What Is the Proper Risk Reward Ratio in Forex Trading?

Former investment bank FX trader: some thoughts

Former investment bank FX trader: some thoughts
Hi guys,
I have been using reddit for years in my personal life (not trading!) and wanted to give something back in an area where i am an expert.
I worked at an investment bank for seven years and joined them as a graduate FX trader so have lots of professional experience, by which i mean I was trained and paid by a big institution to trade on their behalf. This is very different to being a full-time home trader, although that is not to discredit those guys, who can accumulate a good amount of experience/wisdom through self learning.
When I get time I'm going to write a mid-length posts on each topic for you guys along the lines of how i was trained. I guess there would be 15-20 topics in total so about 50-60 posts. Feel free to comment or ask questions.
The first topic is Risk Management and we'll cover it in three parts
Part I
  • Why it matters
  • Position sizing
  • Kelly
  • Using stops sensibly
  • Picking a clear level

Why it matters

The first rule of making money through trading is to ensure you do not lose money. Look at any serious hedge fund’s website and they’ll talk about their first priority being “preservation of investor capital.”
You have to keep it before you grow it.
Strangely, if you look at retail trading websites, for every one article on risk management there are probably fifty on trade selection. This is completely the wrong way around.
The great news is that this stuff is pretty simple and process-driven. Anyone can learn and follow best practices.
Seriously, avoiding mistakes is one of the most important things: there's not some holy grail system for finding winning trades, rather a routine and fairly boring set of processes that ensure that you are profitable, despite having plenty of losing trades alongside the winners.

Capital and position sizing

The first thing you have to know is how much capital you are working with. Let’s say you have $100,000 deposited. This is your maximum trading capital. Your trading capital is not the leveraged amount. It is the amount of money you have deposited and can withdraw or lose.
Position sizing is what ensures that a losing streak does not take you out of the market.
A rule of thumb is that one should risk no more than 2% of one’s account balance on an individual trade and no more than 8% of one’s account balance on a specific theme. We’ll look at why that’s a rule of thumb later. For now let’s just accept those numbers and look at examples.
So we have $100,000 in our account. And we wish to buy EURUSD. We should therefore not be risking more than 2% which $2,000.
We look at a technical chart and decide to leave a stop below the monthly low, which is 55 pips below market. We’ll come back to this in a bit. So what should our position size be?
We go to the calculator page, select Position Size and enter our details. There are many such calculators online - just google "Pip calculator".

https://preview.redd.it/y38zb666e5h51.jpg?width=1200&format=pjpg&auto=webp&s=26e4fe569dc5c1f43ce4c746230c49b138691d14
So the appropriate size is a buy position of 363,636 EURUSD. If it reaches our stop level we know we’ll lose precisely $2,000 or 2% of our capital.
You should be using this calculator (or something similar) on every single trade so that you know your risk.
Now imagine that we have similar bets on EURJPY and EURGBP, which have also broken above moving averages. Clearly this EUR-momentum is a theme. If it works all three bets are likely to pay off. But if it goes wrong we are likely to lose on all three at once. We are going to look at this concept of correlation in more detail later.
The total amount of risk in our portfolio - if all of the trades on this EUR-momentum theme were to hit their stops - should not exceed $8,000 or 8% of total capital. This allows us to go big on themes we like without going bust when the theme does not work.
As we’ll see later, many traders only win on 40-60% of trades. So you have to accept losing trades will be common and ensure you size trades so they cannot ruin you.
Similarly, like poker players, we should risk more on trades we feel confident about and less on trades that seem less compelling. However, this should always be subject to overall position sizing constraints.
For example before you put on each trade you might rate the strength of your conviction in the trade and allocate a position size accordingly:

https://preview.redd.it/q2ea6rgae5h51.png?width=1200&format=png&auto=webp&s=4332cb8d0bbbc3d8db972c1f28e8189105393e5b
To keep yourself disciplined you should try to ensure that no more than one in twenty trades are graded exceptional and allocated 5% of account balance risk. It really should be a rare moment when all the stars align for you.
Notice that the nice thing about dealing in percentages is that it scales. Say you start out with $100,000 but end the year up 50% at $150,000. Now a 1% bet will risk $1,500 rather than $1,000. That makes sense as your capital has grown.
It is extremely common for retail accounts to blow-up by making only 4-5 losing trades because they are leveraged at 50:1 and have taken on far too large a position, relative to their account balance.
Consider that GBPUSD tends to move 1% each day. If you have an account balance of $10k then it would be crazy to take a position of $500k (50:1 leveraged). A 1% move on $500k is $5k.
Two perfectly regular down days in a row — or a single day’s move of 2% — and you will receive a margin call from the broker, have the account closed out, and have lost all your money.
Do not let this happen to you. Use position sizing discipline to protect yourself.

Kelly Criterion

If you’re wondering - why “about 2%” per trade? - that’s a fair question. Why not 0.5% or 10% or any other number?
The Kelly Criterion is a formula that was adapted for use in casinos. If you know the odds of winning and the expected pay-off, it tells you how much you should bet in each round.
This is harder than it sounds. Let’s say you could bet on a weighted coin flip, where it lands on heads 60% of the time and tails 40% of the time. The payout is $2 per $1 bet.
Well, absolutely you should bet. The odds are in your favour. But if you have, say, $100 it is less obvious how much you should bet to avoid ruin.
Say you bet $50, the odds that it could land on tails twice in a row are 16%. You could easily be out after the first two flips.
Equally, betting $1 is not going to maximise your advantage. The odds are 60/40 in your favour so only betting $1 is likely too conservative. The Kelly Criterion is a formula that produces the long-run optimal bet size, given the odds.
Applying the formula to forex trading looks like this:
Position size % = Winning trade % - ( (1- Winning trade %) / Risk-reward ratio
If you have recorded hundreds of trades in your journal - see next chapter - you can calculate what this outputs for you specifically.
If you don't have hundreds of trades then let’s assume some realistic defaults of Winning trade % being 30% and Risk-reward ratio being 3. The 3 implies your TP is 3x the distance of your stop from entry e.g. 300 pips take profit and 100 pips stop loss.
So that’s 0.3 - (1 - 0.3) / 3 = 6.6%.
Hold on a second. 6.6% of your account probably feels like a LOT to risk per trade.This is the main observation people have on Kelly: whilst it may optimise the long-run results it doesn’t take into account the pain of drawdowns. It is better thought of as the rational maximum limit. You needn’t go right up to the limit!
With a 30% winning trade ratio, the odds of you losing on four trades in a row is nearly one in four. That would result in a drawdown of nearly a quarter of your starting account balance. Could you really stomach that and put on the fifth trade, cool as ice? Most of us could not.
Accordingly people tend to reduce the bet size. For example, let’s say you know you would feel emotionally affected by losing 25% of your account.
Well, the simplest way is to divide the Kelly output by four. You have effectively hidden 75% of your account balance from Kelly and it is now optimised to avoid a total wipeout of just the 25% it can see.
This gives 6.6% / 4 = 1.65%. Of course different trading approaches and different risk appetites will provide different optimal bet sizes but as a rule of thumb something between 1-2% is appropriate for the style and risk appetite of most retail traders.
Incidentally be very wary of systems or traders who claim high winning trade % like 80%. Invariably these don’t pass a basic sense-check:
  • How many live trades have you done? Often they’ll have done only a handful of real trades and the rest are simulated backtests, which are overfitted. The model will soon die.
  • What is your risk-reward ratio on each trade? If you have a take profit $3 away and a stop loss $100 away, of course most trades will be winners. You will not be making money, however! In general most traders should trade smaller position sizes and less frequently than they do. If you are going to bias one way or the other, far better to start off too small.

How to use stop losses sensibly

Stop losses have a bad reputation amongst the retail community but are absolutely essential to risk management. No serious discretionary trader can operate without them.
A stop loss is a resting order, left with the broker, to automatically close your position if it reaches a certain price. For a recap on the various order types visit this chapter.
The valid concern with stop losses is that disreputable brokers look for a concentration of stops and then, when the market is close, whipsaw the price through the stop levels so that the clients ‘stop out’ and sell to the broker at a low rate before the market naturally comes back higher. This is referred to as ‘stop hunting’.
This would be extremely immoral behaviour and the way to guard against it is to use a highly reputable top-tier broker in a well regulated region such as the UK.
Why are stop losses so important? Well, there is no other way to manage risk with certainty.
You should always have a pre-determined stop loss before you put on a trade. Not having one is a recipe for disaster: you will find yourself emotionally attached to the trade as it goes against you and it will be extremely hard to cut the loss. This is a well known behavioural bias that we’ll explore in a later chapter.
Learning to take a loss and move on rationally is a key lesson for new traders.
A common mistake is to think of the market as a personal nemesis. The market, of course, is totally impersonal; it doesn’t care whether you make money or not.
Bruce Kovner, founder of the hedge fund Caxton Associates
There is an old saying amongst bank traders which is “losers average losers”.
It is tempting, having bought EURUSD and seeing it go lower, to buy more. Your average price will improve if you keep buying as it goes lower. If it was cheap before it must be a bargain now, right? Wrong.
Where does that end? Always have a pre-determined cut-off point which limits your risk. A level where you know the reason for the trade was proved ‘wrong’ ... and stick to it strictly. If you trade using discretion, use stops.

Picking a clear level

Where you leave your stop loss is key.
Typically traders will leave them at big technical levels such as recent highs or lows. For example if EURUSD is trading at 1.1250 and the recent month’s low is 1.1205 then leaving it just below at 1.1200 seems sensible.

If you were going long, just below the double bottom support zone seems like a sensible area to leave a stop
You want to give it a bit of breathing room as we know support zones often get challenged before the price rallies. This is because lots of traders identify the same zones. You won’t be the only one selling around 1.1200.
The “weak hands” who leave their sell stop order at exactly the level are likely to get taken out as the market tests the support. Those who leave it ten or fifteen pips below the level have more breathing room and will survive a quick test of the level before a resumed run-up.
Your timeframe and trading style clearly play a part. Here’s a candlestick chart (one candle is one day) for GBPUSD.

https://preview.redd.it/moyngdy4f5h51.png?width=1200&format=png&auto=webp&s=91af88da00dd3a09e202880d8029b0ddf04fb802
If you are putting on a trend-following trade you expect to hold for weeks then you need to have a stop loss that can withstand the daily noise. Look at the downtrend on the chart. There were plenty of days in which the price rallied 60 pips or more during the wider downtrend.
So having a really tight stop of, say, 25 pips that gets chopped up in noisy short-term moves is not going to work for this kind of trade. You need to use a wider stop and take a smaller position size, determined by the stop level.
There are several tools you can use to help you estimate what is a safe distance and we’ll look at those in the next section.
There are of course exceptions. For example, if you are doing range-break style trading you might have a really tight stop, set just below the previous range high.

https://preview.redd.it/ygy0tko7f5h51.png?width=1200&format=png&auto=webp&s=34af49da61c911befdc0db26af66f6c313556c81
Clearly then where you set stops will depend on your trading style as well as your holding horizons and the volatility of each instrument.
Here are some guidelines that can help:
  1. Use technical analysis to pick important levels (support, resistance, previous high/lows, moving averages etc.) as these provide clear exit and entry points on a trade.
  2. Ensure that the stop gives your trade enough room to breathe and reflects your timeframe and typical volatility of each pair. See next section.
  3. Always pick your stop level first. Then use a calculator to determine the appropriate lot size for the position, based on the % of your account balance you wish to risk on the trade.
So far we have talked about price-based stops. There is another sort which is more of a fundamental stop, used alongside - not instead of - price stops. If either breaks you’re out.
For example if you stop understanding why a product is going up or down and your fundamental thesis has been confirmed wrong, get out. For example, if you are long because you think the central bank is turning hawkish and AUDUSD is going to play catch up with rates … then you hear dovish noises from the central bank and the bond yields retrace lower and back in line with the currency - close your AUDUSD position. You already know your thesis was wrong. No need to give away more money to the market.

