Simple rules
1 - Never trade with money you cannot lose.
2 - Always stick to your plan.
3 - The 1% rule is 1% of your total funds / 4 = how much you should risk per trade. For example: if you have 20000$, 1% = 200/4 =50$ risk
4 - There are around 20 trading days in a month since trading is closed on weekends. You want to enjoy freedom.
5 - After...
TIP #3. This tip is mostly connected with the rules. You don’t need to invent your own rules, because all rules are already invented. You just need to choose a set of rules that suits best to your personality. How can you know what rules suit your personality? Do backtesting. Scroll the chart back in history and trade the Market using this set of rules as if real...
Stop losses aim to end a trade when the market goes so far in the opposite direction, that the trade idea no longer makes sense. It’s the point of invalidation . Ideally, they get hit on bad trades only and not on good trades. The area between entry point and stop loss is a zone where the trade is at a loss, but can still recover. This is not an invalidation of...
Currency correlation measures the extend in which two individual currency pairs move in the same or in opposite directions. It´s usually expressed as a percentage, from -100% to +100%. Positive correlations (from 0% to 100%) indicate how much two pairs move in the same direction. Negative correlations (from 0% to -100%) indicate how much two pairs move in opposite...
TEST YOUR TRADING SYSTEM
I will not go deep into this, because it quickly becomes a shouting match on who has the best system, which is usually more about ego than fact. It is sufficient to say that I have seen / know of profitable traders who use fundamentals, price patterns, Elliot waves, renko, moving averages, structure levels, pitchforks, trend rules and...
Imagine you have a strategy and you found that the optimal risk you should take is 4%.
In other words with this strategy you should put 4% of your capital at risk in every trade to grow your account the fastest.
If you enter a trade with 100% of your capital, the SL % is the % you put at risk. NOT the whole position size. So by entering a trade with all of your...
As we all know, when we open a trade, there is no guarantee it will be a winner. Given the win rate of a certain trading strategy, there is a random distribution between wins and losses. We trade to make money over a larger number of trades, not to win every individual trade, which would simply be unrealistic. That is why it’s important to be confident when we...
