Hello. Ive been overloaded with Forex information since i’ve started learning and trading on a demo account. Naturally I have some questions and would appreciate some help.
Should the Candle stick Low or Close be used when drawing trend lines? I ask this because I beleive this is very important. For example. Just 1 candle can drasticaly change a trend line. We’ve all seen the odd candle sticking out like a sore thumb with some gigantic Tail spanning 1 million pips… and this changes the trend line by a big margin depending on where you place it. At the tail or the close?
Just how do you move you SL to BE? I cannot seem to do this because you need to take into account the cost of the spread… This leads me to my next question.
When you take say 10 micro lots. Does the Spread remain the same as 0.1 lot or is it multiplied by 10?
I guess it remains the same. Looking for confirmation.
Do you need to take leverage into account when calculating risk margins, risk rewards and SL?
The demo will only provide me with 100:1 leverage even tho I chose 500:1 apparently, therefor I do not no for sure which I am using… so hoping dont need to use it for calculations.
I am going for the Pure Price action systems, however I cant help thinking I should be using either a Stoch o MACD for divergence as the divergence trend lines seem invaluable. Advise on this ?
When placing a buy/sell on Meta Trader it will dispay the values I.E 0.01, 0.1, 1,2,3,4,5,6,7,8. I really don’t know which one I should be picking if I use a micro account. Which is best please? I find 1 is far more volatile than 0.5 even tho its only 2 times more. Not sure why…
Hear is my opinion.
1.
For sure you cannot answer with 100% on this question…But for this little time that i am trading,i understand that big tail in a candle should not be counted as a change of trend, most of the times it is done for braking the Sell/Buy orders or to kill stop losses then the trend comes back to its normal… That is what i think about it.
This is the problem. People say to join the higher highs to find the trend and the long tail would count as the higher high/lower low… so in this sense you would draw the line at the tail… but I dont like the idea of altering the trend line purlely for one candle which didnt even close at that level…
bumping this. Looking for some feedback. I think these questions are the less obvious ones which alot of people probably struggle with also once passed the baby pips school…
You have certainly found a good place to get the sort of answers you want. It is great to have found this early in your trading career, as between all the members there is an awful lot of knowledge on this site of most approaches to Forex trading.
I will happily give my view on your questions, but there will be shades of opinion on many of them, so a cross-section of views would be more helpful overall. Partly because you don’t know me, so by definition you should take what I say with a pinch of salt, and partly because we each of us trade with different styles, so answers that are correct for me might not be so for you. As you gain experience you will begin to establish whether you agree with my answers, but here there are, in order:
Unfortunately this is one of experience. There will very rarely be a trendline that gives neat touches with no breach, so I would advise going with the majority of touches. If there is one spike that was caused by a big announcement, say, then this can represent a blip within a trendline that is otherwise respected and will endure after the event. Often, experienced traders move away from trendlines as they are subjective and can be very different between traders. Personally, I tend to use an ema as a trendline if I am looking to trade a trend. So by all means draw a trendline, but do not be too concerned if there are one or two small breaches - you are looking for the net, overall Price move, not for absolute adherence to a line you put on your chart. If there is no clear overall direction/level, then perhaps there just is not trend;
I imagine that this varies between platforms. I am with ETX Capital, and once I have a trade open there is an ‘amend order’ button; clicking on that opens up a new window where new TP and Stop levels can be set (as long as current Price is a few pips away), so the Stop can be trailed up to 0 pips, putting it at B/E and giving a ‘free’ trade from there on out. But other platforms might be different;
I have never traded microlots, sorry, so will leave this one to others;
Again, outside my area of expertise, so I will leave this one to others;
Pure PA trading does not, in my opinion, need any indicators, although indicators are a hot topic on here from time to time so opinions will vary. I have never used Stochs, I stopped using MACD not long after I started trading (I found that once I took it off I was still making the same trading decisions, so decided to keep the screen clearer), I occasionally use RSI on the Daily to look for divergence - but my trades work without it, I only use it in very particular circumstances that are not helpful here - so most of the time prefer to keep the screen clear. As I mentioned in my answer to question 1), above, I do use emas on my trend-based trading, although not for trading non-trending markets. So personally, I would advise setting up some ema and playing around with those - although some Stoch advocates might come on and disagree with me there lol. Most of the approaches work, but most of them do not work for most of us.
I have never used Metatrader, so will leave that one to others, sorry.
Apologies for the incomplete answers, but hopefully that gives you some food for thought.
Keep asking questions and putting in serious chart time and you will get there.
You have a lot of questions but I will mention two things which will make you a much better trader… Don’t pay too much attention to trend lines. Use it for market direction and also as confluence. Look at horizontal S&R levels as they correspond directly with price!!! Your real leverage is the amount you are risking of your capital on any one trade. keep this down to 1%!!! (This is the holy grail in trading) and aim for reward of 2% and higher. This way you can lose more trades than you are winning and still be profitable…
