Daily Forex #53 - What Does An Old Car Got To Do With Trading?!

in #forex6 years ago

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A few days ago I shared about how I accidentally stumbled on Forex and made a career out of it. To read that blog post, you can go HERE.

Yesterday (<-- Click this link to read yesterday's story) I shared about the day I made £3,000 in 2 hours! It was the first time I made so much while trading a High Risk Small Capital Account. Today I want to go through with you my thought process when I test a new strategy.

I'm always excited to learn new strategies from other traders and friends. It gives me an insight into how other people trade the Forex market. The way the prices move has changed over the years and we have to keep adapting and learning everyday in order to keep up.

10 years ago, it was easy to get 400-500 pips a week from a trend trading strategy. Today, you will be lucky to get 300 pips a week. Does this mean that the strategy does not work?

300 pips is still a fantastic profit! The problem is people keep comparing to the "good old days". The strategy still works of course, but the parameters have changed.

I was just talking to a fellow trader friend the other day about this and we agreed that the market has evolved due to the influx of traders over the years. 10 years ago there were lesser traders compared to today. This means the volume was also much lesser than today. What this means is that when the big players like the banks and hedge fund companies place a trade, they are able to move the price much faster than today because there is lesser volume in between from the retail traders to interrupt the movement.

This realization has led me to become a student again. I always thought I had the best strategies but even the best can still be improved. The key here is IMPROVE and modified, not that it doesn't work any more.

It's like driving an old car. The car still works, it just needs more regular maintenance to keep it running smoothly. Or you might need to change some of the spare parts due to wear and tear, but the car still works.

I enjoy the process of learning a new strategy and then figuring out how to incorporate it into my current ones. As a 100% technical trader, I need to keep myself up to date with how the charts move. It is so important and many traders fail to realise it. They think by putting in an indicator they would be able to become the George Soros or Warren Buffett. Hey, these guys have spent years after years honing their trading and analytic skills. They did not make their billions by using 1 simple indicator!

You should be able to tell what the price is doing, where the price is heading, which phase of the market is the price at and when to enter the trade. At one glance. You don''t need an indicator to tell you all these. You need more practice. Whoever told you that you can make a million dollars in 3 months with this magical indicator is a liar. You would probably have more luck trying to spot a unicorn in the woods.

And finally the most important part of testing a new strategy is by back testing it. I would test it out on all the pairs. It has to work for majority of the pairs. If someone told you a strategy only works for 1 pair only or 1 timeframe only, alarm bells should be ringing. How can that be? The market is the market. How can 1 pair differ so much from all the other pairs?

PRICE IS THE SAME NO MATTER WHAT TIMEFRAME WE ARE LOOKING AT!

Remember this!

If you enjoy reading my blog posts on my Forex trading then remember to follow me if you want to be notified once the next post is up. I post daily but at different times because my trading comes first. Blogging is during my free time, its not a job. I just enjoy writing sometimes.

Hope you enjoy today's blog post and if you have any questions please feel free to ask in the comments below and I will definitely respond to you.


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thanks for the daily dose of fx Ryan!
reminder to myself to always be conscientious and not get complacent when things are going well.

as more traders join in, in the future, it would seem logical to think that price ranges are going to become tighter with the higher volume and more indecision. But I guess in some cases it also means more stoplosses for the banks to cash in on hahaha

if you understand how the prices move, your stop losses will not be hit most of the time ;p

wont hit stop loss if don't put stoploss
akakaka
will attend your fx seminar when im back in sg! :D

oh... putting a stop loss is a MUST. that is my #1 rule.
my forex workshop is available in bangkok too if u happen to be there :)

ahaha yea just kiddin' 🤣

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