how to start trading with a strong base for success
TRANSCRIPT
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Before heading into the trading world,
there are some basics you should know
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What will be your trading approach?
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Technical analysis. Fundamental analysis.
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Fundamental Sidecause of price movements
Technical Tradersprice movement
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Macroeconomic Indicators
interest rates, employment rate and general health of
the economies.
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Technical Analysis historical price data from the
charts and attempt to forecast the future behavior
or direction of price.
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INFORMATION
PRICE
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There are many indicators that are used in technical trading systems.
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Trend Lines Fibonacci
Stochastic Oscillator MACD
Moving Averages Relative Strength Index
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Most charting packages come with more indicators than you will ever need
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Head and ShouldersTrianglesWedges
…
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Counter Punch Trader
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Most traders, both new and experienced,
tend to focus their trading system on a
technical level
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It doesn't matterwhich approach you use for your trading
system
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Many traders start to back test
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When you back test, you have the luxury of
looking at different scenarios
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Hindsight Bias
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Test your trading system by forward testing
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There is no excuse to not forward test.
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You can trade with any amount at some
brokers
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For the new trader, they are able to trade in "units" which can be
a lot lower than the micro account.
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We now look at opportunity & expectancy
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Expectancy
(Probability of winning x average win) -(Probability of losing x average loss)
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You do not want your trading system to have a negative expectancy
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What is opportunity?
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X the expectancy of your trading system with opportunity,
see how much you can possibly make
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We know psychology plays a huge part in your success…but
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All that is meaningless without having sound money management
principles
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It is all about risk and preserving your capital
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The general rule of thumb for traders is to
risk between 1-3%
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This was a "food for thought" video
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Pick your system
Test it and
Don't bet the house