How Much to Risk per Trade and How to Calculate that Risk?

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#405: How Much to Risk per Trade and How to Calculate that Risk?

In this video:
00:29 – Email from a podcast listener
00:59 – How do you calculate your risk amount
01:20 – Download my MT4/MT5 Lot Size Calculator 
01:55 – The logic behind lot sizing</span
02:38 – Lot size examples
04:58 – How to use the Lot Size Calculator trading script
05:27 – Know the stop loss size of your trade to calculate your lot size needed
06:29 – Email me any topics you’d like me to discuss on future videos and podcasts

How much should you risk per trade? And also how do you calculate that risk? Let’s talk about that and more right now.

Hi Forex traders, it is Andrew Mitchem here at The Forex Trading Coach with video and podcast number 405.

Email from a podcast listener

I’ve received an email this week from a trader called Diop, and Diop by the way you said you’ve started listening to all my podcasts and you’re currently up to number 202. You’re about half way; this is number 405. So well done for listening through to those. You said you’re really enjoying them and you understand the concept of… You said you’ve been looking online and you should risk somewhere between 1-5% of your account per trade. You also know that in my case I suggest that’s still way too high, and you should actually be half of that. You should actually be half of 1% risk per trade.

How do you calculate your risk amount

But your question is how do you calculate that and what do you do with your trading in order to make that happen? And to ensure that you have controlled risk but also some of those bigger stop-loss trades aren’t going to wipe out your gains.

I can see where you’re coming from, but also I think there’s a slight misunderstanding there.

Download my MT4/MT5 Lot Size Calculator 

I’ve given you the very quick answer, the quick answer is to download my lot size calculator. It works on MT4 and MT5 and I will put a link on this video and podcast post so you can get a free copy. Of course, that applies to anybody who would like a free copy of that. It’s really, really easy and it takes you about five seconds to do. All you do with it is you drag it onto your chart, you put the stop-loss of the trade that you’re wishing to take, literally just type it in and press okay and it will tell you the lot size that you need for that trade.

The logic behind lot sizing

So the thing that you need to understand from a manual point of view, to understand the workings behind that, is that you have to understand that different currency pairs pay a different amount per pip depending on what the currency pair is and also what your own account denomination is. So Diop I notice you’re talking about your account being in pounds. So your account in British Pounds, let’s say with £100.00 would obviously be very, very different to my account with $100.00 New Zealand Dollars, or someone with $100.00 US Dollars. So it’s the account denomination that is affected plus it’s each individual currency pair that has different amounts per pip.

Lot size examples

But, for the sake of this, let’s say very easy round numbers. Let’s say we have a US Dollar account and we’re trading the Pound/US or the Euro/US. Notice that the US is second there in each of those currencies. If you’re trading one standard lot, that’s 1.0 lots, that pays $10.00 per pip. If you are trading a mini lot, that is 0.1 lots, that pays $1.00 per pip. If you are trading a micro lot, that is 0.01 lots, that pays $0.10 per pip.

Now let’s say for example, and again ease of numbers, so let’s say you have a $10,000.00 account. If you have that $10,000.00 account it means if you’re risking half of 1% on your trade it means you are risking $50.00 on that trade. So $50.00 per trade. It doesn’t matter what the stop-loss is, what the timeframe is. Let’s say it’s $50.00 per trade you are risking, because that is half of 1% of your account, which is $10,000.00. Okay? So let’s say you were doing that. If you have a 50 pip stop-loss, again for ease of numbers ease of calculation, you’re risking $50.00 you have a 50 pip stop-loss. Therefore, you need to trade at 1.0 lots. One mini lot on that particular trade. Because it means you’re risking $1.00 per pip. 50 pips goes the wrong way, it means you’ve lost $50.00 and therefore that means you’ve lost the pre-known amount on your account, which is half of 1%.

So let’s now use the example of a trade with a 100 pip stop-loss. Therefore, you need to risk half of the previous lot size because you’ve gone from a 50 pip stop-loss to a 100 pip stop-loss. Therefore, instead of risking 0.1 lots per trade, if you trade now has a 100 pip stop-loss, you need to risk 0.05 pips per trade. Five micro lots. Therefore, as another example, if the trade has a 25 pip stop-loss, you need to risk double. So instead of 0.1 lots you’re now risking 0.2 lots.

Now, that should be fairly straightforward. And if you struggle with that, just go through the numbers, the basic numbers and you’ll soon figure that out.

