The only way to ask my question is to use an example. In a EUR/USD case, we who trade with USD all know to buy early in an uptrend and to sell early in a downtrend. However, is there a way to profit from a downtrend (as in when the graph drops)?
I am American and therefore my end goal is to make USD. When buying Euros and the Euro strengthens I gain more USD. Is there a way to profit when the Euro weakens in this case? For example, could I “sell” Euros even though I’m really paying in American dollars, in the hopes the Euro would weaken?
Hopefully I didn’t confuse anyone? I’m practicing on Metatrader and want to get a feel of how to place trades. Thanks.
If I uderstand your question correctly, think of it this way, you have to decide whether you think the graph is going to go up or down and if you get it right you profit. If you get it wrong, you loose. It doesn’t matter whether it goes up or down, you just have to pick ahead of time which way and get it right.
It’s kind of like betting on the flip of a coin, it doesn’t matter if it lands on heads or tails, you just have to guess ahead of time which one its going to be.
Yes! If you’re only going long you’re missing out on half your trades!
I won’t explain the mechanics behind it because I don’t want to confuse you, but you can most certaily profit when the EUR/USD goes down.
It does not matter what currency your account is in, or what pair you are trading. If your account is in USD you can trade GBP/JPY (or any other pair) in either direction and make money.
There’s nothing special that you need to do. If you sell EUR/USD, and then it drops, your account balance will go up.
I thought so, just wanted to make sure I wasn’t going insane. I’ve gone through the entire School of Pipsology, practicing now, but am still struggling in grasping the concepts. I’m a smart guy, but this is taking time to learn.
My goal is to double my investment each month, but want to learn to do so in the demo first before trying it for real, as I’m risk averse.
Don’t feel bad. It took me forever to get it too. Common sense tells you price going up is good, and price going down is bad… It takes a while to get over that instinct.
Also, doubling your money every month might be a little too high of a goal. You’re setting yourself up for disapointment. I believe 2-10% per month would be a more reasonable goal for a new trader, but the exact amount will depend on your trading style, of course.
But whatever your trading style I highly doubt you’ll double your money every month, unless you count doubling it once or twice and then losing it all.
Oh, yeah, want to practice in the demo for several months. I’m just happy with a few dollars for the time being. I would like to get to where I’m good enough to double it.
I thought I’d ask, while no one can tell me a system to use (don’t think I’d want that), how might one form a system when they are learning? Where would I start? Thanks.
From my results lately, I’d say start with getting to know price action with, trendlines & support & resistance areas. Fibonacci lines are also very useful but takes some time to understand.
Price either bounces off, or passes right thru these lines/areas, or at times just hangs around them for awhile…lol. Once you see price at these areas, then possibly look at an indicator, or combination of indicators, to help determine which way & when to place an order.
I’m also risk adverse and try to keep tight stops without getting stopped out too often. I demoed for over a year, and have a live account that didn’t go as well as demo did, but I think now 2 years later, I’m almost there
I’d actually say your first goal as a new trader once you’ve gone live is to be break-even. If you start thinking too much about how much you’re going to make you will almost definitely blow yourself up.
I usually only use S/R and price action if it gets congested, and i try to pre-emptively set up another fibonacci if the last few candles show a resistance at a support level not previously on my charts. This suport level then becomes the 61.8 level as i set the pre-emptive fibonacci retracement on the chart.
