Forex - work or play? What do you think? - page 17
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You can start the discussion with the rules of MM to get to the truth. Many people know these rules, but not many people know that they are the rules of MM or even the laws of the market.
I asked many people to name at least one MM rule, but none of them has named it.
And now I ask you again! Can I ask you if you know the MM rules or the market laws?
Where did I say the word scam?
I went through it all on my own. I've played poker, I've placed bets on a sweepstakes and I have a good idea how it all works. And I don't understand how you can call forex a betting game.
To be honest, at first I thought that a dude coming from the stock market to forex should probably have an idea about trading. I really did not expect to be so clueless.
And by the way roulette is a scam.
There is enough information about MM rules on the Internet. They include the principle of opening positions with the risk/profit ratio of not less than 1:3, and using not more than 10% of the deposit in open positions, etc. But as practice shows "what is good for the Russian is bad for the German", I mean that in my opinion, psychology plays the most important role in trading. Risk and money management with the same initial conditions using one algorithm can lead to different results in the end. This means that each trader develops the system of money management for oneself, taking some base moments in case this trader wants to stay in the saddle. IMHO.
The rule of the golden ratio can be classified as a trading rule, but it is more of a general rule of proportions or ratios.
And here the rules are a little different.
Rule #1, which a trader must follow, is buy cheaper, sell dearer.
Rule #2 is never trade at a loss. (i.e. do not close with a loss).
Rule #3, demand breeds supply.
Rule #4, price always looks for the best supply.
Rule #5, price is always driven by demand.
Rule #6, the market always seeks equilibrium or balance.
A breach, of one of the rules, always leads to a dump. The entire system of forex is built on these rules. I will probably write about the rest later.
If we consider the reasons of most losses of traders, then they are just related to the violation of rules 1 and 2.
The golden ratio rule can be classified as a trading rule, but it is more of a general rule of proportions or ratios.
But here the rules are a little different.
Rule #1, which a trader must follow, is buy cheaper, sell dearer.
Rule number 2 - never trade at a loss. (ie, do not close with a loss).
Rule number 3, demand breeds supply.
Rule #4, price always looks for the best offer.
Rule #5, the price is always driven by demand.
Rule #6, the market always seeks equilibrium or balance.
A breach, of one of the rules, always leads to a dump. The entire system of forex is built on these rules. I will probably write about the rest in the future.
If we consider the reasons of most of the traders' losses, then they are just connected with violation of rules 1 and 2
There is enough information about MM rules on the Internet. This includes the principle of opening positions with the risk/profit ratio of not less than 1:3, and using not more than 10% of the deposit in open positions, etc. But as practice shows "what is good for the Russian is bad for the German", I mean that in my opinion, psychology plays the most important role in trading. Risk and money management with the same initial conditions using one algorithm can lead to different results in the end. This means that each trader develops the system of money management for oneself, taking some base moments in case this trader wants to stay in the saddle. IMHO.
Here is another thing, it is commonly believed that we sell and buy a pair. In fact, we sell and buy the same currency, if the credit deposit is priced in dollars, then we can only buy and sell dollars. We cannot buy euros because there is no euro linked account. Rule 1 if we buy, the system has to sell to us. And it will sell to us at a higher price, at the ASK price. And if we sell, the system will buy and it will buy at the best price for it, which is Bid. So there is no pairing, there is an illusion that we believe in. And it's the same everywhere.
I highlighted one phrase credit deposit valued at a dollar. I highlighted it also for a reason, but because we do not trade with our money, but exactly with allocated credits. That is, we are given a loan for our money, which we trade with. It is our sal, so to speak, that we get it.
The rule of the golden ratio can be classified as a trading rule, but it is more of a general rule of proportions or ratios.
And here the rules are a little different.
Rule #1, which a trader must follow, is buy cheaper, sell dearer.
Rule #2 is never trade at a loss. (i.e. do not close with a loss).
Rule #3, demand breeds supply.
Rule #4, price always looks for the best supply.
Rule #5, price is always driven by demand.
Rule #6, the market always seeks equilibrium or balance.