Coming up in part II

EDIT: part II here
Letting stops breathe
When to change a stop
Entering and exiting winning positions
Risk:reward ratios
Risk-adjusted returns

Coming up in part III

Squeezes and other risks
Market positioning
Bet correlation
Crap trades, timeouts and monthly limits

***
Disclaimer:This content is not investment advice and you should not place any reliance on it. The views expressed are the author's own and should not be attributed to any other person, including their employer.
submitted by getmrmarket to Forex [link] [comments]

[Strategies] Here is My Trading Approach, Thought Process and Execution

Hello everyone. I've noticed a lot of us here are quite secretive about how we trade, especially when we comment on a fellow trader's post. We're quick to tell them what they're doing isn't the "right way" and they should go to babypips or YouTube. There's plenty of strategies we say but never really tell them what is working for us. There's a few others that are open to share their experience and thought processes when considering a valid trade. I have been quite open myself. But I'm always met with the same "well I see what you did is quite solid but what lead you to deem this trade valid for you? "
The answer is quite simple, I have a few things that I consider which are easy rules to follow. I realized that the simpler you make it, the easier it is for you to trade and move on with your day.
I highlight a few "valid" zones and go about my day. I've got an app that alerts me when price enters the zone on my watchlist. This is because I don't just rely on forex trading money, I doubt it would be wise to unless you're trading a 80% win rate strategy. Sometimes opportunities are there and we exploit them accordingly but sometimes we are either distracted by life issues and decide to not go into the markets stressed out or opportunities just aren't there or they are but your golden rules aren't quite met.
My rules are pretty simple, one of the prime golden rules is, "the risk is supposed to be very minimal to the reward I want to yield from that specific trade". i.e I can risk -50 pips for a +150 and more pips gain. My usual target starts at 1:2 but my most satisfying trade would be a 1:3 and above. This way I can lose 6/10 trades and still be profitable.
I make sure to keep my charts clean and simple so to understand what price does without the interference of indicators all over my charts. Not to say if you use indicators for confluence is a complete no-no. Each trader has their own style and I would be a narcissistic asshole if I assumed my way is superior than anybody else's.
NB: I'm doing this for anybody who has a vague or no idea of supply and demand. Everything here has made me profitable or at least break even but doesn't guarantee the same for you. This is just a scratch on the surface so do all you can for due diligence when it comes to understanding this topic with more depth and clear comprehension.
Supply and Demand valid zones properties; what to me makes me think "oh this zone has the potential to make me money, let me put it on my watchlist"? Mind when I say watchlist, not trade it. These are different in this sense.
👉With any zone, you're supposed to watch how price enters the zone, if there's a strong push in the opposite direction or whatever price action you're observing...only then does the zone becomes valid. YOU TRADE THE REACTION, NOT THE EXPECTATION Some setups just fail and that's okay because you didn't gamble. ✍
!!!IMPORTANT SUBJECT TO LEARN BEFORE YOU START SUPPLY AND DEMAND!!!
FTR. Failure to Return.(Please read on these if you haven't. They are extremely important in SnD). Mostly occur after an impulse move from a turning point. See attached examples: RBR(rally base rally)/DBD(drop base drop). They comprise of an initial move to a certain direction, a single candle in the opposite direction and followed by 2 or more strong candles in the initial direction. The opposite candle is your FTR(This is your zone) The first time price comes back(FTB) to a zone with an FTR has high possibilities to be a strong zone.
How to identify high quality zones according to my approach:
  1. Engulfing zones; This is a personal favorite. For less errors I identify the best opportunities using the daily and 4H chart.
On the example given, I chose the GBPNZD trade idea I shared here a month ago I believe. A double bottom is easily identified, with the final push well defined Bullish Engulfing candle. To further solidify it are the strong wicks to show strong rejection and failure to close lower than the left shoulder. How we draw our zone is highlight the whole candle just before the Engulfing Candle. That's your zone. After drawing it, you also pay attention to the price that is right where the engulfing starts. You then set a price alert on your preferred app because usually price won't get there immediately. This is the second most important part of trading, PATIENCE. If you can be disciplined enough to not leave a limit order, or place a market order just because you trust your analysis...you've won half the battle because we're not market predictors, we're students. And we trade the reaction.
On the given example, price had already reached the zone of interest. Price action observed was, there was a rejection that drove it out of the zone, this is the reaction we want. Soon as price returns(retests)...this is your time to fill or kill moment, going to a 4H or 1H to make minimum risk trades. (See GBPNZD Example 1&2)
  1. Liquidity Run; This approach looks very similar to the Engulfing zones. The difference is, price makes a few rejections on a higher timeframe level(Resistance or support). This gives the novice trader an idea that we've established a strong support or resistance, leading to them either selling or buying given the opportunity. Price then breaks that level trapping the support and resistance trader. At this point, breakout traders have stop orders below or above these levels to anticipate a breakout at major levels with stops just below the levels. Now that the market has enough traders trapped, it goes for the stop losses above or below support and resistance levels after taking them out, price comes back into the level to take out breakout traders' stop losses. This is where it has gathered enough liquidity to move it's desired direction.
The given example on the NZDJPY shows a strong level established twice. With the Bearish Engulfing movement, price leaves a supply zone...that's where we come in. We go to smaller timeframes for a well defined entry with our stops above the recent High targeting the next demand zone.
The second screenshot illustrates how high the reward of this approach is as well. Due diligence is required for this kind of approach because it's not uncommon but usually easily misinterpreted, which is why it's important it's on higher timeframes.
You can back test and establish your own rules on this but the RSI in this case was used for confluence. It showed a strong divergence which made it an even easier trade to take.
...and last but definitely not least,
  1. Double Bottom/Top. (I've used double bottoms on examples because these are the only trades I shared here so we'll talk about double bottoms. Same but opposite rules apply on double tops).
The first most important rule here is when you look to your left, price should have made a Low, High and a Lower Low. This way, the last leg(shoulder) should be lower than the first. Some call this "Hidden Zones". When drawing the zones, the top border of the zone is supposed to be on the tip of the Low and covering the Lower Low. **The top border is usually the entry point.
On the first given example I shared this week, NZDCAD. After identifying the structure, you start to look for zones that could further verify the structure for confluence. Since this was identified on the 4H, when you zoom out to the daily chart...there's a very well defined demand zone (RBR). By now you should know how strong these kind of zones are especially if found on higher timeframes. That will now be your kill zone. You'll draw another zone within the bigger zone, if price doesn't close below it...you've got a trade. You'll put your stop losses outside the initial zone to avoid wicks(liquidity runs/stop hunts)
On the second image you'll see how price closed within the zone and rallied upwards towards your targets.
The second example is CHFJPY; although looking lower, there isn't a rally base rally that further solidifies our bias...price still respected the zone. Sometimes we just aren't going to get perfect setups but it is up to us to make calculated risks. In this case, risk is very minimal considering the potential profit.
The third example (EURNZD) was featured because sometimes you just can't always get perfect price action within your desired zone. Which is why it's important to wait for price to close before actually taking a trade. Even if you entered prematurely and were taken out of the trade, the rules are still respected hence a re entry would still yield you more than what you would have lost although revenge trading is wrong.
I hope you guys learnt something new and understand the thought process that leads to deciding which setups to trade from prepared supply and demand trade ideas. It's important to do your own research and back testing that matches your own trading style. I'm more of a swing trader hence I find my zones using the Daily and 4H chart. Keeping it simple and trading the reaction to your watched zone is the most important part about trading any strategy.
Important Note: The trade ideas on this post are trades shared on this sub ever since my being active only because I don't want to share ideas that I may have carefully picked to make my trading approach a blind pick from the millions on the internet. All these were shared here.
Here's a link to the trade ideas analyzed for this post specifically
Questions are welcome on the comments section. Thank you for reading till here.
submitted by SupplyAndDemandGuy to Forex [link] [comments]

Former investment bank FX trader: Risk management part II

Former investment bank FX trader: Risk management part II
Firstly, thanks for the overwhelming comments and feedback. Genuinely really appreciated. I am pleased 500+ of you find it useful.
If you didn't read the first post you can do so here: risk management part I. You'll need to do so in order to make sense of the topic.
As ever please comment/reply below with questions or feedback and I'll do my best to get back to you.
Part II
  • Letting stops breathe
  • When to change a stop
  • Entering and exiting winning positions
  • Risk:reward ratios
  • Risk-adjusted returns

Letting stops breathe

We talked earlier about giving a position enough room to breathe so it is not stopped out in day-to-day noise.
Let’s consider the chart below and imagine you had a trailing stop. It would be super painful to miss out on the wider move just because you left a stop that was too tight.

Imagine being long and stopped out on a meaningless retracement ... ouch!
One simple technique is simply to look at your chosen chart - let’s say daily bars. And then look at previous trends and use the measuring tool. Those generally look something like this and then you just click and drag to measure.
For example if we wanted to bet on a downtrend on the chart above we might look at the biggest retracement on the previous uptrend. That max drawdown was about 100 pips or just under 1%. So you’d want your stop to be able to withstand at least that.
If market conditions have changed - for example if CVIX has risen - and daily ranges are now higher you should incorporate that. If you know a big event is coming up you might think about that, too. The human brain is a remarkable tool and the power of the eye-ball method is not to be dismissed. This is how most discretionary traders do it.
There are also more analytical approaches.
Some look at the Average True Range (ATR). This attempts to capture the volatility of a pair, typically averaged over a number of sessions. It looks at three separate measures and takes the largest reading. Think of this as a moving average of how much a pair moves.
For example, below shows the daily move in EURUSD was around 60 pips before spiking to 140 pips in March. Conditions were clearly far more volatile in March. Accordingly, you would need to leave your stop further away in March and take a correspondingly smaller position size.

ATR is available on pretty much all charting systems
Professional traders tend to use standard deviation as a measure of volatility instead of ATR. There are advantages and disadvantages to both. Averages are useful but can be misleading when regimes switch (see above chart).
Once you have chosen a measure of volatility, stop distance can then be back-tested and optimised. For example does 2x ATR work best or 5x ATR for a given style and time horizon?
Discretionary traders may still eye-ball the ATR or standard deviation to get a feeling for how it has changed over time and what ‘normal’ feels like for a chosen study period - daily, weekly, monthly etc.

Reasons to change a stop

As a general rule you should be disciplined and not change your stops. Remember - losers average losers. This is really hard at first and we’re going to look at that in more detail later.
There are some good reasons to modify stops but they are rare.
One reason is if another risk management process demands you stop trading and close positions. We’ll look at this later. In that case just close out your positions at market and take the loss/gains as they are.
Another is event risk. If you have some big upcoming data like Non Farm Payrolls that you know can move the market +/- 150 pips and you have no edge going into the release then many traders will take off or scale down their positions. They’ll go back into the positions when the data is out and the market has quietened down after fifteen minutes or so. This is a matter of some debate - many traders consider it a coin toss and argue you win some and lose some and it all averages out.
Trailing stops can also be used to ‘lock in’ profits. We looked at those before. As the trade moves in your favour (say up if you are long) the stop loss ratchets with it. This means you may well end up ‘stopping out’ at a profit - as per the below example.

The mighty trailing stop loss order
It is perfectly reasonable to have your stop loss move in the direction of PNL. This is not exposing you to more risk than you originally were comfortable with. It is taking less and less risk as the trade moves in your favour. Trend-followers in particular love trailing stops.
One final question traders ask is what they should do if they get stopped out but still like the trade. Should they try the same trade again a day later for the same reasons? Nope. Look for a different trade rather than getting emotionally wed to the original idea.
Let’s say a particular stock looked cheap based on valuation metrics yesterday, you bought, it went down and you got stopped out. Well, it is going to look even better on those same metrics today. Maybe the market just doesn’t respect value at the moment and is driven by momentum. Wait it out.
Otherwise, why even have a stop in the first place?

Entering and exiting winning positions

Take profits are the opposite of stop losses. They are also resting orders, left with the broker, to automatically close your position if it reaches a certain price.
Imagine I’m long EURUSD at 1.1250. If it hits a previous high of 1.1400 (150 pips higher) I will leave a sell order to take profit and close the position.
The rookie mistake on take profits is to take profit too early. One should start from the assumption that you will win on no more than half of your trades. Therefore you will need to ensure that you win more on the ones that work than you lose on those that don’t.

Sad to say but incredibly common: retail traders often take profits way too early
This is going to be the exact opposite of what your emotions want you to do. We are going to look at that in the Psychology of Trading chapter.
Remember: let winners run. Just like stops you need to know in advance the level where you will close out at a profit. Then let the trade happen. Don’t override yourself and let emotions force you to take a small profit. A classic mistake to avoid.
The trader puts on a trade and it almost stops out before rebounding. As soon as it is slightly in the money they spook and cut out, instead of letting it run to their original take profit. Do not do this.

Entering positions with limit orders

That covers exiting a position but how about getting into one?
Take profits can also be left speculatively to enter a position. Sometimes referred to as “bids” (buy orders) or “offers” (sell orders). Imagine the price is 1.1250 and the recent low is 1.1205.
You might wish to leave a bid around 1.2010 to enter a long position, if the market reaches that price. This way you don’t need to sit at the computer and wait.
Again, typically traders will use tech analysis to identify attractive levels. Again - other traders will cluster with your orders. Just like the stop loss we need to bake that in.
So this time if we know everyone is going to buy around the recent low of 1.1205 we might leave the take profit bit a little bit above there at 1.1210 to ensure it gets done. Sure it costs 5 more pips but how mad would you be if the low was 1.1207 and then it rallied a hundred points and you didn’t have the trade on?!
There are two more methods that traders often use for entering a position.
Scaling in is one such technique. Let’s imagine that you think we are in a long-term bulltrend for AUDUSD but experiencing a brief retracement. You want to take a total position of 500,000 AUD and don’t have a strong view on the current price action.
You might therefore leave a series of five bids of 100,000. As the price moves lower each one gets hit. The nice thing about scaling in is it reduces pressure on you to pick the perfect level. Of course the risk is that not all your orders get hit before the price moves higher and you have to trade at-market.
Pyramiding is the second technique. Pyramiding is for take profits what a trailing stop loss is to regular stops. It is especially common for momentum traders.

Pyramiding into a position means buying more as it goes in your favour
Again let’s imagine we’re bullish AUDUSD and want to take a position of 500,000 AUD.
Here we add 100,000 when our first signal is reached. Then we add subsequent clips of 100,000 when the trade moves in our favour. We are waiting for confirmation that the move is correct.
Obviously this is quite nice as we humans love trading when it goes in our direction. However, the drawback is obvious: we haven’t had the full amount of risk on from the start of the trend.
You can see the attractions and drawbacks of both approaches. It is best to experiment and choose techniques that work for your own personal psychology as these will be the easiest for you to stick with and build a disciplined process around.

Risk:reward and win ratios

Be extremely skeptical of people who claim to win on 80% of trades. Most traders will win on roughly 50% of trades and lose on 50% of trades. This is why risk management is so important!
Once you start keeping a trading journal you’ll be able to see how the win/loss ratio looks for you. Until then, assume you’re typical and that every other trade will lose money.
If that is the case then you need to be sure you make more on the wins than you lose on the losses. You can see the effect of this below.

