|
Q: Jeff, I've already had good results after just two weeks of paper-trading. Two questions, though: 1. Money management. What percent of your total margin are you willing to invest at any one time? Obviously some collateral must be kept in reserve as a buffer against any potential series of consecutive losing trades. 2. Expectations. With practice and patience, what sort of net pip gain can one reasonably shoot for in a given week or month with your system? Conversely, when things go against us, what kind of weekly pip loss should we brace our accounts for so that we don't get "taken out of the game"? Thanks a lot! Michael A: Michael, I would try to keep the risk down to 5% or less per trade. For example, say you have a $1000 and are trading 1 forex mini-lot. You wouldn't risk more than $50 which would be 50 pips roughly. By keeping your risk small you can survive the occasional times when you get 2, 3 even 4 loses in a row. Preservation of your capital is truly one of the keys to long term success. Gains are totally variable as it depends on many factors like...
As far a losses go, once again it can vary depending on the above factors. For example say a "Trader A" is just trading one market and they had 3 losses in a row totaling 75 pips. "Trader B" mat have also lost on those 3 trades, but they drastically reduced their losses by catching a big winner in another market. So the bottom-line is results will vary as no one trader will do exactly the same thing at exactly the same time. Q: How much emphasis do you place on the news? Last week we were seeing the markets are all over the place. Give me your thoughts on what to look for before getting back into trading after an incident like this. We know that there is more to happen on the horizon and with that we need to keep our ears to the news. - Shawn A: Just stay focused on finding valid setups and don't read too much into the current market or news. As technical traders we don't need to be too concerned with trying to figure out the "Big Picture" and instead are trying to just grab a piece of a move.I also don't spend too much time monitoring news as it can be a full time job and quite frankly can drive me crazy. That's because news doesn't always move the markets in a logical manner. How many times have you seen the market rally on bad news and sell off on good news? It makes no sense at all at times. What makes things even more confusing is that other times the markets will react to news in a logical way. Go figure! In addition with all the news coming out in a regular basis it is very easy to get way too paranoid in taking a position. So for that reason as I said I don't spend too much time monitoring news. Hope that helps!
Q: Since forex is 24 hr, how do manage your
time? i.e what time you sleep and what time you watch the
markets etc?
I can't watch market between 7 - 9 a.m and 5 - 7 p.m as I
need to drop kids and pick them. rest of time, I can manage
to watch hourly charts including during my work hours i.e 9
- 5. If I have some idea of how you manage time, I could
potentially use that information to plan my day and
hopefully replicate your trading results. - Vanier
A: I don't have any set times and just look for trades during times that I happen to be at my PC. My philosophy is that I want trading to be fun and not feel like a job. For that reason I don't force myself to be at the PC the same time everyday. With that said Vanier, what is good for me may not be good for you. If you are on a limited schedule for trading then it can actually be to your advantage. Here's why... Say you can only trade the first 2 hours of the London open. That is enough time to find a trade and not enough time to become drained and tired. The bottom-line is that trading is an extremely mentally demanding activity and you can only do it for so long, before you become burned out. And... That is the last thing you want to happen as you will end up making careless mistakes which can be very painful and costly. Not sure if my answer is exactly what you are looking for, but ultimately you need to trade at times that you feel most productive. In addition your trading needs to work in harmony with your job and personal life. Q: The trading manual does not talk about number of lots to trade and how to increase lot size. Any recommendation on this subject. Thanks Vanier A: There are many ways to do this and a lot depends on how conservative or aggressive a trader is. For example say a broker only requires you to have $1000 in your account to trade 1 full size forex lot. Well if you are aggressive every time you make $1000 you would trade another contract. If you are more conservative you might wait until you make $2000 to add another one. Some ultra conservative traders might wait until they make $5000 to trade a second lot.There is no perfect way to do this and once again it depends on your goals and risk tolerance levels. One thing to remember that in trading there is ALWAYS a trade off. If you trade more aggressively your returns will happen a lot faster and bigger, but... When you make losing trades, your loses will happen way faster and there will be big draw downs in the account. Conservative traders will experience less dramatic swings in their account. One last thought... I always recommend that a goal for traders is to trade 2 lots so that they can scale out of