How to use the Lot Size Calculator trading script

But as I said, the easiest way of doing that is to forget the manual side of things, drag on my script, put in the stop-loss, it tells you answer. Because the great thing about the script is it knows your account size because it can read it off MT4. It knows the account denomination because it can read it off MT4, and it knows what chart you’re looking at trading because you’re dragging it on to that particular chart. Very, very simple. It’s a massive time saver. It keeps you risk-controlled and known.

Know the stop loss size of your trade to calculate your lot size needed

So, don’t forget. First of all you do need to know the stop-loss size of your trade in pips. It’s the only real time you need to worry about pips. You’ve measured the stop-loss of your trade in pips, but it is the lot size that you place on that trade that is the big determining factor that keeps your risk low per trade. Don’t just go placing 0.1 lots of a trade, or 0.05 or whatever it is. Don’t just do the same on every trade regardless of its stop-loss size or its currency pair that you’re trading. The important thing is that you have low controlled and known risks on every single trade. Therefore, you could trade a weekly chart trade that may need to have a 150 pip stop-loss, or you can trade a five minute chart trade that might need to have an eight pip stop-loss as an example. So every trade has the same risk, it’s the lot size that you place on that trade that is the thing that changes.

Email me any topics you’d like me to discuss on future videos and podcasts

So, Diop I hope that helps. If anybody else has any questions just like this, and thank you very much for emailing that through as well by the way. If you have any questions like this that you’d like me to cover on future videos and podcasts to help you out, we are here to help.

So once again, this is Andrew Mitchem at The Forex Trading Coach. Don’t forget to download my lot size calculator. It will be on this page. Bye for now, see you next week.

Episode Title: #405: How Much to Risk per Trade and How to Calculate that Risk?

Click Here to Download my FREE Lot Size Calculator

Learn More About My Course. Click Here!

If you have been trading for less than 6 months, click here

If you have been trading for more than 6 months, click here

Click Here to Check my Recommended Brokers.

The 30 Minute Trader Trip

Watch how Andrew made a +12.79% gain on a live account during 4 weeks while trading for just 10-30 minutes a day while on holiday in the UK and France.

CLICK HERE TO ACCESS THE VIDEOS >>

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Thinking of Giving Up Trading?

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#404: Thinking of Giving Up Trading?

In this video:
00:27 – Adolfo, a trader from Mexico
01:15 – He could see the benefits of trading
01:55 – Ready to give up?
02:15 – Adolfo found my weekly videos and podcasts
03:20 – You were different
03:43 – Our 3000th coaching client

This trader nearly quit the Forex world a couple of years ago, is now back into it and loving it. If you’re in that position where you’re thinking about giving up this video’s for you, let’s get into it.

Hey traders, this is Andrew Mitchem here at the Forex Trading Coach with video and podcast number 404.

Adolfo, a trader from Mexico

I want to talk about a client of ours called Adolfo. Adolfo’s from Mexico. Now he got to a stage a couple of years ago where he quit trading. And, he’s only just got back into it but I want to give you a bit of a background about him first, because a lot of people would be in this very similar position. Now last week I sent out an email with the video that I had with Adolfo and I put a link on this video and podcast as well, so you can go and watch that if you’ve not already seen it, but the reason I want to talk about it again is because I’ve had so much feedback from people saying, look I’m in that position.

I’ve tried things, I’ve seen the merit in trading, I’ve seen the potential and Adolfo is exactly the same as you, if you’re thinking this right now.

He could see the benefits of trading

He could see the merit of trading, he could see the benefits of trading, he could see it as a way of building his wealth. But he’d been to a trading school over in Mexico and it basically taught him nothing. He said he actually came out of it with more questions than answers. He just did not get what he wanted, he didn’t get a strategy, he didn’t get any common sense out of any mentors or tutors. And it just didn’t feel that it was worth it, and he got disillusioned. And he’d spent a lot of money and committed a lot of time and it just wasn’t working. So is that that stage, where he’s, just ready to give up, just wasn’t working.

Ready to give up?

And if you’re in that position, you can relate to it. And we’ve all been there, I’ve been there as well, took me four years to really turn my trading around. And that’s a long, long time. It’s easy to say, Oh it just took me four years. But when you are in that situation, when you’re in the middle of that, it is tough. And I’m sure that you can relate to that.

Adolfo found my weekly videos and podcasts

So, a few weeks ago, back on the 11th of February, just five weeks ago. Adolfo found my video and podcast, exactly like you’re watching or listening to right now. He wrote to me, and he said, look I’m needing some help, I’ve been trying this, given up a couple of years ago, did this expense of school, wasn’t working, what can you do to help?