A combination of win % and risk:reward ratio determine if you are profitable
A typical rule of thumb is that a ratio of 1:3 works well for most traders.
That is, if you are prepared to risk 100 pips on your stop you should be setting a take profit at a level that would return you 300 pips.
One needn’t be religious about these numbers - 11 pips and 28 pips would be perfectly fine - but they are a guideline.
Again - you should still use technical analysis to find meaningful chart levels for both the stop and take profit. Don’t just blindly take your stop distance and do 3x the pips on the other side as your take profit. Use the ratio to set approximate targets and then look for a relevant resistance or support level in that kind of region.

Risk-adjusted returns

Not all returns are equal. Suppose you are examining the track record of two traders. Now, both have produced a return of 14% over the year. Not bad!
The first trader, however, made hundreds of small bets throughout the year and his cumulative PNL looked like the left image below.
The second trader made just one bet — he sold CADJPY at the start of the year — and his PNL looked like the right image below with lots of large drawdowns and volatility.
Would you rather have the first trading record or the second?
If you were investing money and betting on who would do well next year which would you choose? Of course all sensible people would choose the first trader. Yet if you look only at returns one cannot distinguish between the two. Both are up 14% at that point in time. This is where the Sharpe ratio helps .
A high Sharpe ratio indicates that a portfolio has better risk-adjusted performance. One cannot sensibly compare returns without considering the risk taken to earn that return.
If I can earn 80% of the return of another investor at only 50% of the risk then a rational investor should simply leverage me at 2x and enjoy 160% of the return at the same level of risk.
This is very important in the context of Execution Advisor algorithms (EAs) that are popular in the retail community. You must evaluate historic performance by its risk-adjusted return — not just the nominal return. Incidentally look at the Sharpe ratio of ones that have been live for a year or more ...
Otherwise an EA developer could produce two EAs: the first simply buys at 1000:1 leverage on January 1st ; and the second sells in the same manner. At the end of the year, one of them will be discarded and the other will look incredible. Its risk-adjusted return, however, would be abysmal and the odds of repeated success are similarly poor.

Sharpe ratio

The Sharpe ratio works like this:
  • It takes the average returns of your strategy;
  • It deducts from these the risk-free rate of return i.e. the rate anyone could have got by investing in US government bonds with very little risk;
  • It then divides this total return by its own volatility - the more smooth the return the higher and better the Sharpe, the more volatile the lower and worse the Sharpe.
For example, say the return last year was 15% with a volatility of 10% and US bonds are trading at 2%. That gives (15-2)/10 or a Sharpe ratio of 1.3. As a rule of thumb a Sharpe ratio of above 0.5 would be considered decent for a discretionary retail trader. Above 1 is excellent.
You don’t really need to know how to calculate Sharpe ratios. Good trading software will do this for you. It will either be available in the system by default or you can add a plug-in.

VAR

VAR is another useful measure to help with drawdowns. It stands for Value at Risk. Normally people will use 99% VAR (conservative) or 95% VAR (aggressive). Let’s say you’re long EURUSD and using 95% VAR. The system will look at the historic movement of EURUSD. It might spit out a number of -1.2%.

A 5% VAR of -1.2% tells you you should expect to lose 1.2% on 5% of days, whilst 95% of days should be better than that
This means it is expected that on 5 days out of 100 (hence the 95%) the portfolio will lose 1.2% or more. This can help you manage your capital by taking appropriately sized positions. Typically you would look at VAR across your portfolio of trades rather than trade by trade.
Sharpe ratios and VAR don’t give you the whole picture, though. Legendary fund manager, Howard Marks of Oaktree, notes that, while tools like VAR and Sharpe ratios are helpful and absolutely necessary, the best investors will also overlay their own judgment.
Investors can calculate risk metrics like VaR and Sharpe ratios (we use them at Oaktree; they’re the best tools we have), but they shouldn’t put too much faith in them. The bottom line for me is that risk management should be the responsibility of every participant in the investment process, applying experience, judgment and knowledge of the underlying investments.Howard Marks of Oaktree Capital
What he’s saying is don’t misplace your common sense. Do use these tools as they are helpful. However, you cannot fully rely on them. Both assume a normal distribution of returns. Whereas in real life you get “black swans” - events that should supposedly happen only once every thousand years but which actually seem to happen fairly often.
These outlier events are often referred to as “tail risk”. Don’t make the mistake of saying “well, the model said…” - overlay what the model is telling you with your own common sense and good judgment.

Coming up in part III

Available here
Squeezes and other risks
Market positioning
Bet correlation
Crap trades, timeouts and monthly limits

***
Disclaimer:This content is not investment advice and you should not place any reliance on it. The views expressed are the author's own and should not be attributed to any other person, including their employer.
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Former investment bank FX trader: Risk management part 3/3

Former investment bank FX trader: Risk management part 3/3
Welcome to the third and final part of this chapter.
Thank you all for the 100s of comments and upvotes - maybe this post will take us above 1,000 for this topic!
Keep any feedback or questions coming in the replies below.
Before you read this note, please start with Part I and then Part II so it hangs together and makes sense.
Part III
  • Squeezes and other risks
  • Market positioning
  • Bet correlation
  • Crap trades, timeouts and monthly limits

Squeezes and other risks

We are going to cover three common risks that traders face: events; squeezes, asymmetric bets.

Events

Economic releases can cause large short-term volatility. The most famous is Non Farm Payrolls, which is the most widely watched measure of US employment levels and affects the price of many instruments.On an NFP announcement currencies like EURUSD might jump (or drop) 100 pips no problem.
This is fine and there are trading strategies that one may employ around this but the key thing is to be aware of these releases.You can find economic calendars all over the internet - including on this site - and you need only check if there are any major releases each day or week.
For example, if you are trading off some intraday chart and scalping a few pips here and there it would be highly sensible to go into a known data release flat as it is pure coin-toss and not the reason for your trading. It only takes five minutes each day to plan for the day ahead so do not get caught out by this. Many retail traders get stopped out on such events when price volatility is at its peak.

Squeezes

Short squeezes bring a lot of danger and perhaps some opportunity.
The story of VW and Porsche is the best short squeeze ever. Throughout these articles we've used FX examples wherever possible but in this one instance the concept (which is also highly relevant in FX) is best illustrated with an historical lesson from a different asset class.
A short squeeze is when a participant ends up in a short position they are forced to cover. Especially when the rest of the market knows that this participant can be bullied into stopping out at terrible levels, provided the market can briefly drive the price into their pain zone.

There's a reason for the car, don't worry
Hedge funds had been shorting VW stock. However the amount of VW stock available to buy in the open market was actually quite limited. The local government owned a chunk and Porsche itself had bought and locked away around 30%. Neither of these would sell to the hedge-funds so a good amount of the stock was un-buyable at any price.
If you sell or short a stock you must be prepared to buy it back to go flat at some point.
To cut a long story short, Porsche bought a lot of call options on VW stock. These options gave them the right to purchase VW stock from banks at slightly above market price.
Eventually the banks who had sold these options realised there was no VW stock to go out and buy since the German government wouldn’t sell its allocation and Porsche wouldn’t either. If Porsche called in the options the banks were in trouble.
Porsche called in the options which forced the shorts to buy stock - at whatever price they could get it.
The price squeezed higher as those that were short got massively squeezed and stopped out. For one brief moment in 2008, VW was the world’s most valuable company. Shorts were burned hard.

Incredible event
Porsche apparently made $11.5 billion on the trade. The BBC described Porsche as “a hedge fund with a carmaker attached.”
If this all seems exotic then know that the same thing happens in FX all the time. If everyone in the market is talking about a key level in EURUSD being 1.2050 then you can bet the market will try to push through 1.2050 just to take out any short stops at that level. Whether it then rallies higher or fails and trades back lower is a different matter entirely.
This brings us on to the matter of crowded trades. We will look at positioning in more detail in the next section. Crowded trades are dangerous for PNL. If everyone believes EURUSD is going down and has already sold EURUSD then you run the risk of a short squeeze.
For additional selling to take place you need a very good reason for people to add to their position whereas a move in the other direction could force mass buying to cover their shorts.
A trading mentor when I worked at the investment bank once advised me:
Always think about which move would cause the maximum people the maximum pain. That move is precisely what you should be watching out for at all times.

Asymmetric losses

Also known as picking up pennies in front of a steamroller. This risk has caught out many a retail trader. Sometimes it is referred to as a "negative skew" strategy.
Ideally what you are looking for is asymmetric risk trade set-ups: that is where the downside is clearly defined and smaller than the upside. What you want to avoid is the opposite.
A famous example of this going wrong was the Swiss National Bank de-peg in 2012.
The Swiss National Bank had said they would defend the price of EURCHF so that it did not go below 1.2. Many people believed it could never go below 1.2 due to this. Many retail traders therefore opted for a strategy that some describe as ‘picking up pennies in front of a steam-roller’.
They would would buy EURCHF above the peg level and hope for a tiny rally of several pips before selling them back and keep doing this repeatedly. Often they were highly leveraged at 100:1 so that they could amplify the profit of the tiny 5-10 pip rally.
Then this happened.

Something that changed FX markets forever
The SNB suddenly did the unthinkable. They stopped defending the price. CHF jumped and so EURCHF (the number of CHF per 1 EUR) dropped to new lows very fast. Clearly, this trade had horrific risk : reward asymmetry: you risked 30% to make 0.05%.
Other strategies like naively selling options have the same result. You win a small amount of money each day and then spectacularly blow up at some point down the line.

Market positioning

We have talked about short squeezes. But how do you know what the market position is? And should you care?
Let’s start with the first. You should definitely care.
Let’s imagine the entire market is exceptionally long EURUSD and positioning reaches extreme levels. This makes EURUSD very vulnerable.
To keep the price going higher EURUSD needs to attract fresh buy orders. If everyone is already long and has no room to add, what can incentivise people to keep buying? The news flow might be good. They may believe EURUSD goes higher. But they have already bought and have their maximum position on.
On the flip side, if there’s an unexpected event and EURUSD gaps lower you will have the entire market trying to exit the position at the same time. Like a herd of cows running through a single doorway. Messy.
We are going to look at this in more detail in a later chapter, where we discuss ‘carry’ trades. For now this TRYJPY chart might provide some idea of what a rush to the exits of a crowded position looks like.

A carry trade position clear-out in action
Knowing if the market is currently at extreme levels of long or short can therefore be helpful.
The CFTC makes available a weekly report, which details the overall positions of speculative traders “Non Commercial Traders” in some of the major futures products. This includes futures tied to deliverable FX pairs such as EURUSD as well as products such as gold. The report is called “CFTC Commitments of Traders” ("COT").
This is a great benchmark. It is far more representative of the overall market than the proprietary ones offered by retail brokers as it covers a far larger cross-section of the institutional market.
Generally market participants will not pay a lot of attention to commercial hedgers, which are also detailed in the report. This data is worth tracking but these folks are simply hedging real-world transactions rather than speculating so their activity is far less revealing and far more noisy.
You can find the data online for free and download it directly here.

Raw format is kinda hard to work with

However, many websites will chart this for you free of charge and you may find it more convenient to look at it that way. Just google “CFTC positioning charts”.

But you can easily get visualisations
You can visually spot extreme positioning. It is extremely powerful.
Bear in mind the reports come out Friday afternoon US time and the report is a snapshot up to the prior Tuesday. That means it is a lagged report - by the time it is released it is a few days out of date. For longer term trades where you hold positions for weeks this is of course still pretty helpful information.
As well as the absolute level (is the speculative market net long or short) you can also use this to pick up on changes in positioning.
For example if bad news comes out how much does the net short increase? If good news comes out, the market may remain net short but how much did they buy back?
A lot of traders ask themselves “Does the market have this trade on?” The positioning data is a good method for answering this. It provides a good finger on the pulse of the wider market sentiment and activity.
For example you might say: “There was lots of noise about the good employment numbers in the US. However, there wasn’t actually a lot of position change on the back of it. Maybe everyone who wants to buy already has. What would happen now if bad news came out?”
In general traders will be wary of entering a crowded position because it will be hard to attract additional buyers or sellers and there could be an aggressive exit.
If you want to enter a trade that is showing extreme levels of positioning you must think carefully about this dynamic.

Bet correlation

Retail traders often drastically underestimate how correlated their bets are.
Through bitter experience, I have learned that a mistake in position correlation is the root of some of the most serious problems in trading. If you have eight highly correlated positions, then you are really trading one position that is eight times as large.
Bruce Kovner of hedge fund, Caxton Associates
For example, if you are trading a bunch of pairs against the USD you will end up with a simply huge USD exposure. A single USD-trigger can ruin all your bets. Your ideal scenario — and it isn’t always possible — would be to have a highly diversified portfolio of bets that do not move in tandem.
Look at this chart. Inverted USD index (DXY) is green. AUDUSD is orange. EURUSD is blue.

Chart from TradingView
So the whole thing is just one big USD trade! If you are long AUDUSD, long EURUSD, and short DXY you have three anti USD bets that are all likely to work or fail together.
The more diversified your portfolio of bets are, the more risk you can take on each.
There’s a really good video, explaining the benefits of diversification from Ray Dalio.
A systematic fund with access to an investable universe of 10,000 instruments has more opportunity to make a better risk-adjusted return than a trader who only focuses on three symbols. Diversification really is the closest thing to a free lunch in finance.
But let’s be pragmatic and realistic. Human retail traders don’t have capacity to run even one hundred bets at a time. More realistic would be an average of 2-3 trades on simultaneously. So what can be done?
For example:
  • You might diversify across time horizons by having a mix of short-term and long-term trades.
  • You might diversify across asset classes - trading some FX but also crypto and equities.
  • You might diversify your trade generation approach so you are not relying on the same indicators or drivers on each trade.
  • You might diversify your exposure to the market regime by having some trades that assume a trend will continue (momentum) and some that assume we will be range-bound (carry).
And so on. Basically you want to scan your portfolio of trades and make sure you are not putting all your eggs in one basket. If some trades underperform others will perform - assuming the bets are not correlated - and that way you can ensure your overall portfolio takes less risk per unit of return.
The key thing is to start thinking about a portfolio of bets and what each new trade offers to your existing portfolio of risk. Will it diversify or amplify a current exposure?