Hot off the press! This video will highlight a trader who has just had seven winning trades in a row To watch click here:
New tutorial video just posted! This video will highlight one of the most critical keys to your future success or failure To watch click here:
I just received an email from a trader named Nirmal who is new to the program and wanted some clarification on some of the trade setups. Here is a new video that will not only help ensure that you find high probability trades, but also keep out of lower probability trades. To watch Click Here:
Hi Jeff,
the book is great and I am really
looking forward to testing out your system over the course of
the next week. Just a couple of questions I would be grateful if
you could answer: - David C from the UK
Question 1: I came across a
signal on a four hour chart this morning which appeared two bars
before the present time. The price has continued to drop and is
20 pips below your recommended entry. Would you take a trade
like this and if so would you adjust your stop loss to be closer
than the high or low of the trigger candle? Do you yourself
have any rules for instances like this as I can imagine it is
quite easy to miss the exact point of entry in a volatile market
and I suppose it is 50/50 as to whether the price then retraces
again to your required entry level.
Question 2: Where as often
is the case, after the trigger candle the price then starts to
retrace before reaching the entry price, would you place a
limit order at this point?
Answer 1: David, if the price drops 20 pips below the entry level something rapidly shifted the momentum away from the intended setup direction. Because of the shift in market bias I simply pass on that trade and look for a fresh setup. Answer 2: If the trade hit the entry price and climbed a little and started to retrace back a towards the entry price you could put a limit order to enter there.
Question: Hi Jeff, I m a new trader and already read
your manual and have a few questions: -TQ
1.If I take profit early or accidentally close position and the
trend continues, how would I re-enter the market?
2.What is the exactly stop loss I should use?
3.What is the best currency I should trade using this system?
4.How can we identify the market: a. beginning b. middle
c. end
Answer 1 You would need to wait until you see a brand new trade setup to re-enter. Answer 2 The stop loss you use is based on your risk tolerance. If the risk is too big on a trade, then simply pass that trade up. Every trader has a different risk tolerance so I can't say what is best for you. Answer 3 Stick to EUR/USD USD/JPY GBP/USD USD/CHF Answer 4 There is no way to know when you have hit the beginning, middle or end of a move. The only way you know for sure is way after the move has already occurred. If we could know this, we would literally never have a losing trade and be able to exit at the exact peak of any move. I know that there are some individuals out there that will tell you they can teach you this for $10,000 or more, but it simply is not possible. Between myself and 3 colleagues we have spent over $250,000 on courses and no one has been able to provide the information you are asking for. I wish that wasn't the case, but it simply is the way it is. Answer: Stephen, in my opinion the best way to do it is slowly. In other words, first make sure you can successfully trade multiple lots in a demo account. Then graduate to a single mini contract and once you increase your account by 50 - 100% then add another contract. Each time you increase your account by 50 - 100% you can add another contract. When you are ready to trade full size contracts I would start the above process over from the beginning. For those of you who want to be more conservative, wait until your account has increased in value by 100% to add another contract. Question: I have heard you say a couple of times (even in this video) that you usually pass on trades that don't go in your favor after like 4 bars (after spotting the set up)...however I have found out that sometimes even after 4 or 5 bars the trade eventually does go in your favor....my question is do you still HIGHLY recommend to pass on such trades or go after them with a bigger stop loss?? - Rizwan Answer: Yes your observation is right especially during a period of consolidation. One of the reasons I move on after 4 or 5 bars is because quite frankly I get bored and look for something with a bit more momentum. However... If