And so Adolfo went on to one of my free webinars for the whole each week, and he saw what we did and saw that we’re real people and real traders, and we’ve been doing this for nearly 12 years, and all the things that I talk about all the time, about a practical, real approach to trading and plus with the help and webinars and forums, et cetera, that we help our clients with all those different ways of trading. But it was the actual, real working, practical, approach to trading that Adolfo liked. So he jumped on board with us and you can see the video, I’ll put a link on here, so you can go and watch it.

You were different

Now Adolfo said, and I’m going to quote what he said. He said, “Thank you for your honesty. There are lots of schools, there are lots of people coaching, but Forex to me just didn’t sound fair until I met you. I needed someone with real life trading knowledge and teaching experience.”

And, that’s what he’s got. And that’s the difference I suppose, in many ways of how we can help people.

Our 3000th coaching client

Now, it Adolfo was actually not only lucky that he jumped on board and found us, but he was actually our 3000th coaching client. And so, you may recall a few weeks ago, I was holding a bit of a sort of offer, a bit of a promotion and the 3000th clients who joined us, and of course, no one knew who was going to get that, had the course completely for free. And that was Adolfo. So Adolfo not only he joined, but he then… and he’s really pleased with what he got. But then a week later we said, hey, you’re our 3000th client, here’s a full refund. So that was pretty cool.

So I’m going to be carrying on interviewing Adolfo over the coming weeks, coming months, coming years. And I’ll be updating and posting videos like this, giving you feedback from him and showing you how he’s progressing and how we’re helping him progress. So once again, I’ll put a link here. You can go and watch that video if you’ve not already seen it. I hope that helps. So this is Andrew Mitchem here at the Forex Trading Coach. I’ll see you this time next week. Bye for now.

Episode Title: #404: Thinking of Giving Up Trading?

Click her to watch Adolfo’s Intervew

Learn More About My Course. Click Here!

If you have been trading for less than 6 months, click here

If you have been trading for more than 6 months, click here

Click Here to Download my FREE Lot Size Calculator

Click Here to Check my Recommended Brokers.

The 30 Minute Trader Trip

Watch how Andrew made a +12.79% gain on a live account during 4 weeks while trading for just 10-30 minutes a day while on holiday in the UK and France.

CLICK HERE TO ACCESS THE VIDEOS >>

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How to Profit as a New Trader with a Small Account

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#403: How to Profit as a New Trader with a Small Account

In this video:
00:24 – Email from a guy who is looking at starting trading
01:05 – Joining a group of like-minded successful people
01:59 – Real examples from this week
03:12 – Profit from other traders
04:22 – Client mentions trade live on the webinar
05:00 – Learn the “How To” by following other traders
07:03 – Walk before you can run
07:17 – Our 12th birthday is in May

How can you profit in the Forex market if you’re starting with a smaller account and you’re starting out as a new trader? Let’s talk about that and more right now.

Hey traders, it’s Andrew Mitchem here at The Forex Trading Coach with video and podcast number 403.

Email from a guy who is looking at starting trading

Now, this week I’ve received an email from a guy over in the U.K. who’s actually in the army, and he’s saying, “Look, I’m looking at leaving, but I want to ensure that when I start trading, I’m actually going to make some money. How do I do that? I’m new to this, I don’t know anything about it, and my concern is that when I start trading, because I’m new and I don’t know what I’m doing, I’m going to lose money and I’m going to lose confidence, give up, and it’s just not going to work. So can you give me some suggestions?”

And I went back to him and I said, “Look, there is nothing more powerful than being involved with a group of successful people. It doesn’t matter what you want to do.

Joining a group of like-minded successful people

If you’re into sports, you’re going to learn how to be good at that sport, let’s say, from sports groups and mentors, tutors, coaches. If you want to do good things in music, you go and join a band and you learn how to play as a group, that type of thing.” And I said to him, “Look, to be honest, trading is no different. Yes, you can do it alone. Yes, you can find things online and you may or you may not eventually make it work for you. But the problem is, is that eventually question is the problem, and what can you do to ensure that?” Obviously, this guy’s in the army, he’s a team guy, he works hard as a group, et cetera. And I said, “Look, all you have to do is exactly the same as that, but find someone like that in trading.”

Real examples from this week

And I want to give you some real examples from this week. These are real actual trades that we’ve taken, because I said to him, “Look, just look at this week as an example.” I said, “Well, February just gone, we had 6.2% on our daily trades, so you could have followed along with that.” Because my point to him was actually about why not follow good traders and profitable people so that you’re growing your account while you’re learning, rather than just throwing money away on just random trades and losing trades? So from this week, we’ve had a trade on the weekly charts that closed out with a 4.2 to one reward to risk on the Australian-Canadian dollar. It’s actually from the previous week, but it closed this week 4.2 to one. So risking half of 1% on that trade, 2.1% gain on your account. How’s that for confidence, just one trade?