Crap trades, timeouts and monthly limits

One common mistake is to get bored and restless and put on crap trades. This just means trades in which you have low conviction.
It is perfectly fine not to trade. If you feel like you do not understand the market at a particular point, simply choose not to trade.
Flat is a position.
Do not waste your bullets on rubbish trades. Only enter a trade when you have carefully considered it from all angles and feel good about the risk. This will make it far easier to hold onto the trade if it moves against you at any point. You actually believe in it.
Equally, you need to set monthly limits. A standard limit might be a 10% account balance stop per month. At that point you close all your positions immediately and stop trading till next month.

Be strict with yourself and walk away
Let’s assume you started the year with $100k and made 5% in January so enter Feb with $105k balance. Your stop is therefore 10% of $105k or $10.5k . If your account balance dips to $94.5k ($105k-$10.5k) then you stop yourself out and don’t resume trading till March the first.
Having monthly calendar breaks is nice for another reason. Say you made a load of money in January. You don’t want to start February feeling you are up 5% or it is too tempting to avoid trading all month and protect the existing win. Each month and each year should feel like a clean slate and an independent period.
Everyone has trading slumps. It is perfectly normal. It will definitely happen to you at some stage. The trick is to take a break and refocus. Conserve your capital by not trading a lot whilst you are on a losing streak. This period will be much harder for you emotionally and you’ll end up making suboptimal decisions. An enforced break will help you see the bigger picture.
Put in place a process before you start trading and then it’ll be easy to follow and will feel much less emotional. Remember: the market doesn’t care if you win or lose, it is nothing personal.
When your head has cooled and you feel calm you return the next month and begin the task of building back your account balance.

That's a wrap on risk management

Thanks for taking time to read this three-part chapter on risk management. I hope you enjoyed it. Do comment in the replies if you have any questions or feedback.
Remember: the most important part of trading is not making money. It is not losing money. Always start with that principle. I hope these three notes have provided some food for thought on how you might approach risk management and are of practical use to you when trading. Avoiding mistakes is not a sexy tagline but it is an effective and reliable way to improve results.
Next up I will be writing about an exciting topic I think many traders should look at rather differently: news trading. Please follow on here to receive notifications and the broad outline is below.
News Trading Part I
  • Introduction
  • Why use the economic calendar
  • Reading the economic calendar
  • Knowing what's priced in
  • Surveys
  • Interest rates
  • First order thinking vs second order thinking
News Trading Part II
  • Preparing for quantitative and qualitative releases
  • Data surprise index
  • Using recent events to predict future reactions
  • Buy the rumour, sell the fact
  • The mysterious 'position trim' effect
  • Reversals
  • Some key FX releases
***

Disclaimer:This content is not investment advice and you should not place any reliance on it. The views expressed are the author's own and should not be attributed to any other person, including their employer.
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Tech only Portfolios are too RISKY

I assume those of you on this sub are investing, not gambling. I also assume that y'all care about risk. If so, please read on.
I feel like several times a day I see a "portfolio" advice post for "portfolios" that is 100% tech. IMO, these portfolios will perform poorly and have extreme amounts of risk. In a loose sense, portfolios seek to balance many different equities to achieve an optimal risk/reward. This is done through diversification. If you're 100% tech (especially if it's only US tech) you have little to no diversification. If you want extreme risk, you're better off trading individual stock, options or even FOREX.
Why: There is a reasonable chance of a tech correction


Import case study (thanks investing)
Will all this actually happen?: Maybe, maybe not. I just wanted to show y'all that it's not unreasonable. Hence you must diversify to minimize downside risk.
What to do :
Even the pros love tech, but they're not 100% tech: https://wallethub.com/edu/hedge-fund-stocks/38113/
I'm long tech, buy it frequently and it makes up ~15-20% of my portfolio.
Edit: Nice example, I looked at what happened right before the last tech crash:
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=2000&firstMonth=8&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&portfolioNames=true&portfolioName1=Tech+Mutual+Fund&portfolioName2=SP+500&portfolioName3=Mix&symbol1=FSPTX&allocation1_1=100&allocation1_3=50&symbol2=SPY&allocation2_2=100&allocation2_3=50

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6 Price Action Retracement Entry Types You Need To Know

You've presumably heard "retracement" or "follow" much of the time in case you're keen on exchanging the monetary business sectors. Be that as it may, do you really understand what value retracements are, the reason they're so significant and how to appropriately exploit them? Maybe not, yet regardless of whether you do, the present exercise will reveal new insight into how to use these incredibly amazing business sector occasions…
A retracement in a market is a pretty simple idea to characterize and comprehend. Basically, it's actually what it seems like: a period when cost remembers back on an ongoing move, either up or down. Consider "remembering your means"; returning a similar way you came. It's fundamentally an inversion of an ongoing value move.
For what reason are retracements significant? For various reasons: They are occasions to enter the market at a "superior value", they take into account ideal stop misfortune arrangement, improved danger prize and then some. A remember passage is more traditionalist than a "market section" for instance and is viewed as a "more secure" passage type. Eventually, the objective of a dealer is get the best passage cost and oversee hazard on a par with conceivable while additionally expanding restores; the retracement section is a device that permits you to do every one of the three of these things.
This exercise will cover all parts of exchanging retracements and will assist you with understanding them better and put them to use to ideally improve your general exchanging execution.
Presently, how about we examine a portion of the Pros and Cons of retracement exchanging before we take a gander at some model graphs…
Professionals of Retracement Trading
We should discuss a portion of the many "Geniuses" of retracement exchanging. Frankly, retracement exchanging is fundamentally how you exchange like an expert rifleman, which, on the off chance that you've followed me for any timeframe, you know is my favored strategy for exchanging.
Higher Probability Entries – The very idea of a draw back or backtrack implies that cost is probably going to keep moving toward the underlying move when the follow closes. Henceforth, on the off chance that you see a solid value activity signal at a level after a retracement, it's high-likelihood passage since all signs are highlighting value bobbing starting there. Presently, it doesn't generally occur, however hanging tight for a remember to a level with a sign, is the most elevated likelihood way you can exchange. Markets pivot back to the "signify" or "normal" cost again and again; this is clear by taking a gander at any value outline for a couple of moments. Along these lines, when you see this revolution or backtrack occur, begin searching for a section point there in light of the fact that it's a lot higher-likelihood passage point than just entering "at market" like most brokers do.
Less Premature Stop-Outs – A retracement permits greater adaptability with stop misfortune arrangement. Essentially, in that you can put the prevent further away from any territory on the diagram that is probably going to be hit (if the exchange you're taking is to exercise by any stretch of the imagination). Setting prevents further away from key levels or moving midpoints or further away from a pin bar high or low for instance, gives the exchange a higher possibility of working out.
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Better Risk Rewards – Retracement passages hypothetically permit you to put a "more tight" stop misfortune on an exchange since you're entering more like a key level or you're entering at a pin bar half level on an exchange section stunt passage for instance. In this way, should you decide to do as such, you can put a stop a lot nearer than if you entered an exchange that didn't occur after a follow or on the off chance that you entered a pin bar exchange at the high or low of the pin, for instance. Model: a 100 pip stop and 200 pip target can undoubtedly turn into a 50 pip stop and 250 pip focus on a follow passage. Note: you don't have to put a more tight stop, it's discretionary, however the choice IS There on a backtrack section in the event that you need it. The other option, utilizing a standard width stop has the benefit of diminishing the odds of an untimely stop out.
A danger prize can likewise be somewhat expanded regardless of whether you utilize a standard stop misfortune, rather than a "more tight one". Model: a 100 pip stop and a 200 pip target can without much of a stretch become a 100 pip stop and a 250 pip target. Why? This is on the grounds that a remember passage lets you enter the market when it has "more space" to run toward you, because of the way that cost has pulled back and it consequently has more separation to move before it follows again when contrasted with in the event that you entered at a "more awful cost" further up or down.
Cons of Retracement Trading
Obviously I will be straightforward with you and told you a portion of the "cons" of retracement exchanging, there are a not many that you ought to know about. Notwithstanding, this doesn't mean you shouldn't attempt to learn retracement exchanging and add it to your exchanging "tool stash", in light of the fact that the geniuses FAR exceed the cons.
More Missed Trades: Good exchanges will "move away" now and then when hanging tight for a retracement that doesn't occur, for instance. This can test your nerves and exchanging attitude and will bother even the best dealers. In any case, trust me, passing up exchanges isn't the most exceedingly terrible thing on the planet and it's smarter to pass up certain exchanges than to over-exchange, that is without a doubt.
Less Trades in General – A great deal of the time, advertises just don't remember enough to trigger the more moderate passage that returns with a force. All things being equal, they may simply prop up with insignificant retracements. This implies you will have less opportunities to exchange by and large when contrasted with somebody who isn't essentially hanging tight for follows.
Because of the over two focuses, retracement exchanging can be disappointing and takes unimaginable order. In any case, in the event that you build up this order you'll be WELL in front of the majority of losing dealers thus retracement exchanging can assist you with building up the control you should need to prevail at exchanging regardless of what passage technique you wind up utilizing.
Retracements Provide Flexibility in Stop Loss Placements
Setting your stop misfortune at some unacceptable point can get you taken out of an exchange rashly, that you in any case were spot on. By figuring out how to sit tight for market pull backs or retracements, you won't just enter the market at a higher-likelihood point, however you'll likewise have the option to put your stop misfortune at a lot more secure point on the diagram.
Regularly, dealers get debilitate in light of the fact that they get halted out of an exchange that actually they were spot on. Putting a stop misfortune at some unacceptable point on a diagram can get you removed from an exchange before the market truly gets an opportunity to get moving toward you. A retracement presents a clever answer for this issue by permitting you to put a more secure and more extensive stop misfortune on an exchange, giving you a superior possibility at bringing in cash on that exchange.
At the point when a market follows or pulls back, particularly inside a moving business sector, it is giving you an occasion to put your stop misfortune at a point on the outline that is significantly more averse to take you out of an exchange. Since most remembers occur into help or opposition levels, you can put the stop misfortune further past that level (more secure) which is fundamentally less inclined to be hit than if it was nearer to the level. Utilizing what I call a "standard" stop misfortune (not a tight one) in this case will give you the most obvious opportunity at keeping away from an untimely take out of an exchange.
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10 Secrets The Trading Industry Doesn’t Want You To Know About