your are continually noticing the trade working out on a particular currency pair 5, 6 or more bars later than you can go for it. Question: While trading on the 60min chart...what would be the AVERAGE TRADE DURATION...3 hrs, 6 hrs, whole day? Maybe sometimes more than a day or two?? - Rizwan Answer: Rizwan, there really is no answer to that as every trade has a life of its own. Sometimes they will take off with incredible momentum and be up 100 pips in a few hours and other times it could take 12 -24 hours to move 100 pips. Other times it could sit in a small trading range for most of the day. Sometimes it may only move 30, 40 or 50 pips. Question 2: Can you explain to me what you mean by "Swing Points"? - Rizwan Answer: Here is a video that can better explain what I am talking about. Also note this will show you how to use swing points to reduce the amount of times you get stopped out. http://www.fastforexprofits.com/fx-swing.html Question: Must the signal bar AND the confirming bar be the same. ( For example if you spot a candle with a small body ( less than 50% of entire candle) must that candle also have a lower low and a lower high, ( for a short trade) compared to the previous candle. or can the next candle after the one with a small body have the characteristic of smaller high and lower lows. 2) If you see a trade is triggered and is on its way, and you miss the entry, is it Ok to jump in provided all the parameters are still valid? Have a good day Cheers Nirmal ( from Chicago) Answer: The signal bar and the
confirmation bar are actually the same thing. I just happened
to use two terms in the manual to label the same bar. Yes on a
short trade you must have a lower high and lower low on the signal
bar. I wouldn't jump in if you are more than 5 pips away from
the original entry level. Question: Jeff, after watching your videos several times and reviewing your course a few more, I have what is to me important questions I have not found on FAQ sections. 1st, are there any time frames in your 15 yr plus experience that would be more profitable using "big numbers' exits instead of watching for 2 MACD signals showing direction reversal or where MACD reversals would actually work better in a particular(s) time frame(s) 2nd, are any of these setups linked in any way(s) to news releases on Forex where one starting at 2 am would be watching one specific currency pair as opposed to watching 2 or 3 that morning? Also, if one doesn't wish to marry their computer and still have a life, isnt the "big numbers" way, presetting stop losses really way to go? It has been awhile since Ive used your site after buying your program, so who, if any, do you currently recommend as best forex site(s) for getting large MACD graphics and charts that truly complement your "forexprofits" methods??? Thanks, David Answer: David, as a rule of thumb the market is always going to have a bigger potential reaction near a big number when using a bigger time frame. This is because a 2 hour chart will filter out a lot of market noise versus the 15 minute chart. When bigger time frames "roll over" they will do so more forcefully than a faster time frame. Think of this like trying to push a 100 pound boulder down a hill. It will take a lot of initial force to get moving, but once it does, "watch out below". Now contrast that to a 5 pound rock. It will be easy to get moving but it won't carry much energy with it. I however wouldn't get too carried away as traders still often place their trades and stops around big numbers and as a result will cause sudden price moves. Yes, by all means if you don't want to be stuck at your PC then placing your stops ahead of time is the way to go. As far a charts go... I personally like Trade Station www.tradestation.com Another popular program is Meta-Trader 4.
Answer: Eugene, that is entirely up to you. I do think when you are up 10 -15 pips that you should move your stop to breakeven. Odds are that if the trade is really going well then it won't reverse back so... If it does reverse and hits your original entry level then odds are it is going to keep going in the wrong direction. Once you have moved your stop into a "can't lose" trade then you can decide on how you want to exit.(big numbers or two MACD bars)
In a recent blog post I wrote an article that talked about one of the characteristics of a successful trader. In a nutshell, I said that these traders always look for what is good about a trading system and stick with it and make it work. Below I have included an email from a fellow trader who has done just that. He was kind enough to want to share his strategies with all of you. I have included his exact email to me. To read that blog post... http://www.askjeffwilde.com/78/3-road-blocks-to-investing-success/
Hi Jeff,
First of all - Thanks for your work. It is outstanding, and I
really appreciate videos etc. That's the how we learn, not only
e-books.
