3 Tips to Instantly Improve Your Trading Results
#490: 3 Tips to Instantly Improve Your Trading Results
In this video:
00:27 – 3 Trading Tips for you
00:55 – #1 Declutter your charts
02:40 – #2 Get onto the higher time frame charts
05:25 – #3 Control your risk and drawdowns
08:05 – Let’s recap the 3 trading tips
08:23 – Join one of my free webinars
I’m going to give you three trading tips which you can implement today. And these tips will massively improve your trading results. So let’s get into it right now.
Hey, there traders, Andrew Mitchem here at the Forex Trading Coach with video and podcast number 490.
3 Trading Tips for you
And I want to give you a three tips today, which if you implement them today in your trading, they will, without doubt, improve your trading results.
And you will know if you’ve been trading for any length of time that you see out there, that 90 to 95% of all traders lose money. Why is that? Well, it’s because most people fail on these points.
#1 Declutter your charts
So let’s talk about point number one. So the first thing you can do to help improve your trading results is to declutter your charts.
More than likely, you will have lines and indicators and dots and arrows and squiggly lines and all over charts. And the brokers are incredibly good at promoting indicators. And when you go on to most forum sites out there, they are incredibly good at giving you strategies and formulas which involve far too many indicators. And basically most indicators out there lag time and they can only draw plot something on your charts from historical data.
And that’s the problem. They’re all a combination may be slightly more reactive or slightly slower, but ultimately what they do is tell you what’s already happened and just plot it on your chart in a in a nice pretty form with a few lines and dots, etc.. The problem is, is that most people get completely naturally confused and they get convinced that what those lines tell you is how you should trade.
And that has a number of problems in that everybody seems to think they’re going to find the holy grail of combinations of different time settings, etc. And when this line crosses that line, then the dot appears up here. That’s how you trade in when you should trade. The problem is, is that, of course, takes away all the skill of trading.
It takes away from looking at what’s happening in the market. It avoids you looking at the price and the really important that you should look at the price on the right hand side of the chart, because that’s the most important thing. It takes away you looking at currency strength and weakness. It takes away all those skills that you need to be a good trader. So the first point would be de-clutter your charts.
#2 Get onto the higher time frame charts
Point number two would be to get on to the longer timeframe charts. Probably you are trading too much and on too short a timeframe chart. That’s what most people do and that’s where they become. They fall into the trap of feeling that they should be trading all the time. And most people, when they start thinking, Well, if I go to the five or 15 minute time frames or dare I say the one minute time frames, I’m going to find more set ups.
I’m going to make more money because I can just scalp a few pips here and there. There are multiple issues with that and I don’t know where to start. So there’s the issues of you over trade. You spend far too much time, a chart. Every trade that you make, the spread becomes a massive part of your trade.
Because if you’re making like, let’s say four or five pips and the spread happens to be two pips on that trade, then you know, effectively your you made seven pips to make five or something like that where you’re making five, you’re really only making three and you’re going to get stopped out of trades all the time. So get away from those shorter timeframe charts because they will do no favors whatsoever.
Get on to the longer timeframe charts. Now, really longer timeframe charts would be probably something sort of 2 hour charts, 4, 6, 8, 12 daily, weekly and even monthly. But get onto those longer timeframe charts because if you look at, let’s say the daily charts, what that means is you can look once a day. It doesn’t matter where you live in the world, you can look at your charts once a day. At the same time, which when the daily chart changeover is 5 p.m. Eastern Standard Time, that’s New York time.
At that same time, we go and look through the 12 hour, eight hour and the six hour charts so we can cover four timeframe charts at that one time and then at 5 a.m. New York time, because that is then into a more active trading session. With the European session, we look at the two hour, the three the for the six and the 12.
So we’ve got five timeframe charts, all of that one time. You can do those two changeovers if they suit you if your time zone in under 30 minutes easily once a day and thanks you trading done. So really important that you do that and you look at the close of a candle if you’re looking at the close of a candle on let’s say a 12 hour chart, you can look twice a day.
If you’re looking at that on a five minute chart, you’re going to be just stuck there, glued your screen all day and night. And it’s not something you’re going to do with longevity or enjoyment. So longer timeframe charts definitely help and they’re more reliable and offer better reward to risk out of your trades as well.
#3 Control your risk and drawdowns
Point number three and control the risk that you take per trade.So many people don’t understand risk. If you look at prop firms, for example, one of the best ways of passing your prop firm challenge is to keep your risk low. You know, it doesn’t matter if you can make 20%, but the regain. But the problem is if you have a drawdown of 20% or 30% to do that, you’re failing your prop, Then why do prop firms do that?
Well, they want to preserve their capital. So as a trader, that’s your number one priority is to preserve your capital so we can talk about strategies and taking out the A-grade trades and all that type of thing. But if you don’t know how to control your risk and keep your risk low and equal per trade, it just completely disadvantages you and you’re going to get absolutely smashed and you will lose money and you will then maybe open another account or then eventually give up and blame the market, blame everybody else.
But the problem is, is you did not control the risk on each trade. So forget about making pips. Forget about the stop loss being an X number of pips, so your profit being an X number of pips just to get that put the stop loss where it needs to be for that particular trade. According to the pair you’re trading, the timeframe chart, the current market conditions, if there’s lots of activity or not, put that stop loss in the right place and then adjust your lot size to ensure that your risk is a set and known level that you are comfortable with.
For me personally, I never risk more than half of 1% of my account per trade. And then people go, Well, Andrew, how on earth can I make money if I’m only risking half of 1%? Easy! You just have to learn how to trade first. Once you do that with low risk, you can then get on to things like prop firms or managing funds for other people or whatever it is that you want to do.
Don’t worry about your account size today. Don’t worry about that sounding like a really low risk because it is a low risk deliberately. Because if you believe most people out there on the Internet land and YouTube and everywhere else, they will tell you to risk 3% to 5% per trade. That is utterly mad. Do not do that. Two or three trades your, you know, 15% down.
Think about it this way. If you get to 50% down on your account, in other words, you’ve gone from let’s say a 10,000 as an account to a $5,000 account, you now need to make 100% gain on your account size, which is now $5,000, just to get to break even. So you then start that mentality of gambling and it just becomes a big mess. Do not do that.
Let’s recap the 3 trading tips
So to recap those three important points that you can start doing today. Number one, declutter charts. Look at the price. Number two, get onto the high timeframe charts. Look at the close the candle. Number three, learn to control the risk you take portrayed and forget about Pips.
Join one of my free webinars
If you’d like more information, if you’ve not been on one of my free webinars yet, I held two different sorts of webinars, one for new traders, one for the more experienced traders.
I highly suggest to get on to one of those if you’d like, help with point number three about controlling risk. Have a look at my website for free lot size calculator that works on empty for an empty five and I will put a link to that on this video and podcast as well. And if there’s anything else that we can help you with here, Forex trading coach would gladly do that.
Send me an email [email protected] or put a comment if you’re watching YouTube on this video and I’ll be pleased to help you with your questions.
So once again, this is Andrew Mitchem here at the Forex trading coach. Have a great week ahead. And I see this time next week. Bye for now