Today’s lesson goes to be somewhat controversial and should ruffle some feathers. I shall blow wide open and debunk tons of the knowledge you've got presumably been exposed to the present far in your trading journey.
The average trader is out there walking through a confusing and conflicting maze of data from a spread of sources including; blogs, forums, broker websites, books, e-books, courses and YouTube videos.
With of these learning resources available there's naturally getting to be some excellent and a few very bad information, but actually , there just isn’t how for many aspiring traders to understand what to concentrate to, who to concentrate to, or what information is useful and what information is non-beneficial.
I’m not getting to pretend that there's how for an aspiring trader to filter this giant sea of data composed by of these resources and mentors out there, because there simply isn’t. knowledgeable trader with 10,000 hours of experience might stand an opportunity of deciding the great from the bad and therefore the valid from the invalid. However, you, the beginner or intermediate trader simply won’t possess that filtering ability yet.
Becoming ‘Non-Average’
As traders, we concede to our instinctive feelings of social trustworthiness supported what we see and listen to , often to our extreme detriment. we frequently tend to require a leap of religion with our mentors and have a habit of taking things said to us at face value. we would like to hold close information that resonates with us and is sensible to us, especially if it’s delivered by a well-known source that we've come to understand and trust.
The ‘average trader’s brain’ is usually trying to find a shortcut due to the overwhelming desire to form money and be free. The brain wants to urge a winning result immediately with the smallest amount amount of effort possible. If you would like to ever make it as a professional trader or investor, I suggest you are doing everything you'll to avoid thinking with the ‘average trader’s brain‘ and begin being ‘non-average’. meaning becoming far more aware, thinking outside the box more and questioning and filtering the knowledge you read and watch. most significantly , slowing everything all down!
This now begs the apparent question…how does one even know what I’m close to write during this lesson is actually valid and factual? How are you able to really be sure? the reality is unless you've got followed me and my posts on this blog for an extended time and know me and know my work, then you can’t really make certain , and that i don’t expect you to easily believe it at face value. If you would like to return back and re-read this lesson during a few weeks, or a couple of months, or a couple of years, after you work out that i'm somebody worth taking note of about trading OR that i'm somebody not worth taking note of about trading, then so be it.
So with a degree of healthy skepticism, I ask you to think about the below list of eye-opening secrets that professional traders and therefore the trading industry, don’t want you to understand about or understand. I hope it helps…
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FOREX isn’t the sole market the Professionals trade
The FX market is large , with billions of dollars per day changing hands. It can cause you to great money if you recognize what you’re doing OR it can send you broke if you don’t. It’s a really popular market to trade globally, BUT it’s not the sole market the professional’s trade and it’s not always the simplest market to trade either.
A note on leverage:
The brokers and platform providers want you to trade FX on high leverage because the profit margins are very high for them. However, if you trade FX on lower leverage, the profit margins shrink dramatically for them. once you trade FX, start brooding about what can fail rather than just brooding about what can go right. I suggest avoiding stupidly high leverage like 400 to 1, as this will be very dangerous for you if the market moves quickly or experiences a price gap and your stop-loss orders aren’t executed at the worth you set. A more sensible leverage level would be 100 to 1 or 200 to 1, but any higher seems crazy. (Using an excessive amount of leverage is what wiped tons of traders out during Swiss Bank Crisis in 2015, The Brexit choose 2016 and therefore the Currency flash crash in early 2019).
Broaden your view:
Going forward, it'll serve you well in your trading career to start out watching a spread of worldwide markets including FX, Stock Indicies and Commodities. additionally to FX, I personally trade GOLD (XAUUSD), S&P500 Index USA, the SPI200 Index Australia, and therefore the Hang Seng Index Hong Kong , and sometimes individual stocks on various global exchanges. In short, there's more to the trading world than simply FX. I discuss the foremost popular markets I trade this lesson here.
Day trading isn’t what Pro trading really is
The internet is crammed with marketing trying to convince folks that the definition of a trader may be a one that spends all day actively trading in and out of the market on a brief term basis, all whilst living the life-style of a Wall St millionaire. there's a significant agenda within the industry to push this story to the masses, it's been relentless for many years .
I am yet to satisfy one successful day trader who is consistent over the future and that i have almost 25,000 students and 250,000 readers on this blog. i'm not saying there isn’t a couple of out there, but 99.9% of the people that do this sort of trading or attempt to live up to the standard day trader stereotype are getting to fail and perhaps even harm themselves financially or mentally. Watching a screen all day and searching for trades constantly is that the like a compulsive gambler playing roulette during a casino.
The successful traders i do know of (myself included) are watching higher time frames and longer time horizons (minimum 4-hour chart timeframes and predominantly daily chart time frames). they need no restriction on how long they're looking to carry a trade for and that they tend to let the trades find them. The professionals i do know , don't day trade, they are doing not watch screens all day, they are doing not search for trades constantly. they're going to typically fall under the category of a swing trader, trend trader or position trader.
The obvious paradox and conflicting reality within the ‘day trader story’ is blatantly obvious. How does a trader who is consistently watching a screen and constantly trading have time to enjoy his life and live the lifestyle? They chose to trade as a profession to possess a life, they didn’t choose it to observe a screen 24/5.
Here are some points to think about that employment against the so-called ‘ day trader’:
The shorter the time-frame the more noise and random price movement there's , thus increasing your chance of simply being stopped out of the trade.
Your ‘trading edge’ features a higher chance of yielding a result for you if you’re not trading within the intraday noise.
The same trading edge doesn't work or produce an equivalent results on a 5 min chart compared to a Daily chart.
Commissions and spreads churn your account, therefore the more you trade the more you lose in broker platform costs. (I will mention this below)
Risk-Reward ratios aren't relative on shorter and longer time frames. Statistical average volatility across different time periods also as natural market dynamics play an enormous role during this . there's much more weight behind higher time frames than lower timeframes.
Great trades take time because the market moves slower than most of the people ever anticipate. Trading from the upper timeframes and holding trades for extended time periods will provide you with greater opportunities to ascertain trades mature into big winners. However, shorter timeframes don’t provide you with this same opportunity fairly often .
submitted by LondonForex to u/LondonForex [link] [comments]

EcoFi: The Future of DeFi

EcoFi: The Future of DeFi
The cryptocurrency markets are evolving and changing at an alarming rate. New projects are created on a daily basis in support of change from the old monetary system we have all come to know and hate. Immutable code, applications, decentralized governance entities and exchanges are bringing out the best of blockchain, but sometimes these projects start off with a loud eruption of activity and volume only to fade slowly when development ends or hits a standstill, or even when a clone with more innovation becomes more popular. This is a common problem in the cryptocurrency space that has effectively created and then terminated thousands of legitimate projects and ideas looking to make a difference in this new uncharted world of cryptocurrency. Innovation always catches up, this time in the form of EcoFi.

https://preview.redd.it/db42m7kcisu51.png?width=6510&format=png&auto=webp&s=f375bdf204479b7c869ecd9349f5071b068c2552

EcoFi bills itself as "an open-sourced, permission-less and censorship-resistant protocol built to power safe and responsible innovation in the Decentralized Finance space." EcoFi is focusing on putting an end to the vicious cycle or life and death of new projects by rewarding the communities strength and adoption. It plans on accomplishing this by creating a unique marketplace that builds on the principles of DeFi token pairs and an exclusive marketplace that is housed on the EcoFi website.

https://preview.redd.it/q11uhakbisu51.png?width=4234&format=png&auto=webp&s=ee7ced8f4201323e19f51fa97f17c7d315ebc9d1
The EcoFi economy will consist of 3 tokens: ECO, EcoFi Genesis Token (EGT), and Sprout (SPRT) to bring about an active and innovative marketplace.

ECO has a total supply of 10,000,000 tokens and this supply is capped. ECO is earned during limiting periods which will allow you to farm it. ECO presents an opportunity to pair it with other tokens to create new and diverse liquidity pools. Staking Liquidity tokens via the EcoFi website, users can earn SPRT tokens as rewards. These tokens can also be purchased on Uniswap. ECO's other utility will include using it to obtain unique farm-able NFT's along with curation of NFT's along with other algorithmic-ally backed assets.

EcoFi Genesis Token (EGT) will act as the governance token for the EcoFi ecosystem. It will allow holders to vote and help decide on future development, integration, and decision making in regards to the future of the ecosystem. EGT will also be utilized as a tool to receive airdropped ECO. The DAO Governance platform will be released at a later date. Early adopters and utilizers of the EcoFi economy will be rewarded in both EGT and ECO for helping share the EcoFi vision and helping build its community.

Sprout (SPRT) is the token that is rewarded for staking your ECO. As your yield begins to sprout up from staking, you will be eligible to earn highly unique NFT's not available for purchase. These NFT's will vary in scope, but will include connections to real world assets and even rare easter-egg NFT's.

The EcoFi tokens will be distributed as described below:
- 50% will be given away for public contributions
- 10% will be set aside for use as Eco Genesis Tokens
- 20% will be utilized for airdrops and farming
- 15% will be used for the Ecosystem and marketing
- 5% will be sent to the core development team
https://preview.redd.it/x6n4ywi9isu51.jpg?width=852&format=pjpg&auto=webp&s=af563b39b1063792f933d933e0af6e9c16d13b64

It is important to note that from 10/23/20 to 11/3 is the EGT airdrop period. During this period, users will be airdropped 1 ECO for every 100 EGT owned. The public contribution period will also last during the same time period and it will include an ECO member sale of 5,000,000 ECO. After the DAO is live, you will be able to use your EGT to vote.
https://preview.redd.it/5fftge78isu51.jpg?width=924&format=pjpg&auto=webp&s=9469ad55f3a4727d2a018fd5e0f75b27fe676d1a

The team behind EcoFi includes a diverse group of developers, artists, traders, and investors that have been a part of the Forex and Cryptocurrency landscape since 2014 with a focus on Ethereum's blockchain and environment. The team has top level Ethereum development skills which will allow for a productive and smooth launch.

https://preview.redd.it/f0h6zik5isu51.jpg?width=931&format=pjpg&auto=webp&s=8eca52db558901fdd20037a54f4af4885a437996
Creating a sustainable and active Cryptocurrency ecosystem is difficult over time. Providing a solution via community building/tokenomical development via a decentralized self governance reward system can be the answer to the well known project burnout problem. Unique tokenomics are a very big draw for EcoFi. Adding in unique NFT’s while also planning for the implementation of real world NFT use is not only innovative but setting EcoFi up for a strong competitive build which could potentially pave the way for further NFT usecase. Following the EcoFi community and contributing may turn into one of DeFi’s biggest game-changers.

Pertinent EcoFi Links:
- Litepaper: https://ecofi.io/ECOFI\_LITEPAPER.pdf
- Contact: [email protected]
- Medium: https://medium.com/@EcoFinance/ecofi-eclisping-the-possibilites-of-defi-64b7dcf23fc1
- Website: https://ecofi.io/
- Twitter: https://twitter.com/finance\_eco
- YouTube: https://youtube.com/channel/UCn\_pnNgrKWTsLSP5Jhi7MaQ
- Telegram: https://t.me/EcoFiOfficial
- Airdrop: https://t.me/ecofi\_airdrop\_bot


(I write articles and reviews for legitimate, interesting, up and coming cryptocurrency projects. Feel free to PM me to review your project. Thank you!)
-------------------
Disclaimer: This is not financial advice. The sole purpose of this post/article is to provide and create an informative and educated discussion regarding the project in question. Invest at your own risk.
submitted by Chrisc9234 to CryptoCurrencies [link] [comments]

Reddit Forex Scalping: 4 Strategies To Make Money Trading Forex For Newbies

Reddit Forex Scalping: 4 Strategies To Make Money Trading Forex For Newbies

4 Forex and Stocks Scalping Strategies Reddit

We take a look at scalping trading strategies, as well as some useful indicators.
https://preview.redd.it/rb33l4c42nw51.jpg?width=600&format=pjpg&auto=webp&s=c225b90045dcd566f5a85e09cf51d887a1b69ed7

What does scalping mean?

Scalping is a type of trading strategy designed to profit from small price changes since the benefits of these transactions are obtained quickly and once an operation has become profitable. All forms of trading require discipline, but because the number of trades is so large, and the profits from each trade are so small, a scalper must rigorously stick to their trading system, to avoid large losses that could eliminate dozens. successful operations.
The scalper traders: they will take small profits to take advantage of the gains as they appear. The goal is a successful trading strategy by means of a large number of profitable trades, rather than a few successful trades with large profits.
The scalping of the idea of a better risk exposure as the current time each operation is quite short, which reduces the risk of an adverse event that causes a big move. Furthermore, it is considered that smaller movements are easier to achieve than larger movements and that smaller movements are more frequent than larger ones.
>>> Forex Signals With Unbeatable Performance: Verified Forex Results And 5° Rated On Investing.com |Free Forex Signals Trial: CLICK HERE TO JOIN FOR FREE

The best scalping strategies

  1. Stochastic Oscillator Strategy
  2. Moving average strategy
  3. Parabolic SAR Indicator Strategy
  4. RSI (Relative Strength Index) Strategy

Reddit Forex Scalping Strategies:

1- Scalping trading using the stochastic oscillator

Scalping can be achieved by using the stochastic oscillator. The term stochastic refers to the current price point relative to its range over a recent period of time. When comparing the price of a security with its recent range, a stochastic tries to provide potential changes. The scalping using said oscillator aims to capture the movements of a market trend, ie, one that moves up or down accordingly. Prices tend to close near the extremes of the recent range before a change occurs, as in the example seen below:
https://preview.redd.it/7wy3ixui2nw51.png?width=1397&format=png&auto=webp&s=91f50d685dd4841015c51322cee9fb90701aad33
the chart above, for Brent over a three minute period, we can see that the price rises even higher, and the lows in the stochastic (marked with arrows) provide entry points for long trades, when the black line of% K is crosses over with the red dotted line of% D. The operation is exited when the stochastic reaches the maximum value of its range, above 80, when a bearish convergence appears, when the line of% K crosses below with% D.
Rather, short positions would be used in a downtrend market, as in the example below. This time, instead of 'buying dips', we are 'selling raises'. Therefore, we will look for a bearish convergence in the direction of the trend, as highlighted below:
https://preview.redd.it/y3qqvejs2nw51.png?width=1398&format=png&auto=webp&s=627f3ded47e901c1f9ea97d5416caeea49b9dc3f

2- Scalping using the moving average

Another method is to use moving averages, usually with two relatively short-term and one longer-term to indicate the trend.
In the examples below, on a three-minute chart of the EUR / USD pair , we are using 5- and 20-period moving averages in the short term, and a further 200-period moving averages in the long term. In the first chart, the longer-term moving average is rising, so we expect the five-period moving average to cross above the 20-period moving average, and then we take positions in the direction of the trend. These are marked with an arrow.
https://preview.redd.it/22jquy1z2nw51.png?width=1499&format=png&auto=webp&s=ed4f724384b86f95dff584c596e25652f23f240d
In the second example, the long-term moving average is declining, so we look for short positions when the price crosses below the 5-period moving average, which has already crossed below the 20-period moving average.
https://preview.redd.it/0tl7mky23nw51.png?width=1496&format=png&auto=webp&s=ca7b44138901537185d9e0dbd639a799407ced08
It is important to remember that these trades are trending and that we are not trying to find and capture every move. As in any scalping strategy, it is essential to have good risk management with stops, which is vital to avoid large losses that could eliminate many small gains quickly.
>>> Forex Signals With Unbeatable Performance: Verified Forex Results And 5° Rated On Investing.com |Free Forex Signals Trial: CLICK HERE TO JOIN FOR FREE

3- Scalping with the use of the parabolic SAR indicator

The Parabolic SAR is an indicator that highlights the direction in which the market is moving and also tries to provide entry and exit points. SAR is the acronym for ' stop and reversal ', which means stop and revocation. The indicator is a series of points placed above or below the price bars. One point below the price is bullish and one point above it is bearish.
A change in the position of the points suggests that there is going to be a change in trend. The chart below shows the DAX on a five minute chart; You can open short trades when the price moves below the SAR points and long when the price moves above them. As you can see, some trends are quite widespread and at other times a trader will encounter many trades that generate losses.
https://preview.redd.it/35uo837g3nw51.png?width=1498&format=png&auto=webp&s=f020a461c6ff1f8d49fab381da0713b1de75dbf7

4- Scalping using the RSI

Lastly, investors can use an RSI strategy to find entry points that go with the prevailing trend. In the first example, the price is rising steadily, with three higher overall moving averages.
Downs in the trend are to be bought, so when the RSI drops to 30 and then moves above this line, a possible entry point is created.
https://preview.redd.it/fkk1df2k3nw51.png?width=1499&format=png&auto=webp&s=8e9b4c7b1af0d0732793ddf5dc462aeaa7321dc9
Conversely, when the RSI moves to 70 and then begins to decline within the downtrend, an opportunity is created to 'sell the rally', as we have seen in the example below.
https://preview.redd.it/dlq4ge7p3nw51.png?width=1497&format=png&auto=webp&s=10eb4baf8bd92a4e0e33905464859b73871a6201
>>> Forex Signals With Unbeatable Performance: Verified Forex Results And 5° Rated On Investing.com |Free Forex Signals Trial: CLICK HERE TO JOIN FOR FREE

What do you have to know before starting scalping strategies Reddit?