For the Forex Profits method to trade the forex I have a
suggestion (for me, personally, it's an improvement) for the
"nervous" traders and I'd like to share it with you and your
customers.
I made a paper back-test on the EUR/USD chart, so here is my 1
pip.
It was always hard for me to be a discretionary trader. And your
method requires some discretion like when to enter the trade or
not to enter (after big moves for example). Also this MACD
levels are things that can make me crazy, I can tell you that
:-).
But on the other hand your method has all a strategy in forex
needs: Trend following and Price action! So I did not give up...
Here's the hard fact:
Apply on the 15min (yes, 15!) EUR/USD chart a 20SMA with trading
envelopes 10 points below and above the moving average. This is
your trading arena.
Then you watch for the right setup.
And now the point:
Use the SMA as a stop loss if the entry is above or below the
ENVELOPES.
Use the envelopes as a stop loss if the entry is inside the
trading area!
Determine the distance between entry and stop loss. This is your
profit target. This is very important !
Now you have a 1:1 win/loss ratio.
Don't be greedy, never! I know, you will miss big moves. But you
will see, that there are more winners than loosers! For me, it's
perfect. Thank you so much Jeff for your ideas.
I tested this method one year back, OUTSTANDING!
One thing I want to add: Trading time was 1am - 3pm EST (but it
is alright to do less!). Important is to be in front of the
screen when Frankfurt and London are on their way.
Don't know, if this timeframe will work out on more volatile
pairs like Cable or Pound/Yen. Will have a look. If you want to
change timeframes you will also have to change the SMA !
Greetings from a German in Greece,
Mark
1.Which stop loss and take profit method did you use for results you posted on your homepage? 2.Which timeframe was that and despite of the impressive results - which timeframes would you suggest for a "nervous" trader? 2h? 3. As no one can sit 24/7 in front of the screen, how to handle SL in case the trade is going overnight? 4. Assume, we are stopped out at the suggested level of the signal candles' low -10pips. Do we enter a new trade if the MACD is still in the direction of the previous trade? - Mark Answer: Mark, I used a 60 minute chart and exited at the nearest big number. I also placed my stop 10 pips below the low of the setup bar for buy trades and 10 pips above the high of the setup bar for sell trades . For a "nervous" trader use the 1 or 2 hour. If you are holding overnight then you would just place a stop loss in the market so that you can walk away. You could reenter as long as you have a new candlestick that meets the system requirements. Q: Hello Jeff, I have 2 questions:
1. Say we are in a long position and
the MACD turns negative for 5 bars and we get a trade setup
going short but we are still in the long position that has not
been stopped out, do we close the long position and take the
short trade??
2. In one of the months FAQ you make
mention to a student named Sanjay and a reference to the "IB
strategy" from your "trades secrets program". I would very much
like to know more about this. Is it a different course you
provide. Where can I find information about this strategy?
Again thanks for all your help and I
appreciate you taking the time to read this email. Best Regards
Dirk
A: Dirk, odds are that if you have been riding a trade that has been profitable for awhile, you should have already hit your big number targets and those can be great places to take profits. If however, you are still in and 5 MACD bars occur in the opposite direction I would just exit your position. You can't enter in the new direction unless you also have the appropriate candlestick formation. Generally if I have 2 bars go below the histogram when I am long in the market I am going to look to get out as this is a sign that momentum is waning. Q: Jeff, Correct me if I'm wrong, but if you place a trade and want to get up and go do other things, you'll need to look for big numbers and put in your stop-loss and profit stop from the outset? If you're using two MACD bars for exiting, you need to be monitoring the situation constantly? I guess this leads to the third question, is there anyway to have a program that automatically exits when two MACD bars are achieved? thanks, Tyler A: Hi Tyler, the answer is yes to your first 2 questions. For question 3, I am pretty sure that a program could be written to help you with the automatic exits, but... I am really a dummy when it comes to that stuff. If anyone can help Tyler please let me know.
|
