Before you begin trading, you have to realize that you are not gambling. If your heart beat is racing while the pairs are moving, you're doing it wrong. Trading is just like every typical daily task: damn dull and repetitive. The idea is not to become a millionaire in a commerce; rather the notion is to live the market and make a living from it. Few things you have to need to understand before you begin your trading practice: 1). Money direction 2. Trend identifiion. Finally, 3. Support and resistance identifiion.
Money Management
Let me begin with the elephant in the area: money management. There is nothing more important than this factor. Folks always end up blowing their accounts because they ignore this indispensable part of trading. Alright, let me go straight to the gist of it. To start with, You cannot risk more than 2 percent of the capital you're investing on any 1 trade and I cannot stress enough on this point. 1 major component that contributes to this volume you'll be risking is your STOP LOSS. SLs are very important because they determine the lot size you need to adjust before you put your trade. Brokers permit you to transfer your Sl should you wish to BUT YOU SHOULD NEVER EVER MOVE YOUR STOP LOSS EVER once you've placed your trade. Why? Well, because your stop loss is that 2% we talked about before. You need to adjust your lot size in accore with your stop loss. Then, the idea is to gain at least 1:2 in the trade but ideally you want 1:3 to be profitable in the long term. If you master this basic trick, if you're able to control yourself rather than go your sl, never exchange more than maximum 2% afterward you have a chance to live in this market. I'm going to join the mt4 indior which will do the dull maths for you and will provide you the lot dimensions based on your stop loss Attachment 2240036 . Now, there is lot more to this 1:2 and 1:3 philosophy which I have not contained in here. You have to do your own research on it before you begin your trading practice.
Trend Identifiion
This is perhaps the hardest for most newcomers and professional alike. There is nobody way out there to achieve that. Thousand upon thousand of indiors are all out there which will assert that they will identify trend but to be very honest, they are nearly useless. Personally, I'm a sucker for simplicity therefore that I only use 3 SMAs to determine trend: 200, 50, and 10. The idea is simple, if the price is below 200 it's down trend and vice versa Attachment 2240048. There're fundamentals which also play a very important role in deciding the fashion and if you're the pupil of economics then you may have an edge above, let say someone like me, that do not completely understand the macro economics. I solely base my trend identifiion on those 3 SMAs I mentioned earlier and so far I am doing well.
Along with trend identifiion, you must also pay attention to price patterns. The main reason I am not going to talk much about it is because it is a really in depth topic and require it's own separate forum. But simply to give you an overview: prices do not always move in 1 direction; if the trend is up then the price will go up for some time, return, then might continue moving in that way. At least this is the major idea. There're lots of uncertainty and discussion whether the price will probably move again in that way or not generally they do.
Support and resistance
Before I begin explaining the value of SR, let me provide a concise definition of each one of these for the real beginners.
Resistance: The imaginary point where the price stopped the final time when it was up trend Attachment 2240066.
Service: The imaginary point where the price last stopped when it was in a downtrend Attachment 2240071.
Since you have to've noticed by now that both of these are fanciful lines and so very hard to determine. There is nobody way to determine which is a appropriate support or resistance. I'm going to join the indior use to determine that Attachment 2240073Attachment 2240073 but by no means, it is the only one or the best one. Shop around to get a much better one and if you do come across one, do allow me now. Or, if you know a better way to compute them than please do share this info with me. But something is very clear: you should NEVER put your trade without knowing them.
I've talked about STOP LOSSES sooner and mentioned how important they are and how you should never put your trade with them and the best way to determine your stop loss is your service or resistance.
The idea to develop into a successful trader is not a make lots of money in the shortest period of time but rather it is to endure the market. Should you practice patience, place only .5% of your capital, like I do, and receive at least 1:2 of each trade you put then, I promise you, you will last very long and you'll always be over your first capital. These clinics are applicable on all time frames; however, I use range bar chart which completely remove time and reveal pure price. It works for me however, does not always function as the cup of java. I will include things like that only if you need one. Very good luck everyone and do not hesitate to ask me some question. Attachment 2240077
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