The scalping requires the trader has an iron discipline, but also very demanding as far as time is concerned. Although long-term times and smaller sizes allow investors to move away from their platforms, given that there are few possible entries and can be controlled remotely, scalping requires the investor's full attention.
Possible entry points can appear and disappear very quickly and therefore a trader must be very vigilant about his platform. For individuals who have a day job or other activities, scalping is not necessarily an ideal strategy. On the other hand, long-term operations with higher profit objectives are a more suitable option.
It is difficult to execute a successful scalping strategy. One of the main reasons is that many operations need to be performed over time. Some research in this regard usually shows that more frequent investors only lose money faster, and have a negative capital curve. Instead, most investors are more successful and reduce their time commitments to trading, and even reduce stress by using long-term strategies and avoiding scalping strategies.
The scalping requires quick responses to market movements and the ability to forgo an operation if the exact moment has passed. 'Chase' trades, along with a lack of stop-loss discipline, are the key reasons why scalpers are often unsuccessful. The idea of ​​only being in the market for a short period of time sounds appealing, but the chances of being stopped out on a sudden move with a quick correction are high.
Trading is an activity that rewards patience and discipline. Although those who are successful with scalping do demonstrate these qualities, they are a small number. Most investors do better with a long-term view, smaller position sizes, and a less frenetic pace of activity.
>>> Forex Signals With Unbeatable Performance: Verified Forex Results And 5° Rated On Investing.com |Free Forex Signals Trial: CLICK HERE TO JOIN FOR FREE
submitted by kayakero to makemoneyforexreddit [link] [comments]

EcoFi: The Future of DeFi

The cryptocurrency markets are evolving and changing at an alarming rate. New projects are created on a daily basis in support of change from the old monetary system we have all come to know and hate. Immutable code, applications, decentralized governance entities and exchanges are bringing out the best of blockchain, but sometimes these projects start off with a loud eruption of activity and volume only to fade slowly when development ends or hits a standstill, or even when a clone with more innovation becomes more popular. This is a common problem in the cryptocurrency space that has effectively created and then terminated thousands of legitimate projects and ideas looking to make a difference in this new uncharted world of cryptocurrency. Innovation always catches up, this time in the form of EcoFi.

EcoFi bills itself as "an open-sourced, permission-less and censorship-resistant protocol built to power safe and responsible innovation in the Decentralized Finance space." EcoFi is focusing on putting an end to the vicious cycle or life and death of new projects by rewarding the communities strength and adoption. It plans on accomplishing this by creating a unique marketplace that builds on the principles of DeFi token pairs and an exclusive marketplace that is housed on the EcoFi website.

The EcoFi economy will consist of 3 tokens: ECO, EcoFi Genesis Token (EGT), and Sprout (SPRT) to bring about an active and innovative marketplace.

ECO has a total supply of 10,000,000 tokens and this supply is capped. ECO is earned during limiting periods which will allow you to farm it. ECO presents an opportunity to pair it with other tokens to create new and diverse liquidity pools. Staking Liquidity tokens via the EcoFi website, users can earn SPRT tokens as rewards. These tokens can also be purchased on Uniswap. ***ECO'***s other utility will include using it to obtain unique farm-able NFT's along with curation of NFT's along with other algorithmic-ally backed assets.

EcoFi Genesis Token (EGT) will act as the governance token for the EcoFi ecosystem. It will allow holders to vote and help decide on future development, integration, and decision making in regards to the future of the ecosystem. EGT will also be utilized as a tool to receive airdropped ECO. The DAO Governance platform will be released at a later date. Early adopters and utilizers of the EcoFi economy will be rewarded in both EGT and ECO for helping share the EcoFi vision and helping build its community.

Sprout (SPRT) is the token that is rewarded for staking your ECO. As your yield begins to sprout up from staking, you will be eligible to earn highly unique NFT's not available for purchase. These NFT's will vary in scope, but will include connections to real world assets and even rare easter-egg NFT's.

The EcoFi tokens will be distributed as described below:
- 50% will be given away for public contributions
- 10% will be set aside for use as Eco Genesis Tokens
- 20% will be utilized for airdrops and farming
- 15% will be used for the Ecosystem and marketing
- 5% will be sent to the core development team

It is important to note that from 10/23/20 to 11/3 is the EGT airdrop period. During this period, users will be airdropped 1 ECO for every 100 EGT owned. The public contribution period will also last during the same time period and it will include an ECO member sale of 5,000,000 ECO. After the DAO is live, you will be able to use your EGT to vote.

The team behind EcoFi includes a diverse group of developers, artists, traders, and investors that have been a part of the Forex and Cryptocurrency landscape since 2014 with a focus on Ethereum's blockchain and environment. The team has top level Ethereum development skills which will allow for a productive and smooth launch.

Creating a sustainable and active Cryptocurrency ecosystem is difficult over time. Providing a solution via community building/tokenomical development via a decentralized self governance reward system can be the answer to the well known project burnout problem. Unique tokenomics are a very big draw for EcoFi. Adding in unique NFT’s while also planning for the implementation of real world NFT use is not only innovative but setting EcoFi up for a strong competitive build which could potentially pave the way for further NFT usecase. Following the EcoFi community and contributing may turn into one of DeFi’s biggest game-changers.

Pertinent EcoFi Links:
- Litepaper: https://ecofi.io/ECOFI\_LITEPAPER.pdf
- Contact: [email protected]
- Medium: https://medium.com/@EcoFinance/ecofi-eclisping-the-possibilites-of-defi-64b7dcf23fc1
- Website: https://ecofi.io/
- Twitter: https://twitter.com/finance\_eco
- YouTube: https://youtube.com/channel/UCn\_pnNgrKWTsLSP5Jhi7MaQ
- Telegram: https://t.me/EcoFiOfficial
- Airdrop: https://t.me/ecofi\_airdrop\_bot


(I write articles and reviews for legitimate, interesting, up and coming cryptocurrency projects. Feel free to PM me to review your project. Thank you!)
-------------------
Disclaimer: This is not financial advice. The sole purpose of this post/article is to provide and create an informative and educated discussion regarding the project in question. Invest at your own risk.
submitted by Chrisc9234 to CryptoMoonShots [link] [comments]

5%ers Prop Shop Forex : $24,000 Funded Account Qualification Stage.

5%ers Prop Shop Forex : $24,000 Funded Account Qualification Stage.

Entry Level Testing

Follow results here.


Starting Fee - $270
Starting Funding - $6,000
Live Account - Yes
Required Profit to Pass - $375
Duration - Minimum of 20 days. Maximum time of 6 months to hit profit target.

Risk Restrictions


Maximum Net Loss - $250
Maximum Risk in Stop Loss - 1.5%
Maximum Size of Position - 0.30 lots
Hold Overnight - Yes
Hold Over Weekend - Yes
News Trading Restrictions - News trading is not strictly prohibited.


Notes

5%ers give you a live account from sign up. You can trade and begin to build up real earnings on day one. To qualify to be paid you need to pass the evaluation phase by hitting 6% ($375) profit. It takes at least 20 days to pass (Even if you hit target early) and you have up to 6 months to do it (So it can be passed with an average of 1% a month).
5%ers have a liberal approach to trader flexibility. The only hard and fast rule that needs to be followed is the maximum net loss. This is 4% of the starting balance (Making this far easier than high water mark systems). Traders can use some discretion on their money management to achieve this, but more aggressive trading will mean your profit targets to progress will increase.
Using conservative risk (Complying with the risk restrictions listed above) can lead to lower profit targets to progress (And account size doubles each time you hit a profit target, so this is a good thing).

5%ers main form of communication with their traders is via email. You're expected to give an active email address that you will check regularly and to respond to any messages in a timely manner.

Thoughts on Passing 5%ers Forex Funding Evaluation Stage


For experienced traders passing the evaluation stage should be easy enough and something that can be done within 3 months (Or quicker, depending on strategy and market conditions). The fact the 4% drawdown limit is off the starting balance and not a trailing high water mark give a lot of leeway for a good trader if they can get a bit ahead.

For somewhat experienced traders passing the evaluation stage is achievable if you can apply solid risk management and a strategy that has a winning edge. Having 6 months in which to complete it and the only stipulation if you can not lose $250 off the starting $6,000 mean as long as you keep lot sizing small you can stay alive long enough to hit the target.

For new traders since trading in general is hard, you're going to find stipulated risk conditions very hard. There is a fair chance for newer traders to pass this (Given it's a lot target over 6 months) but there is a higher likelihood of not passing, meaning you lose your $270 evaluation fee. I do not know the stats, but I'd assume a lot of new traders do not pass. It's probably worth getting experience first.


On boarding Process


Getting started with 5%ers Forex funding was and smooth on boarding. I made my payment via PayPal of $270. I was sent a welcome email and details to log into a back office. My account was processing for a while, and then after 30 minutes to an hour I was sent MT4 login details to a funded account of $6,000 with a $250 loss limit. I could trade within 2 hours of signing up.

Reward on Pass


Get paid 50% of the profits made. Account is increased 400% to $24,000. Each 10% made the account will be doubled again up to a maximum of $1.25 million.

Content from Welcome Email


https://preview.redd.it/41m5zg1q7tu51.png?width=572&format=png&auto=webp&s=8cdb9709335e5f722590246d63effafc56961ce6
https://preview.redd.it/slh5rcfr7tu51.png?width=621&format=png&auto=webp&s=e1c94838cdfb7156156b8c6a83375014ed383cf3

My Results


Follow results here.

See risk management plan here for 5%ers funded Forex trading.
submitted by db_aum to ForexFunding [link] [comments]

Part IV - My 10 Minutes/Day Trading Strategy

Part IV - My 10 Minutes/Day Trading Strategy
Part IV - Entry Options
Hey everyone, you can find Part III of this series here: https://www.reddit.com/Forex/comments/h97sv7/part_iii_my_10_minutesday_trading_strategy/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
Welcome to Part IV where I will be discussing various entry options. I’ve said this before, but it is worth repeating here as well: identifying a technical setup is one thing. Making money off of that setup is a whole other thing. This is precisely why most signal services fail. While the quality of the signal provider is one thing to consider, the other thing to take into account is that it is very difficult to blindly trade like somebody else - even if they give you their exact entry and exit points.
This is why I really want to focus on figuring out how to make MY strategy work for YOU. I will share with you a few different options for entries based on the strategy’s prototypical setup. But it is 100% on you to figure out what suits your trading style, personality, and lifestyle the best.
Part V will cover exit options.
Part VI will cover risk allocation & management
Let’s get on with it.
Basic Notes On Entries:
We are assuming that all entries are referring to a setup that forms at 5pm EST. I am using 5pm EST because that is when the most trading opportunities have the potential of occurring based on this strategy. It is also when you will see the spreads widen out as the NY Session comes to a close. Therefore, you will not want to take a market order right at 5pm EST. Usually the spreads start narrowing again by 6pm EST.

  1. Market order
  2. Limit order (we will use fibonacci retracements to figure out where to place our limit entry orders)
  3. Stop order (we can set a stop order beyond the setup candle’s high/low. I personally do not recommend this particular method, but I am including it here because one trader that uses this strategy has had success with it and prefers it)
The big difference between the stop order and the other entry types is pretty simple. If you are using a stop order to get into the trade, you will not have as good a risk to reward ratio as a trader that used a limit order to get into the trade. The advantage to using a stop order is that there will be some trades where you do not enter the trade because price never went beyond the high/low point of the setup candle. This means you avoid taking a loss on those trades whereas a trader who used a limit or market order to get into the trade would take a loss. The other advantage is that there may be trade setups where the limit orders don’t get filled but the stop order will. I have NOT statistically tested stop orders vs the other order types. If you want to know what works best for you, it is on you to do the testing.
Okay let’s take a deeper look now into the different ways we can enter:

  1. Limit order: We will draw our fibonacci retracement levels over the setup candle (I have updated the Fibonacci levels I use in Part III. Replaced the old screenshot with the new one with up-to-date levels). We will then look to place our limit orders just below (IF a short trade setup) / above (IF a long trade setup) the 23.6% and 38.2% Retracement levels. When I say just below or above, I am referring to the spread amount at minimum. However more above/below you want to go is up to you and your testing. Sometimes your limit orders get filled rather quickly. Sometimes they take longer (hours longer). I cancel unfilled Retracement orders if price has run to a fiboancci extension level without filling me on the trade. The obvious benefit to limit orders is that you can set your orders and then simply walk away from the screens. IF the setup candle closes past its 23.6% Retracement level then you will only take ONE limit order off the 38.2%.

