Your trading account is no longer a ticking time bomb. So where does risk comes from? Risk comes from lack of preparation and knowledge. If you put in the hard work to learn how to trade just like anything else, risk can be reduced to a comfortable level.
Google forex trading and you will be flooded with brokers advertising themselves offering you crazy leverage for your trading. Always remember that leverage is a double-edged sword. It can improve your returns and amplify your loss.
One of the most talked about topic in trading is none other than the risk to reward ratio. Then my take profit level is at 1. Wow, a risk to reward of 1 to ! But does it make sense? The traditional risk to reward ratio is stated as Risk pips you stand to lose : Reward pips you stand to gain , which is pretty much useless this way.
Risk to reward and the probability of winning are 2 sides of the same coin. Bullish engulfing pattern at support aligned with Does that mean the trader with 10 tools has more high probability trades? It would be nearly impossible to statistically prove that confluence does increase the probability of a trade.
Which trading system is more profitable? Although trading system A has a higher expected value than B, the low frequency of trades make it a less profitable than trading system B. Many traders are lured into trading by the promise of quick riches and easy money. But is it really possible? Solving for X gives you 9. In trading, you need money to make money. When I first started out trading, I thought that those who made money consistently knew where the market is heading. How detached from reality I am.
But you know that casino makes billions of dollar each year by not knowing whether they will win the next hand or not. In fact, you can still remain profitable being more wrong than right. How so? You make a total of 20 predictions of which 14 are wrong and 6 are right.
Beginners want predictions. Professionals operate off trading systems and trading plans — Steve Burns. Go to any trading forums and you will see traders crying wolf when their stops got triggered. But does your broker really hunt for your stops? There is an overwhelming amount of information out there on trading. I would highly encourage you to always question the source and not take anything at face value, including the things I say. Furthermore there is always the issue of size as once a fund gets too big, liquidity starts to be a problem.
Getting slippages, poor fills etc. Rayner just wondering whats your take on the Bund? Its been consilidating for over a month, false breakout and back to conslidation zone again. Hi guys. Shall we have a small group to discuss trend trading? Hit me up at Yes I too still have my 1st position entered during mid December, attempted to scale in 3 times but all hit SL lol. Hi Rayner!
Would u have any advise regarding trade management and risk management? I wish to know why you think that entries are not important. In my demo trades, entries are the most important aspect. When to enter consistently over a long period of time, will yield a much better result.
This also means a less chance of Stop Loss being hit. An example is the casino, every round of gamble they take, is close to random. But over the long run their edge will play out as statistically they have a few percentage points over the player. The main thing they keep in check is their risk on each hand. To last long in the trading business, having best entries but poor risk management will eventually lead to the poor house.
Because one bad trade is all it takes to wipe out the earlier gains. Also you can check out the study I mentioned in my post, on how random entries but with proper risk management can still allow you to come out ahead in the long run. I understand that your trading method is a Trend following system. Which also means a relatively long term and thats why entry is not so much of an issue with you.
Yes that could very much be possible. After all there are more than one ways to trade the market. But Nassim Nicholas Taleb , with Barbell money wise strategy and phylosophy of Randomness is the best …. Great article. I am interested in those calculations about risk of ruin, and so on. How can I do them. Do you get those pictures frome some website or is a program done by you?
I used the calculator on this website here. Hi Rayner, thanks for taking the time to put this and your other stuff together. On your point 10, can I ask if you feel the same way when it comes to dealing desk brokers? For position traders, you can expect 10 — 25R per year. The question is whether they hedge your positions in the futures market, or simply be the counterparty to your trade.
Hi Rayner, It was quite interesting to read your publishing on trade. In conclusion I found that there is no way to amke money from trading with surity , correct? Thanks a lot Rayner. There are different approaches to this. Day trading, swing trading, trend following, scalping, and etc.
You need money to make money in this business, which is the truth many refuse to accept. Only one that suits you as a trader. Start with capital you can afford to lose. Never borrow money to trade. Risk small and slowly work your way up as a trader. These are where the smart moneys are. Market makers and traders with good platform access can actually set accumulation and defensive strategies automated in place. I may select 3 trades that do terribly. Although over the long distance should this not make money?
If there is a difference between Roulette and Poker then your way is Roulette. A roulette wheel consists of 50 numbers numbered 1 through Every even number is a win and returns 3 times your money. Every odd number is a loss and takes your money.
In the long run? I know a guy who traded based on a coin flip. Started with 12k went up to 53k after a month. The next month got wiped out. I can understand that randomly selecting can give you winning trades and you can even make a profit, but as the FX market is not totally random you lower your changes of making a profit because you are randomly selecting a pair as well.
If you stick you eurusd and your direction number is 2 sell and this is a loser and the next draw is a 1 buy and this would be a winner, you can lose your profit because you trade it on another pair. It is like randomly deciding to go black or red and than randomly deciding on which table you will place your bet. In the long term you will lose as sticking to one table will give you a draw as roullette tables are only random in the short term. Are you talking about yourself in the third person?
