Tim Black hosts the live trading room for the Asia trading session. His background is in computers and technology. He is addicted to technology, charts and technical analysis and enjoys teaching and sharing his viewpoints in these areas.
Patrick Hughes is an old friend of mine who has (finally) listened to me and is learning how to trade. He’s only been at it a few months, but is already handling his trades like a pro. He has some awesome advice for newbie traders. Those of you in the Winners Edge Trading room, will know him as Pick Dog. So without further ado:
Coffee in one hand, cigarette in the other, I watch the candles move. They blur, taking on a life of their own as the monster breathes. Uptrend, downtrend or ranging; the candlesticks remain in continuous motion as this beast meanders along its path. Regardless of the speed, volume or movement, rest assured (or not) the market makers are pulling the strings, because it is they who control this beast.
So how does one take advantage of this monstrosity of capitalism? I hope to help the newbie trader sort it all out.
I’ve listened to so many people talk about indicators; stochastic, harmonics, Fibonacci, Elliot Wave, Supply and Demand? Bullish aardvarks and bearish wombats! The list goes on and on, ad nauseum. Traders all have their own little bag of tricks that is deep and completely overwhelming. I’ve yet to ascertain if it’s all really just smoke and mirrors, but I have determined this; if they believe it, and you believe it, then it becomes a self-fulfilling prophecy. The market will do what everyone thinks it will, because they watch, act, and do by the charts. This does not mean you have to use every new fangled gadget on the market, buy into the most elite club of traders, or have thousands of dollars to start trading, but one of the first things I did was align myself with successful traders. I chose Winners Edge Trading; www.winnersedgetrading.com which I consider a perfect choice for guidance and mentorship. Learning from proven traders that provide hands on training, question and answer sessions as well as video tutorials increases your chance of success. Then I learned the indicators, not because they’re magical, but because other traders use them. I recommend a working knowledge of a few of these trading strategies, but don’t labor, stress or pour over them religiously. Learning a few of these will better equip the new trader to anticipate price action, which is a very important aspect in trading. Price action trading (my preferred methodology for trading) is the art and skill of making all your trading decisions off a stripped down or “naked” chart. Naked charts are devoid of lagging indicators outside of a few moving averages that help determine dynamic support and resistance areas. I believe in the KISS method: Keep It Simple, Stupid! As for having a ton of money to play this game, sure, it helps, simply because there is more margin for error, and of course the obvious, the pay out is exponentially greater the more you can afford to trade. It is not impossible to start with a small account and build it, but no matter the size, there will always be inherent risks. This brings me to what I consider the most important advice I have gleaned thus far: manage your risk!
Risk Management is by far the most important aspect in this capitalistic game of cat and mouse. You can’t play with more than you can afford to lose, praying for that big pay off, only to acquire your first margin call. A trader must be diligent in risk management analysis. As a newbie, I found this hard to comprehend, wondering how I would ever make any money, if I couldn’t risk more. I learned fast that risking only 2.5-4% of my total account was a very important aspect, when it came to putting my first losing trade behind me. Had I not listened to my mentors at Winners Edge Trading, I would’ve had my first margin call within the first week of this undertaking. It doesn’t matter the size of your account, if you don’t manage your risk, eventually you will experience that “sick to your stomach, just got the wind knocked out of you, can’t catch your breath, as you watch all of your money go in the deep pockets of the evil market makers” feeling. If you’re in this game to get rich quick, save your money and go back to work for the establishment. But if you’re planning for financial freedom, then plan for your future. If you want to be here next year, making money and learning how to live your dream, manage your risk. Remember: every pip in the bank, is a pip in the bank, period! Manage your account, watch it grow, but remember; patience is a virtue.
“If you fail to plan, you plan to fail.” Make a plan, work the plan, stick to the plan, and reap the benefits. Or don’t make a plan, trade however you want, and go home with your tail between your legs. The choice is yours, and so is the blame!
“Trade safe, trade wise, or don?t trade at all!”
Latest posts by admin (see all)
- Money Management in Forex: More Than Just Trading - February 17, 2018
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- Using Multiple Trendlines to Identify Better Trades - February 15, 2018
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