  1. Market order: Since we will not be taking a market order trade right at 5pm EST, this leaves us with options. Because a market order does not guarantee us a fill price, we do have some flexibility vs taking strict limit orders. The risk you run with using limit orders is that if your price is not met, you do not get filled. So for example, let’s say it is 6pm EST and the spreads begin to narrow once more and price just so happens to trade right around the 23.6% Fibonacci Retracement area. This is a great opportunity to simply take a market order and get into the trade. Let’s say, however, that price never retraced back into the setup candle and it looks like the trade may simply run to its profit target. What do you do? Well, you can still take a market order to get into the trade… OR you can wait to see if price will retrace back into the candle later on… OR you can write the trade off because price has already run to a fibonacci extension level. The bottom line is that if you have flexibility and you have options. **NOTE: On setups that occur outside the 5pm hour, you can obviously take market orders as soon as the setup bar closes without worrying about unusual spreads)**

  1. Stop order: Stop orders are similar to limit orders in that you can set the orders and then walk away from the screens. If you are using stop orders you will not split your order into several parts. You will simply take one order. You will set the stop order just beyond the high/low of the setup candle.
My preferred method of entry:
I like to combine the market and limit entry options myself. Again - assuming a 5pm EST setup here is what I do:

  • Set limit orders at 38.2 and 61.8% Retracement levels and walk away. If I get a notification that my 23.6% order got triggered, I don’t have to come back to my screens. If I don’t get a notification that my 23.6% order got triggered by 6pm EST, I’ll come back to the trade setup and execute a market order and then delete the 23.6% order. I leave the 38.2% limit order as is. Hopefully it triggers, but if it doesn’t then at least I have half my position on. IF it is a situation where the setup candle closes past its 23.6% Retracement then I will only take 1 order, whether it is the market or the limit.
Final Thoughts:
I hope this gives you some insight into how we look at taking entries on the setup. There is a lot of room for additional mix and matching. You could combine limit orders with a stop order for example. I encourage you to play around and experiment with different entry conditions and see what feels best for you.
Some Examples:
*NOTE ON THE EXAMPLES* I have done my best to pick very recent examples so you can go back to this months’ charts to find a lot of these setups

https://preview.redd.it/sqj1haj3g4651.png?width=2820&format=png&auto=webp&s=39b1c99981856e85ab7c662926134994306c1938
https://preview.redd.it/5h1jacj3g4651.png?width=2820&format=png&auto=webp&s=2a7ddda53eca7b1f299d39ff67ff67f1739d8150
https://preview.redd.it/1h688uj3g4651.png?width=2820&format=png&auto=webp&s=d5f96ea18ec208329a18bca6f1b2da04d4eef8b5
https://preview.redd.it/vlhywuj3g4651.png?width=2820&format=png&auto=webp&s=58ae4911a1899f85e2e05f603f0f5856c4cc2c3f
https://preview.redd.it/h2wd4uj3g4651.png?width=2820&format=png&auto=webp&s=f332fe0cd5445d4170f4e6ac0d23351bbf08dae3
submitted by ParallaxFX to Forex [link] [comments]

EcoFi: The Future of DeFi

EcoFi: The Future of DeFi
The cryptocurrency markets are evolving and changing at an alarming rate. New projects are created on a daily basis in support of change from the old monetary system we have all come to know and hate. Immutable code, applications, decentralized governance entities and exchanges are bringing out the best of blockchain, but sometimes these projects start off with a loud eruption of activity and volume only to fade slowly when development ends or hits a standstill, or even when a clone with more innovation becomes more popular. This is a common problem in the cryptocurrency space that has effectively created and then terminated thousands of legitimate projects and ideas looking to make a difference in this new uncharted world of cryptocurrency. Innovation always catches up, this time in the form of EcoFi.

https://preview.redd.it/b6mapsxtjsu51.png?width=6510&format=png&auto=webp&s=89d799c00c9743fe07298d65fac88f6cf5adf998

EcoFi bills itself as "an open-sourced, permission-less and censorship-resistant protocol built to power safe and responsible innovation in the Decentralized Finance space." EcoFi is focusing on putting an end to the vicious cycle or life and death of new projects by rewarding the communities strength and adoption. It plans on accomplishing this by creating a unique marketplace that builds on the principles of DeFi token pairs and an exclusive marketplace that is housed on the EcoFi website.

https://preview.redd.it/akrsqrbujsu51.png?width=4234&format=png&auto=webp&s=8504d94735788ee75fbea54417450c6fdc3ccffb
The EcoFi economy will consist of 3 tokens: ECO, EcoFi Genesis Token (EGT), and Sprout (SPRT) to bring about an active and innovative marketplace.

ECO has a total supply of 10,000,000 tokens and this supply is capped. ECO is earned during limiting periods which will allow you to farm it. ECO presents an opportunity to pair it with other tokens to create new and diverse liquidity pools. Staking Liquidity tokens via the EcoFi website, users can earn SPRT tokens as rewards. These tokens can also be purchased on Uniswap. ***ECO'***s other utility will include using it to obtain unique farm-able NFT's along with curation of NFT's along with other algorithmic-ally backed assets.

EcoFi Genesis Token (EGT) will act as the governance token for the EcoFi ecosystem. It will allow holders to vote and help decide on future development, integration, and decision making in regards to the future of the ecosystem. EGT will also be utilized as a tool to receive airdropped ECO. The DAO Governance platform will be released at a later date. Early adopters and utilizers of the EcoFi economy will be rewarded in both EGT and ECO for helping share the EcoFi vision and helping build its community.

Sprout (SPRT) is the token that is rewarded for staking your ECO. As your yield begins to sprout up from staking, you will be eligible to earn highly unique NFT's not available for purchase. These NFT's will vary in scope, but will include connections to real world assets and even rare easter-egg NFT's.

The EcoFi tokens will be distributed as described below:
- 50% will be given away for public contributions
- 10% will be set aside for use as Eco Genesis Tokens
- 20% will be utilized for airdrops and farming
- 15% will be used for the Ecosystem and marketing
- 5% will be sent to the core development team
https://preview.redd.it/h8l14ihwjsu51.jpg?width=852&format=pjpg&auto=webp&s=ef240f6bbee08301b52ea971a3e97a475cb656b6
It is important to note that from 10/23/20 to 11/3 is the EGT airdrop period. During this period, users will be airdropped 1 ECO for every 100 EGT owned. The public contribution period will also last during the same time period and it will include an ECO member sale of 5,000,000 ECO. After the DAO is live, you will be able to use your EGT to vote.
https://preview.redd.it/0145p4xvjsu51.jpg?width=924&format=pjpg&auto=webp&s=a3996925f2de9dbdd2297c5d5e3824756cb87df1
The team behind EcoFi includes a diverse group of developers, artists, traders, and investors that have been a part of the Forex and Cryptocurrency landscape since 2014 with a focus on Ethereum's blockchain and environment. The team has top level Ethereum development skills which will allow for a productive and smooth launch.

https://preview.redd.it/d7dc6v8vjsu51.jpg?width=931&format=pjpg&auto=webp&s=11263b95088bb77fbcecd88f96a1b414aaaf9281
Creating a sustainable and active Cryptocurrency ecosystem is difficult over time. Providing a solution via community building/tokenomical development via a decentralized self governance reward system can be the answer to the well known project burnout problem. Unique tokenomics are a very big draw for EcoFi. Adding in unique NFT’s while also planning for the implementation of real world NFT use is not only innovative but setting EcoFi up for a strong competitive build which could potentially pave the way for further NFT usecase. Following the EcoFi community and contributing may turn into one of DeFi’s biggest game-changers.

Pertinent EcoFi Links:
- Litepaper: https://ecofi.io/ECOFI\_LITEPAPER.pdf
- Contact: [email protected]
- Medium: https://medium.com/@EcoFinance/ecofi-eclisping-the-possibilites-of-defi-64b7dcf23fc1
- Website: https://ecofi.io/
- Twitter: https://twitter.com/finance\_eco
- YouTube: https://youtube.com/channel/UCn\_pnNgrKWTsLSP5Jhi7MaQ
- Telegram: https://t.me/EcoFiOfficial
- Airdrop: https://t.me/ecofi\_airdrop\_bot

(I write articles and reviews for legitimate, interesting, up and coming cryptocurrency projects. Feel free to PM me to review your project. Thank you!)
-------------------
Disclaimer: This is not financial advice. The sole purpose of this post/article is to provide and create an informative and educated discussion regarding the project in question. Invest at your own risk.
submitted by Chrisc9234 to defi [link] [comments]

Summarizing some free trading idea resources I've been using

I've been following many free resources on youtube and twitter to generate trading ideas. Some of them are suspicious; some are more like boasting their wining trades but never post any losing trades. I see many people ask about trading ideas/resources, so I want to briefly share some resources I find useful.

Twitter resources:
  1. @ TicTocTick


  1. @ tradingwarz


  1. @ traderstewie


Youtube resources:
  1. Conquer trading and investing. https://www.youtube.com/channel/UCN2WmKUchJpIcS1MupY-BuA


  1. Blaze Capital: https://www.youtube.com/channel/UCq0BCGckWWjrnV8YdYO24JA
Other notes:
  1. The scalping trades in the morning is not very suitable for small accounts since they will trade for example 100 shares of BA (~160) to scalp a few dollars per share.
  2. Even though the stocks on their weekly watchlist does well very, one still need to come up with an actionable plan. Very often say they recommend stock A on Sunday, and on Monday it already gaps up big. They sometimes do YOLO options -- big risk big rewards-- options can go to 0.
  3. Besides the free content, everyone can get a free one-week trial for their paid membership, or a 2-week free trial by winning a lottery game on their youtube ( what I did) or knowing someone in their group and get a referral. What I like about the group: (i) very frequently updates each day on SPY and stocks on the watchlist. (ii) all their positions, Profit / Loss are very transparent. I learned a lot about how to manage trades by observing their live trades. (iii) There are many very experienced traders in the group posting their trading ideas, plans, entry/exit, and there are many live discussions. (iv) There's a "helpdesk" in the group where members' questions will be answered in minutes. I often ask about my trading plan, entries/ targets.




Other resources:
  1. Shadow trader free newsletter
https://www.shadowtrader.net/newsletter-category/swing-trade


I've spent much time looking for free contents, and I like the ones above. Also looking forward to hearing about other good/bad resources. I might also update this post if there are enough interests. NFA
submitted by Busy-Valuable to Daytrading [link] [comments]

EcoFi: The Future of DeFi

EcoFi: The Future of DeFi
The cryptocurrency markets are evolving and changing at an alarming rate. New projects are created on a daily basis in support of change from the old monetary system we have all come to know and hate. Immutable code, applications, decentralized governance entities and exchanges are bringing out the best of blockchain, but sometimes these projects start off with a loud eruption of activity and volume only to fade slowly when development ends or hits a standstill, or even when a clone with more innovation becomes more popular. This is a common problem in the cryptocurrency space that has effectively created and then terminated thousands of legitimate projects and ideas looking to make a difference in this new uncharted world of cryptocurrency. Innovation always catches up, this time in the form of EcoFi.

https://preview.redd.it/up8ewyohjsu51.png?width=6510&format=png&auto=webp&s=efc46fa2b0c10c0fccb7170a259a9ee8e05d54c6

EcoFi bills itself as "an open-sourced, permission-less and censorship-resistant protocol built to power safe and responsible innovation in the Decentralized Finance space." EcoFi is focusing on putting an end to the vicious cycle or life and death of new projects by rewarding the communities strength and adoption. It plans on accomplishing this by creating a unique marketplace that builds on the principles of DeFi token pairs and an exclusive marketplace that is housed on the EcoFi website.

https://preview.redd.it/kgw77eeijsu51.png?width=4234&format=png&auto=webp&s=ec77c446521a420f76f17070f665e3e7efc1d36f
The EcoFi economy will consist of 3 tokens: ECO, EcoFi Genesis Token (EGT), and Sprout (SPRT) to bring about an active and innovative marketplace.

ECO has a total supply of 10,000,000 tokens and this supply is capped. ECO is earned during limiting periods which will allow you to farm it. ECO presents an opportunity to pair it with other tokens to create new and diverse liquidity pools. Staking Liquidity tokens via the EcoFi website, users can earn SPRT tokens as rewards. These tokens can also be purchased on Uniswap. ***ECO'***s other utility will include using it to obtain unique farm-able NFT's along with curation of NFT's along with other algorithmic-ally backed assets.

EcoFi Genesis Token (EGT) will act as the governance token for the EcoFi ecosystem. It will allow holders to vote and help decide on future development, integration, and decision making in regards to the future of the ecosystem. EGT will also be utilized as a tool to receive airdropped ECO. The DAO Governance platform will be released at a later date. Early adopters and utilizers of the EcoFi economy will be rewarded in both EGT and ECO for helping share the EcoFi vision and helping build its community.

Sprout (SPRT) is the token that is rewarded for staking your ECO. As your yield begins to sprout up from staking, you will be eligible to earn highly unique NFT's not available for purchase. These NFT's will vary in scope, but will include connections to real world assets and even rare easter-egg NFT's.

