I rather would name the list as “12 tips To Make you start trading profitably… consistently”.
The list I really like readers here to take note especially are the following (direct extract from the website ) followed by my additional comment (in black font)
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[B]8. Stick to Your Method[/B]
Every trading method has its ups and downs. No trading system, method or style will be 100% profitable, all year round. My method, for example, has on average an 80% success rate. Some periods of the year I will win only 6 in 10 trades (60%). Other periods in the year I win 100% of trades for a month or two.
I know each year, I will have some bad periods in which case I lose more trades than normal. I do not lose faith though. I stick it out and keep on trading. The problem with most newbie’s is they will give up on a method after its first bad week.
Don’t abandon your method when times are tough.
As I’ve already stated in my previous system update, especially when after Macfibo had a losing week. It is different when you trade the system (in this case, macfibo) with your live account without the backing of experience (I believe that backtesting manually thoroughly as I suggested many many many times, can give you the experience and information needed to gain some ‘confidence’ of your system), you will definitely be skeptical or lose faith when Macfibo experience 3-5 losses in a row.
[B]9. Keep It Simple[/B]
This is an easy one. Keep it simple!
There is no reason to complicate trading. For example, my trading method is extremely simple yet extremely effective. I spend 2-5 hours per week trading and the rest of the week enjoying life.
Your method does not have to be incredibly complex to work. Keeping it simple will allows you to:
- Work much more efficiently
- Work less
- Speed up your learning (KISS)
If you remember nothing else from this article, remember this……
Keep it simple!
I would like new traders who are interested in trading the system, to stick to the original rule (version 1.2), infact I even advice new traders to leave out the filters, just trade according to version 1.0. I strongly believe so. The more complicated things added to the system, the harder it is for you to learn. Nothing wrong with adding filters and some new rules, as long as your brain can process it without stressing you out. You can’t trade with stress… unless you want to trade to lose money. Macfibo version 1.0 up to 1.2 is simple enough and I believe any newbie can process it fine. If you think it’s too complicated, then just leave out the complicated filters. I posted Macfibo performance of the rawest version before and right now it has harvested 1k pips this year so far… not bad.
[B]10. Trade Only One Pair[/B]
The key to making that transition from newbie to pro is keeping your trading simple.
One of the easiest ways to keep trading simple is to trade only a single currency pair at a time. This is so damn obvious I am surprised more people do not do it. Trading one pair helps because it allows you to concentrate all your efforts on learning that pair, therefore allowing you to understand how it moves.
If you try and trade 5 pairs at the same time, learning to trade becomes much harder. You will have to learn the unique characteristics of all those different pairs and each pair is unique. Each currency pair:
- Reacts differently to news.
- Moves at different rates, some fast some slow.
- Moves more rapidly at different times of the day.
- Has to be managed differently when holding an open position.
As a newbie, jumping into the deep end with multiple pairs adds a lot more stress and slows the learning process.
So start off with a single pair. Once you’re profitable you can add as many pairs as you think you can handle.
I can’t say it better than the above. That is why I shirked to see some traders who wants to trade/test/backtest more than one pair… up to 10 pairs! Just stick to one or two maximum.
[B]11. Trade Only One Time frame[/B]
As above, picking a single time frame keeps things simple.
Looking at a single time frame has several benefits:
- Allows you to concentrate on learning one time frame, therefore removing a lot of the confusion that comes with learning multiple time frames.
- Gives you less charts to look at and allows you to concentrate more energy on analysing a single chart, therefore improving efficiency and the quality of your analysis.
- Stops you from overanalysing your pair. Looking at too many time frames can give you conflicting signals.
- It just makes your life easier.
Remember it’s all about keeping it simple. If you have a single timeframe and a single pair it means you’re looking at a single chart. As a newbie you do not want to juggle multiple charts. Stick with one chart, until you become consistently profitable.
I have been asked if I had ever checked larget TF to determine ‘trend’ before, I answered I never trade Macfibo H1 or H4 looking bigger timeframe for ‘trend confirmation’. I just trade what is given to me in the specific timeframe. I do understand some trader feels it is ‘important’ to check other timeframes to confirm the ‘small wave’ coincides with the ‘big wave’. Let me say to you now, after years trading Macfibo (H1 and H4 ocfourse), I never done this and it serves me pretty well. For Macfibo trading, no need to look at other timeframe to confirm a ‘trend’.
[B]12. Clean Charts[/B]
Most newbies pile as many indicators as possible onto a chart, when they first start trading. Indicators help with your trading (apparently) so the more the better, right? Wrong!
As traders gain more experience they start figuring out that less is more. The more indicators you have on your chart the more confusion you will have. Every extra indicator:-
- Adds to the clutter making your charts harder to read.
- Gives you more to think about therefore clouding your judgment.
- Increases the possibility of giving you conflicting signals.
- Looks pretty damn ugly…
Indicators are not essential. I personally trade with no indicators and have an 80% success rate. I am not saying you need to remove all indicators but limit it to a max of 2 at a time on your chart.
I trade with no indicators, simply a few support and resistance lines and candlestick patterns.
Adding RSIs, stochs, Volume, etc etc just makes me more confused with signals. I stopped touching it years ago when I realised it doesn’t add anything to my already lagging indicator that is Moving Average. But that is just me. If you believe adding more indicators can improve Macfibo, let me hear it and see if I have tested it before… and do check that ‘idea’ on 10-15 trades on random dates, and see if it gives more than 70% winning rate or meets your objective 7 out of 10 times (objective can be filtering fake signals or something). But until that new well tested idea are validated, just keep things ‘clean’… I mean Moving Average is the only indicator my eyes can tolerate.
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