A breach, of one of the rules, always leads to a dump. The entire system of forex is built on these rules. I will probably write about the rest later.
If we consider the reasons of most losses of traders, then they are just related to the violation of rules 1 and 2
totally agree with the rules... from personal experience - application of such rules leads to more positive results. I`m just explaining - when I started trading on forex market - 95% of positions were taken to take profit, I could keep serious drawdowns, averaging, but all the same goal was to hold positions till the positive result, even if market entry was not entirely successful. The result was quite good.
But as I gained "experience" (by taking it from literature) I rebuilt the system according to generally accepted rules of money management. My results started to deteriorate, I started to make first fixings of losses and even deposit withdrawals. I started to analyze.... I have come to a conclusion the initial tactics was more effective.
I absolutely agree with all 6 rules. The only thing I would like to point out is that I have to be very careful when using these rules in real trading.
In my humble opinion in this case the leverage should not exceed 1:10 and more effective trading tactics by these rules will work on shares and indices. IMHO.
Here is another thing, it is commonly believed that we sell and buy a pair. In fact, we sell and buy the same currency, if the credit deposit is priced in dollars, we can only buy and sell dollars. We cannot buy euros because there is no euro linked account. Rule 1 if we buy, the system has to sell to us. And it will sell to us at a higher price, at the ASK price. And if we sell, the system will buy and it will buy at the best price for it, which is Bid. So there is no pairing, there is an illusion that we believe in. And that's the way it is everywhere.
I highlighted one phrase credit deposit valued at a dollar. I highlighted it also for a reason, but because we do not trade with our money, but exactly with allocated credits. That is, we are given a loan for our money, which we trade with. It is our sal, so to speak, to us on our knuckles.
Rule No.1 can be ignored. As the saying goes: "What is expensive today will be even more expensive tomorrow". It follows that you do not need to catch the first pullbacks, that is, do not stand against the movement, which, by the way, many do, just go against the upward movement, believing that they sell at the best price, and without setting a stop wait for pullbacks, as a result the rule number 2 comes true, but the closing is not a loss, but a stop-out. For example, like now, I wonder what kind of guru you have to be to buy the euro at 1.1050?
it all depends on the distance a trader trades.... If it's an intraday, it's probably not the best decision to buy a euro at 1.1050, but if the trader opens a long position, it's a good enough price to buy it to form a long position. IMHO.
And again I would like to emphasize that in order to avoid stop-outs there must be only one condition - to open a position with minimum leverage. Then the trader will always have an opportunity to average, hedge a position or apply some other methods to prevent losses in a deal.
here... that's useful information...
totally agree with the rules... From personal experience, applying these rules leads to more positive results. I`m just explaining - when I started trading on forex market - 95% of positions were taken to take profit, I could keep serious drawdowns, averaging, but all the same goal was to hold positions till the positive result, even if market entry was not entirely successful. The result was quite good.
But as I gained "experience" (by taking it from literature) I rebuilt the system according to generally accepted rules of money management. My results started to deteriorate, I started to make first fixings of losses and even deposit withdrawals. I started to analyze.... I have come to a conclusion the initial tactics was more effective.
I absolutely agree with all 6 rules. The only thing I would like to point out is that I should be very careful when using these rules in real trading.
In my humble opinion in this case the leverage should not exceed 1:10 and more effective trading tactics by these rules will work on shares and indices. IMHO.
Andrii, personally for you I can right now record a video on how to calculate risks with a leverage of 1000, and I will definitely do the same with a leverage of 50. If I am interested, please let me know. There are no problems or obstacles. You will feel as comfortable working with a leverage of 1000 as with 50 or lower.
We are normal, not fools, and will not put half a deposit in one transaction, that at high leverage with minus=20pp we were closed on Margin Call
Andrii, personally for you I can right now record a video on how to calculate risks with a leverage of 1000, and I will definitely do the same with a leverage of 50. If I am interested, please let me know. There are no problems or obstacles. You will feel as comfortable working with a leverage of 1000 as with 50 or lower.
We are normal, we are not fools, and we will not put half-deposit in one deal to be closed by Margin Call at high leverage with minus=20pp.