The EcoFi tokens will be distributed as described below:
- 50% will be given away for public contributions
- 10% will be set aside for use as Eco Genesis Tokens
- 20% will be utilized for airdrops and farming
- 15% will be used for the Ecosystem and marketing
- 5% will be sent to the core development team

https://preview.redd.it/2g7xy9ahjsu51.jpg?width=852&format=pjpg&auto=webp&s=3674d9b107ad96bea6ea210df9cd1a2d1ab98480

It is important to note that from 10/23/20 to 11/3 is the EGT airdrop period. During this period, users will be airdropped 1 ECO for every 100 EGT owned. The public contribution period will also last during the same time period and it will include an ECO member sale of 5,000,000 ECO. After the DAO is live, you will be able to use your EGT to vote.

https://preview.redd.it/kacfw6xfjsu51.jpg?width=924&format=pjpg&auto=webp&s=e02568faa9eb098f6b959654830a0541cb90bdc6

The team behind EcoFi includes a diverse group of developers, artists, traders, and investors that have been a part of the Forex and Cryptocurrency landscape since 2014 with a focus on Ethereum's blockchain and environment. The team has top level Ethereum development skills which will allow for a productive and smooth launch.

https://preview.redd.it/jhldatdejsu51.jpg?width=931&format=pjpg&auto=webp&s=7ce799eef6ad43e341aa75598f0eb014310c0f22
Creating a sustainable and active Cryptocurrency ecosystem is difficult over time. Providing a solution via community building/tokenomical development via a decentralized self governance reward system can be the answer to the well known project burnout problem. Unique tokenomics are a very big draw for EcoFi. Adding in unique NFT’s while also planning for the implementation of real world NFT use is not only innovative but setting EcoFi up for a strong competitive build which could potentially pave the way for further NFT usecase. Following the EcoFi community and contributing may turn into one of DeFi’s biggest game-changers.

Pertinent EcoFi Links:
- Litepaper: https://ecofi.io/ECOFI\_LITEPAPER.pdf
- Contact: [email protected]
- Medium: https://medium.com/@EcoFinance/ecofi-eclisping-the-possibilites-of-defi-64b7dcf23fc1
- Website: https://ecofi.io/
- Twitter: https://twitter.com/finance\_eco
- YouTube: https://youtube.com/channel/UCn\_pnNgrKWTsLSP5Jhi7MaQ
- Telegram: https://t.me/EcoFiOfficial
- Airdrop: https://t.me/ecofi\_airdrop\_bot

(I write articles and reviews for legitimate, interesting, up and coming cryptocurrency projects. Feel free to PM me to review your project. Thank you!)
-------------------
Disclaimer: This is not financial advice. The sole purpose of this post/article is to provide and create an informative and educated discussion regarding the project in question. Invest at your own risk.
submitted by Chrisc9234 to ethtrader [link] [comments]

I’m 14 and I’ve been trading stocks, options, futures, and forex for almost 4 years. How do I land a finance internship and where do I look? Should I wait a little bit longer?

I'm 14 and I've been trading stocks, options, futures, and forex for almost 4 years. How do I land a finance internship and where do I look? Should I wait a little bit longer?
Ever since I was in 7th grade, I started to learn about trading because of video game trading. I remember trading many in-game items and selling them to 6th graders for cash. Every night, I would stay up in the video-game item auction websites ( scrap.tf ) because there would be fewer bidders and, therefore more opportunities to snag some good deals. I didn't even play video games at that point, and I only liked trading video-game items. One evening my mother said, "If you like trading so much, you should learn about the stock market.". From then on, I was hooked. So every day after school, I would spend hours watching videos to not understand it, researching it, writing notes, and continuing to expand my knowledge. After about 1.5 years, I was quite knowledgeable and parents that I had given presentations to were very impressed (This was a middle school project where you would present on something you're interested in). Some parents couldn't understand a word I was saying. Near the end of 8th grade, my father wanted to give money to trade with (>$1000) and during the summer I had almost doubled his money. During freshman high school, I would go to the library and open my laptop and just trade. I made about $60-$200 a day and some days I lose money. Although since I managed my risk, my reward outweighed my risk. Trading is just as much, if not more as a mental game than a numbers game. During my freshman year, my father wanted me to manage his retirement fund, and by then, I knew how to read financial statements and do fundamental analysis very well. We are currently 30% up with me joining in January 2020. Although it was sad to find out my father had lost quite a bit of money in his account statement, but now his account is finally positive. Because of this, my mother now encourages me to "monitor" my father which is hilarious considering my age. When I grow up, I want to be a financial analyst or start a prop shop (a type of trading firm), go into real estate (another story for later), and achieve financial freedom. For now, I want to apply for internships to gain some work experience in finance and I have some unanswered questions.
- P.S Sorry for any grammar issues I may have missed. English class was never my strong suit.
Questions:
  1. What route should I take? Trade school? Finance or accounting in college?
  2. How do I get some finance-related internship as a high schooler?
    1. Is this even possible?
    2. Should I wait a little bit longer?
    3. Where do I look?
  3. What route should I take? Trade school? Finance or accounting or both in college?
submitted by sloppies to PFJerk [link] [comments]

Gold and Silver rocket ride - 110k in 1 month

Gold and Silver rocket ride - 110k in 1 month
IMPORTANT: OVER 75% OF PEOPLE LOSE MONEY WITH CFD TRADING. IF YOU'RE A NOOB, DON'T EVEN THINK OF OPENING A CFD ACCOUNT. TRY MAKING CONSISTENT MONEY SWING TRADING ASX STONKS FIRST. THEN KEEP DOING THAT UNTIL YOU GET BORED AND WANT TO LOSE BIG MONEY VERY QUICKLY. ONLY THEN YOU MAY HAVE WHAT IT TAKES TO TRADE WITH LEVERAGE.
You most likely don't have my discipline and pain tolerance. Or my feel for risk/reward math. On top of this you need markets to play nice and a bit of luck.
I'm no wiz, but I know my strengths and weaknesses. I smell a good setup and prepare accordingly.
Hope you all nail your big opportunity when it shows up. If not, that's okay too. You'll keep getting chances. Be patient. Focus on small wins. Plus there's far more important things in life than being loaded.
------
How I lost 5k trading CFDs then turned it around
Back in April, I was playing with CFDs and nearly blew up my account. Started with $5k and dropped to almost zero because trading forex with leverage is a very stupid game. This is why IG gives you a demo account. But instead of using the demo account to learn how not to fuck up massively, I was using it to place giant YOLO shorts on US markets.
By being a bit less retarded on the forex trades I clawed back some losses then topped up the account with another $2.5k before starting to open small positions in gold. From 3 to 10 contracts depending on how confident I felt. Then smelling a massive opportunity, I ramped up the leverage by going with much larger positions.
Day 5
https://preview.redd.it/oqd955abwak51.png?width=1080&format=png&auto=webp&s=84aa309284c22117630899e39b8b1bfb89c670f3
Entering the silver trade
It was only after making decent profits in gold that I dared venture into silver. I wanted to enter silver around $18 but missed the boat after waiting too long for a dip. $20 was still great. Tons of upside left.
Silver is one nasty motherfucker to trade. It's a much smaller market than gold so the swings can be wild. Silver will play along nicely then suddenly fuck you really hard. If you use too much leverage you're basically waiting for your account to blow up. Stop losses will save you, but they can also kill your best trades. I didn't bother with stops for most of the ride because I'm an ASX_bets retard but also because I had ultra high conviction in the $25-27 price target.
Started with 25 contracts. I very nearly missed out on this mini pump. Some might call it luck.
Day 18
https://preview.redd.it/de8jozlexak51.png?width=1080&format=png&auto=webp&s=79d174c67a86754c7d9fd78aa594f88282c08834
Adding to my silver positions
Increased my position size once I had a profit buffer to protect against sharp drops. It's WAY easier to blow up a CFD account than it appears. When trades are going well you feel like you can keep adding leverage and make millions. But even small swings will kill you if your positions are too big. Discipline is key.
Buying 50 contracts in silver is not the same as 50 contracts in gold because silver moves are 2-4 times bigger. When gold moves 100 points, expect a 200-400 points move in silver. Having an equal mix of gold an silver contracts helped lower the overall volatility of my account.
Anything over 10 contracts in silver is big. You can lose hundreds within minutes. Buy 50 contracts, the price drops $1 and you're $5000 in the hole. I knew when to push and when to hold back. This was EXTREMELY important. I did not get greedy. I was happy to let price moves do most of the lifting.
Started the day with 3k profits. Went to bed that night with big beautiful bhags. 17k
https://preview.redd.it/qcbeoxvnxak51.png?width=1080&format=png&auto=webp&s=4228593b9d86cc5f0460f44af06c7292ea644625
Day 19
Woke up the next morning with even bigger bhags. 30k
https://preview.redd.it/9b439y5qxak51.png?width=1080&format=png&auto=webp&s=19e3ad27d7237bc88fdeb329ebcd113e11349554
Day 24
More pump. I added 50 silver contracts that day after a decent drop. Profits now up to around 41k.
Held through the big swings...
Like a proper bitch, Silver dropped another 5% soon after I added those 50 contracts and my 41k profit became 20k very suddenly. But no stop loss and I held firmly. What's a 21k drop when you've been down 35k on BBOZ before. Metals bounced back hard later that evening. Still not selling. High conviction made all the difference here.
Five days later and I was up to 50k profit.
At that point, I felt safe enough to add another 50 contracts.
https://preview.redd.it/j2at0n95zck51.png?width=1080&format=png&auto=webp&s=4a0ea2fabe6a245807fb9ee8a8d0bc4ce854ba3a
And it paid off BIG
Both gold and silver keep pumping. Profit now 86k.
Day 28
https://preview.redd.it/f3pz0an8zck51.png?width=1080&format=png&auto=webp&s=0ca765b6cad423786dee33a1366c70d324e39b8d
Why sell now?
Not selling yet. GV's silver target was $25-27 so I was confident holding through some wild swings.
GV = Gold Ventures https://twitter.com/thelastdegree
A turbo chad from Belgium who made a massive fortune trading options during 2008-2011 when silver went from $9 to $50 before crashing hard. GV is a certified wizard when it comes to timing the gold and silver cycles. Started with his wife's 32k savings and is now worth 18 million EUR or USD, I'm not sure and who cares. GV is pretty low key but commands plenty of respect from other metal traders on Twitter.
Meanwhile GV was on holiday but still shitting money.
https://preview.redd.it/ixsxwjx30dk51.png?width=1080&format=png&auto=webp&s=9fd5741634a7a5b0f913f5ea12edf05722f9fddf
GV also has a junior miner portfolio worth several millions. I believe it's true. I went deep into his Twitter history. He was buying heavily into the March crash and some of his picks like AbraPlata have since made 10x. Junior miners are like call options on metal prices with no expiry date but you still need to pick winners and enteexit at the right time.
Magical Six Figure Milestone
Not long after... BOOM! Hit 100k in profit.
When starting, I knew there was potentially 40k-50k to be made from this setup even without playing it perfectly. I would have been okay with 20k.
Day 32
https://preview.redd.it/oy8sqsgz1dk51.png?width=1080&format=png&auto=webp&s=a8c628670578b81d72b9a41bd9d2307a27a2fbf7
Start taking profits
Silver was still going strong but I felt it was time to de-risk.
So I started taking profits on both gold and silver around that time.
https://preview.redd.it/gvdqs67a2dk51.png?width=1080&format=png&auto=webp&s=64a77d3ccca86fe6e29eb43e0c2eaf096f68867c
Okay I'm out
The way silver kept pumping, I knew a big correction was imminent. By 12pm I was completely out with over 110k profit. Home and dry.
I went on with my daily work routine, a bit more relaxed and not checking charts every 5 minutes.
And then metals dumped hard.
There was money to be made on the short side but there was also a strong possibility of shorts being squeezed. So I didn't bother.
https://preview.redd.it/opoio79i2dk51.png?width=1080&format=png&auto=webp&s=80187384d37e03eec8d01814248bbe4c5a48cc4f
After the dump, I had no appetite to get back in with big positions. In hindsight I could have made tons more if I held to $29 but the ride from $24 to $29 is far more risky than $20 to $26. I'm quite okay with my 40x performance. Plus I needed to reset mentally after this rocket ride. More often than not, the best thing to do after a huge trading win is to take a break. Wisdom gained from the BBOZ days :)
Withdrew my initial capital and 90% of the profits from IG. Left around 6k on the account to keep playing.
https://preview.redd.it/1djdhz1m2dk51.jpg?width=1080&format=pjpg&auto=webp&s=c028a06d4e0cf73bfb80f8ac48dd18e333b791d4
Feels good to have extra funds to invest with but I also need to set some aside for the monster tax bill next year. You're welcome Australia, and all the JobSeekeJobKeeper leeches.
Hey everyone, check out my insane stats!
That 85% win rate though...
  • IG MARKETS - TRADE ANALYTICS - 29 JUNE TO 29 JULY
https://preview.redd.it/slkmhrlq2dk51.png?width=1272&format=png&auto=webp&s=b15b261144d3cd55c1d28530a80efd30c49f3125
Less impressive when zooming out to include the forex train wreck in April and my more recent metal trades.
  • IG MARKETS - TRADE ANALYTICS - 1 JANUARY TO 17 AUGUST
https://preview.redd.it/jam28zau2dk51.png?width=1272&format=png&auto=webp&s=99fd332c319984f1de28d1ec7e6a58df2754946d
-----
Credits to:
https://twitter.com/thelastdegree - already covered above
https://twitter.com/DaveHcontrarian - called the metals and S&P500 bull runs
https://twitter.com/AdamMancini4 - simple yet powerful charts
https://twitter.com/badcharts1 - advanced silver charts
https://twitter.com/graddhybpc - advanced gold and silver charts
https://twitter.com/Northst18363337 - another master of charts
https://twitter.com/bhagdip143 - ultimate master of monster position and making bhags
BTW fuck Facebook groups, you'll hardly learn anything there. Full of losers. Twitter is where the elite traders and big dick fund managers bounce ideas. A solid Twitter list is worth thousands if not millions in the right hands.
submitted by _HeyHeyHeyyy_ to u/_HeyHeyHeyyy_ [link] [comments]

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Using the Risk to Reward Ratio to Evaluate Your Trading Strategy

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