How to Find the Right Trade Size and Trade Risk Free Do you want to know more about trade size […]

In this video, I discuss the possibility of hiring somebody else to trade for you. There are plenty of places to find money managers on the Internet, and as a result you will sooner or later asked this question of yourself: “Can I make money, or should I hire someone else?” There is a case to be made for doing either. Quite frankly, there are a lot of people out there looking to trade your money. It’s not hard to find someone willing to do it. However, it’s not necessarily easy to find one who’s good at doing it. You need to find a verifiable record, and you should be very leery of people who claim any extraordinarily large gains. They typically will blowup sooner or later, due to using far too much in the way of leverage. You will run into people who claim to make as much as 50% week, which is a really bad scenario. If you are looking to trade on your own, that comes down to whether or not you have time to learn how to trade the markets, or even if you have enough time, can you make the money necessary to make it worth your time? If you don’t have enough time to learn, trade, or don’t have the profitability, then you obviously will need to look for someone to major funds. However, keep in mind that there is a percentage that they take out of the gains, so having said that it is more expensive down somebody else do it.

In this video, I talk about risk versus reward. Without a doubt, this is one of the most basic money management fundamentals that you have to follow. The one thing that you have to understand about trading is that you are not going to win all of your trades. The reality is that you are going to have losses from time to time. By using risk to reward analysis, you can help increase the odds in your favor longer-term. For example, if you’re risking 1 in order to make 5, you only need to be in order to break even. However, if you are risking 1 to make 1, you will likely lose money over the longer term as the losses will wipe out gains much quicker. Looking at a few trades, you can see that the first one is a massive hammer that formed at the bottom of the downtrend. This is typically a reversal signal, but if you use classic technical analysis and trading technique, you can see that on the hammer you would have to risk something akin to 550 pips. Now looking at the trade itself, you have to ask yourself how far can this particular pair go? In this case, you can make a real argument for the 155 level, but the problem is that you’re working against the trend. Because of this, you have to take that into account, and you can also find quite a bit noise on this chart at the 153 level, meaning that you are more than likely going to get 250 pips. This is an absolutely horrible risk to reward ratio and therefore this isn’t the type of trade that you want to take as you would almost always have to be correct on these setups.

Portfolio Optimization: Invest Logically to Ensure the Highest ROI Do you want to know more about Portfolio optimization and how […]

One of the most common ways to protect yourself in the marketplace is to have a stop loss on each trade. This of course is something that you should always do, as we have to protect our trading capital first and foremost, as it is without a doubt the most important thing when it comes to becoming profitable. This of course is basic knowledge, but there is an alternative to placing a hard stop loss, as many people use trailing stop losses. Trailing stop losses function initially like a normal stop loss, meaning that once a certain price gets hit, the broker knows that it is to take you out of the market out of the best price possible. This minimizes losses, and protects the trader from sudden moves. However, the trailing stop loss allows you to dynamically change the level of the stop loss as the trade progresses. In a nutshell, what the trailing stop does is follow the movement of the actual trade. An example would be if you have a 30-point stop loss, and the market falls below that level, we will be taken out of the market. However, as we continue to grind higher, the stop loss moves up with the gains of the trade. In other words, if the market rises 50 points, the stop loss moves up 50 points, offering a stop loss at a gain of 20 pips. However, when markets pullback, the stop loss sits still. In other words, it is very similar to an object on a string, as it needs to be taught in order to be moved. That’s very similar to how the stop loss works.

Paper trading, or using a demo account, is the first step in learning how to trade. After all, you have to be able to know whether or not your even capable of making money in the markets before you can risk any significant amount. By using the demo account, you have the ability to take risk without actually risking any money. This of course is a big deal, as it gives you the opportunity to trade various systems or methodologies and see how they work out. Most professional traders have paper trading accounts most of their lives. They are constantly looking to improve their returns, and as a result they are normally trying new methodologies for indicators or other such things. A demo account is the perfect place to do this because you have absolutely no real risk. Most brokerages offer demo accounts, and it’s very rare that you will find one who doesn’t. In fact, as a general rule you should probably avoid the shops, as it’s a very basic thing to ask. Quite often, traders will use a live account simultaneously to trading a demo account, as the one great thing about trading is you will never know everything. There is always something new to learn.

Sooner or later, the trade does whatever it does, and you are forced to exit. The real question is whether or not you have a plan ahead of time. After all, you can enter a trade at any point, and for any reason. Exiting a trade determines on whether or not it was a winner or loser as far as profit is concerned. Regardless what happens, you have to exit the trade sooner or later, either to collect the prophets, take the loss, or worse yet get a margin call. I cannot tell you how many times I’ve talked to a new trader who has lost a significant amount of money after refusing to exit the trade. If a trade goes against them, they will quite often move their stop loss, hoping for the markets to turn back around in their favor. Unfortunately, this typically leads to more losses, and then eventually they exit the trade with a much bigger dent in their trading capital than was necessary. The best piece of advice for exiting a trade is to simply stick to whatever area or level you said would be the reason for exiting this trade. It doesn’t matter if the result is good or bad, just that you stick to your trading plan. By doing so, you can build up enough confidence in your own trading that you will eventually come out ahead. You cannot get too wrapped up in a particular trade, as trades come and go. Because of this, it’s only a matter of time before another opportunity arises, and if you refuse to exit a losing trade, you may not have the trading capital to take advantage of the next opportunity.