Couple of things I see asked over and over by new trader:
- Question: “If I a broker gives me less available leverage isn’t that less risk?” Or, “I want to start an account with 1:1 leverage so it’s less risky.”
Answer: You want more leverage. Why because that requires less in your account to cover the trade. Leverage doesn’t effect risk unless you overleverage and abuse it. You can still risk only 1% of your account with 1:1000 leverage. YOU manage and plan risk with lot size and stop loss, NOT leverage.
- Question: " Should I trade on 1-15 minute time frames, is it easy or where new traders should start, and I don’t think I have the account to fund long term trading."
Answer: It’s the exact opposite. Scalping for small pips on small time frames is a recipe for losing your account. Smaller time frames are noise compared to larger time frames. Also , small stops (IMO anything under 50 pips) are rediculous and asking to be stopped regardles if you are in the right direction.
Why? When you enter a trade you are automatically negative the spread. So, if you have a 20 pip SL and a 5 pip spread you really have, 15 pip SL when you enter. From entry price only has to go against you 15 pips.
New traders should trade 4 hour and up time frames. They are far more predicatable and have more margin for error, provided you use appropropriately wide stops.
Trading larger time frames = more pips, more profit and less work and less watching charts. Do you want to work hard and make less or even break even or lose,? because that’s what happens to the vast majority of scalpers. Especially new traders.
There is a reason that veteran traders trend trade and trade longer time frames. I’ts easier and more profitable and far easier to stay consistent.
Question: What is the best trading strategy/method.
Answer: There are many different methods with many different entry and exit criteria. Any method should have a good balance of: Win/loss ratio, Risk/reward ratio & most importantly risk / money managment.
BUT, the best methods IMO are some form of trend trading. Why? If you can get in a trend and ride it, for days weeks or even months, until your method invalidates the trend you can possibly end up with 1000’s of pips from ONE trade.