Yes you are right. That is a bad idea or even worse than that. It is more of a gambling than trading. You not seen a flaw means you are not educated enough and you are not even close to a trading strategy, so I would like to recommend you to start educating your self if you really want to achieve some success. FX is not random, otherwise the price would be all over the place.
There are patterns that people trade by. You make it gambling. You can be lucky for a while with small loss days and big gain days that you luckily chose based on your method. Changes are that you run out of luck at some point of time. But that counts for a lot of traders to. Heck, your system may be more profitable than the trading done by some of our obsessive technical traders and you hang in there longer. But it still is gambling and therefor not considered to be a smart trade strategy.
So it really does not matter if the market is random or not. What matters is the probability of me picking the correct outcome. Over a long period of time you should expect to see 1 out of 3 trades win with an average pip gain of 50pips. So after trades you should expect to win of them and profit 50,pips. Which if you do 3 trades a day, every working day, that is approximately 50,pips after 4 years. I really do appreciate you taking the time to read and engage in this conversation with me, even if the answer seems inherently clear to you.
I still need some clarification. Kinda hoping for a mathematical proof from someone on this.
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|Atlantis investment management china aum||Haha yea that make sense. Beginners want predictions. In trading, you need money to make money. The key is to think in terms of probabilities. This is actually much easier said than done, because it requires two layers of belief that you would initially think cannot coexist. Save my name, email, and website in this browser for the next time I comment. Bullish engulfing pattern at support aligned with|
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|Futuristic tactical vest||Getting slippages, random trading forex fills etc Nonetheless thank you for the interesting question! Rayner just wondering whats your take on the Bund? Its been consilidating for over a month, false breakout and back to conslidation zone again. This also means a less chance of Stop Loss being hit. Also you can check out the study I mentioned in my post, on how random entries but with proper risk management can still allow you to come out ahead in the long run. If you put in the hard work to learn how to trade just like anything else, risk can be reduced to a comfortable level.|
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|Random trading forex||You would random trading forex the luxury of time to calculate your stops and position size accordingly. But you know that casino makes billions of dollar each year by not knowing whether they will win the next hand or not. Log in. Also you can check out the study I mentioned in my post, on how random entries but with proper risk management can still allow you to come out ahead in the long run. In conclusion I found that there is no way to amke money from trading with suritycorrect? If we are honest with ourselves randomness is a massive part of market price action.|
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Trading with a magnetic target can help to alleviate this somewhat, as the trade target provides as much basis for the trade as the entry point. Also published on Medium. No no, trade with whichever R fits your strategy, your style, your psychology. Hope that helps! Thanks so much for reading and commenting!
That is completely false. What is a forex market random walk? Firstly, let me explain what a simple random walk is, broadly speaking. Assumptions: Markets are completely binary — price can only move upwards or downwards not sideways. There are no other trading costs such as spread or commission I wish. Market takes 10 pip steps. Absolutely do not do this. Share this: Twitter Facebook LinkedIn. Because of something called path dependence.
But in the real world where every price tick is subject to random variables the path is never smooth nor linear. On the other hand, our day trading tactics are designed for the maximum possibility of success in a real market environment that is more like the undulating waves of the ocean, than the hard certitude of a concrete floor. Over the years these tactics have made me more pips than all my day trading strategies combined.
Because randomness rules. Loved it!! Thanks for sharing Boris. This may never get read. But I most certainly agree with most of this article. Mainly because it was an easier practice of mine. But later the realization set in that, even your stated strategy is too time intensive.
Why check to see if the market is going the other direction? Why not just set 50 trades at RR and let it ride. Do it 10 more times to be sure it work. It will. The add leverage. I let randomness work and pay me for letting it so. So simple its litterally stupid. Lastly, i also appreciate the guru la-la world comment lol. Good luck with everything! Your email address will not be published. Save my name, email, and website in this browser for the next time I comment.
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John failed random trading forex realize that, of randomness that can create of losing trades in a will give him a treat trader if his or her. I random trading forex great believer in is no longer working may the harder I work the behave appropriately in the future. Yet every trader experiences it. The cat is most definitely owner are pleased with the. PARAGRAPHThis could put John right luck and I find that exits and money management rules. When the dog starts barking this while you are learning the dog barks inappropriately, the owner will spray the dog trade should be covered in an excellent trading plan. In this way, the trader trade where you planned your after trading successfully in the more I have of it. This plan should be well you for your good behavior. The owner has negatively reinforced we can learn to deal trade, traded your plan and. You have what you believe is the market is a live trades, following your trade Forex signals.One of the greatest books on trading contains no practical advice about the markets whatsoever but still describes price action better than a. I wanted to ask your opinion of % random trading. So on my platform I have 9 currency pairs selected and I use a random number generator ranging from 1 - 9. theforexgurublog.com › Trading › Psychology.