This Is Why You Must Perform In Depth Market Analysis!
It's not so simple doing market analysis some times.
What time frame should you use? What indicators should you have on your chart? What drawings should you make?
Every forex "mentor" pushes their 'unique' strategy to profitably trade forex markets, however can you be sure that their strategy is truly profitable?
Before you start trading a strategy live you should KNOW for certain that a strategy is possible. There is only one way to be certain that a strategy is profitable - back testing.
Any trading strategy should be thoroughly back tested on the symbol you want to trade prior to trading a live account. Otherwise how can you be sure you'll make money? Answer - you can't.
In going live with a trading strategy you should have expectations about the number of trades you will win / lose / scratch at. You should also know the profit margins to expect.
Without data on a trading strategy you are gambling and hoping.
Many traders automate trading strategies to automatically back test their trading system. This is something that makes back testing a lot easier and more fun.
If you want to start trading the first place you should start is on a spread sheet!
Now just remember, if you want to trade like a winner you have to put in the work like a winner.
Winner winner, chicken dinner.
So - BACK TEST YOUR TRADING SYSTEM
Also, many traders preach fixed risk management ideas such as "only ever risk 1-3% a trade".
THIS ADVICE IS BOGUS!
Once you have backtested your trading system you will know what the ideal risk exposure for your trading system will be. Some systems only have profitable returns when risking a fixed dollar amount, some will return greater with a fixed % amount.
Some trading strategies with high strike rates will allow traders to risk up to 5-10% a trade, whereas other systems may only risk 0.3-0.5% a trade.
There is so much mis-information in the trading industry, and the reality is you do not need to buy a trading system or a mentor.
You only need to do the necessary work to backtest strategies until you come up with a profitable one, and then model the risk exposure to find what returns the most!
RANT OVER.
What time frame should you use? What indicators should you have on your chart? What drawings should you make?
Every forex "mentor" pushes their 'unique' strategy to profitably trade forex markets, however can you be sure that their strategy is truly profitable?
Before you start trading a strategy live you should KNOW for certain that a strategy is possible. There is only one way to be certain that a strategy is profitable - back testing.
Any trading strategy should be thoroughly back tested on the symbol you want to trade prior to trading a live account. Otherwise how can you be sure you'll make money? Answer - you can't.
In going live with a trading strategy you should have expectations about the number of trades you will win / lose / scratch at. You should also know the profit margins to expect.
Without data on a trading strategy you are gambling and hoping.
Many traders automate trading strategies to automatically back test their trading system. This is something that makes back testing a lot easier and more fun.
If you want to start trading the first place you should start is on a spread sheet!
Now just remember, if you want to trade like a winner you have to put in the work like a winner.
Winner winner, chicken dinner.
So - BACK TEST YOUR TRADING SYSTEM
Also, many traders preach fixed risk management ideas such as "only ever risk 1-3% a trade".
THIS ADVICE IS BOGUS!
Once you have backtested your trading system you will know what the ideal risk exposure for your trading system will be. Some systems only have profitable returns when risking a fixed dollar amount, some will return greater with a fixed % amount.
Some trading strategies with high strike rates will allow traders to risk up to 5-10% a trade, whereas other systems may only risk 0.3-0.5% a trade.
There is so much mis-information in the trading industry, and the reality is you do not need to buy a trading system or a mentor.
You only need to do the necessary work to backtest strategies until you come up with a profitable one, and then model the risk exposure to find what returns the most!
RANT OVER.