Info for beginners to Forex

[nunthewiser]

forex is a lot more volatile then other markets. it can go up and down very dramatically.

having a small profit and a large stop may in fact be acceptable; depending on results.

having a small stop might have the position taken out quite regularly, where as a larger stop loss might allow the market to fluctuate and go up to its take profit.

its kind of hard to explain if you havent watched charts a lot.

but an example for numbers sake.

take profit of 25. stop loss of 100. you would need 4 winners per loser. however you may find that your indicators produce 6 winners per loser - a positive expectancy. as long as your money management is calculated on 100 pip stop loss there is nothing wrong with that system.

in a volatile market, u might enter and it drops 25 points, even 50. however it might only very rarely drop 75 or more points. if your stop loss was 25 (1:1 risk ratio) then your trade might get taken out more then half the time, then rise back up to your original profit level.

a larger take profit might see your position gain 25 points, then retreat 50 after that.

im not sure of the markets you usually trade, and what their dynamics are, but risk ratio and % successful trade together gives an indication of a worthwhile trading system; not the risk ratio in isolation.

im not sure if i expressed myself very well, let me know what you make of my waffle.

i trade the ASX and Gold and often varios indicies

i use charts , hence my question actually . why would one use such a wide stop.

i hear where you coming from re getting stopped out maybe too early but if one was a lil more proficient in charting in the first place maybe they would have a lower % stop because of the perceived support /resistance/pivot points

ok , cheers for the reply and realise forex etc different but still cant find myself drawn to the attraction of needing 4 wins to break even on 1 loss

each to there own , cheers

 

[nunthewiser]

No your not missing anything,it is the same as stocks.

You better have a good win rate if your going to run stops wider that profit targets.

All the system sellers use wide stops because your average punter thinks it's about being right. That's how they suck em in.

cheers m8 , thats what some of the sytems looked like to me actually .let ya stop run as long as possible and hope it showed a profit sooner or later

a charts a chart in my book but im naive to the workings of forex /futures

 

[Stormin_Norman]

im not promoting that kind of method; just explaining how it could be a valid one.

 

[nunthewiser]

im not promoting that kind of method; just explaining how it could be a valid one.

yes and thanks . thats why i asked you guys

 

[Trembling Hand]

No way. Stop greater than target = Broke. Would like to see 100 - 200 trades of any such system. Just the breakeven point you would be needing to nail a high win rate. Then to get paid for your time and effort!! If its common....... then it also inversely related to profitable traders.

Stormin FX is not more volatile than other markets. Not by a long shot. Have a look at HSI or GC. Or even oil. Not by a long shot. HSI can do 100 ticks in a min no news, nothing unusual, that's volatility. Even the SPI can run nuts on opens and close.

 

[nunthewiser]

cheers for replys .norm , bent rod and TH

 

[Kauri]

on one of mi more infreeekwe... ahhh.. less frequent.. visits.. due to other dues falling due... butt.. I find an elliot-fib ?? chart like this one posted recently is about as tradable as the the tree empty sem-sav-blank botts staring accusingly at me as I speak-mumble... personally on this type of chart I would be standing aside with de broadaxe shouldered and letting someone else put their neck on the line... 5 is shorter than the one afore it... ABC is about out of proportion as I am... hey take a look around the farm... there are plenty of fat turkeys strutting about innocently... why try to xxx(make)xxx...sorry FORCE...a trade position out of sumut that ...aahhhh.. why worry... tis probly sumut to do wid money... and dat is one subject .(at least).. where I flounder... speaking of which... the days I went out at 3am with a broomstick wid a nail init... wiggled my toes whilst kneedeep in the the briny... and brought home a flatfish dinner..(or is it now tea??).. hey... tis good to be back... in spirits abuntant anyways..

Slanty
...........Kauri

 

[Trembling Hand]

Kauri LOL

And yes it seems to be called tea now.

 

[BentRod]

on one of mi more infreeekwe... ahhh.. less frequent.. visits.. due to other dues falling due... butt.. I find an elliot-fib ?? chart like this one posted recently is about as tradable as the the tree empty sem-sav-blank botts staring accusingly at me as I speak-mumble... personally on this type of chart I would be standing aside with de broadaxe shouldered and letting someone else put their neck on the line... 5 is shorter than the one afore it... ABC is about out of proportion as I am... hey take a look around the farm... there are plenty of fat turkeys strutting about innocently... why try to xxx(make)xxx...sorry FORCE...a trade position out of sumut that ...aahhhh.. why worry... tis probly sumut to do wid money... and dat is one subject .(at least).. where I flounder... speaking of which... the days I went out at 3am with a broomstick wid a nail init... wiggled my toes whilst kneedeep in the the briny... and brought home a flatfish dinner..(or is it now tea??).. hey... tis good to be back... in spirits abuntant anyways..

Slanty
...........Kauri

BAHAHAHAHA

Ah mate I miss your posts!!

You crack me up BM.

 

[Naked shorts]

I see what you are talking about stormin, but after learning the hard way, and after reading about other highly successful traders...picking up pennies in front of a bulldozer is not the way to go. You will eventually blow up

 

[jancha]

Hi,
I use e-trade pro and i was wondering if anyone knows what the colours represent in the candle stick chart eg. there is green,brown and a bright red occasionally. What do they represent in the volume of trades?

 

[Page]

Any extensive term venture strategy should ideally consist of multiple less important strategies contained within a bigger overall strategy. Surplus volatility can lead to quick gains and extensive losses to your portfolio of currency couple positions. Long term Forex investors look for supports/resistances, fib levels, superior moving averages, and previous swing highs/lows to enhance their odds of a unbeaten trading position.
There is a cause why only 10% or 5% of all Forex traders do well. They are the ones trade on the dips and selling into the rallies, when everyone else is not on time to the game. They are the ones that supervise risks, limit losses, and make the most of gains by tactically placed entries and holding their positions longer, taking partial earnings, and letting the rest of the place run on house money, until the tendency is worn out.