On our forum site this week, we’ve had trades posted on the 12 hour, the eight hour, the six hour, the four hour, the two hour, the one hour, 30 minute charts, all profitable trades for people to follow along with. We’ve had daily trades that have gone well. Our breakout’s gone well. We’ve had a trade yesterday. This was an interesting one and a prime example.

Profit from other traders

As I was putting together my weekly live webinars for clients yesterday, yesterday afternoon, my time, up popped a post on our forum site saying, “Canadian yen, buy trade six hour charts.” One of our clients popped it on there and said, “Look, this is looking really good. When the candle closes in 10 minutes, this is looking good.” I was preparing the webinar. I went to look at the Canadian yen, and I wrote back to him and I said, “Look, this trade looks fantastic. I’m taking it.” And so I took it, posted it on the forum, put the screenshot on there. People could follow along because they get notified of posts like that.

And the trade has hit full profit, and on that Canadian yen trade, I made a 3.1 reward to risk. So half percent risk, again, just over another 1.5% account gain. Our daily trades closed just 10 minutes before I made this video, Friday morning here in New Zealand. 2.9 to one reward to risk. Again, pretty much a 1.45% account gain. That was posted on our membership site earlier this week.

Client mentions trade live on the webinar

On that live webinar last night my time, Hayden, a client of ours, mentioned towards the end a 30 minute chart trade on the pound-yen. We looked at it and we go, “Yep, Hayden, awesome. Thank you for writing that down.” He typed it in live on the forum. Made a 1.9 to one reward to risk. Pretty much a 1% gain, half percent risk on that trade. And currently right now, as I’m making this video, I’ve got live trades which have all been posted on the forum site or on our daily trade suggestions on our membership site. Currently, I’m up 1.5% on open trade as well.

Learn the “How To” by following other traders

So you put all that together and you think, “Well, as a new trader, wouldn’t I really want to be part of this?” Yes, the results are great, but it’s about learning how to do that as well and learning in real time following people, and basically you are educating yourself with a group of knowledgeable, experienced, real life traders. And that, to me, is the way for you if you’re a new trader or you’re starting out with a small account, is that you have to learn to do that and to see those trades and take those trades, and there is no better way at doing this. This is three different methods as well. By the way, we’ve got our forum site, our daily trades and our live webinars, so three different places to go and follow along and profit from what we’re doing. So follow good profitable traders while you’re learning and you’ll then develop into, like Hayden, who put the pound-yen on there, on the forum site, like the guy, Gillo, who put the Canadian yen on there as well on the forum site yesterday for me to follow.

And I profited from that because I wouldn’t have seen that trade otherwise. It popped up there, and to be honest, I wouldn’t have taken the pound-yen on the 30 minute chart either, because normally I don’t look at 30 minute charts. But there it was on the forum site. So I myself have profited from two of our clients posting really good trades this week. It happens all the time. There’s plenty other examples as well. But, look, if you are starting new, you’re starting with a small account, and you want to ensure that you make some money, but also you’re making a percentage gain, that’s the important point. Don’t look at it and jump in and go, “Well, on a $1000 account, I might’ve made $200 or $100 this week, and that’s not enough to live on.” You can’t expect to do that on a $1000 account. But what you have to do is go, “Well, look, I’ve made 10% on my account with low risk.” And that’s the important point, because eventually your account, when you get good, will grow, you’ll be able to put more money into it. Your account will grow itself.

Walk before you can run

So walk before you can run. Start small, but start properly first time. I hope that helps. I’m going to put a link on this page to our course. If it’s of any interest to you, you know where to find us. We’ve been doing this almost 12 years.

Our 12th birthday is in May

By the way, in May, we celebrate our 12th birthday here at The Forex Trading Coach. Not too many others can say that. We’re really proud of that. We’ve gone over 3000 clients now in 93 countries around the world. It’s worked over all those years. It just works. We love what we’re doing. We love helping people. We love seeing the success of our clients. If you want to join us, you know where we are.

This is Andrew Mitchem here at The Forex Trading Coach. I’ll see this time next week. Bye for now.

Episode Title: #403: How to Profit as a New Trader with a Small Account

Learn More About My Course. Click Here!

If you have been trading for less than 6 months, click here

If you have been trading for more than 6 months, click here

Click Here to Download my FREE Lot Size Calculator

Click Here to Check my Recommended Brokers.

The 30 Minute Trader Trip

Watch how Andrew made a +12.79% gain on a live account during 4 weeks while trading for just 10-30 minutes a day while on holiday in the UK and France.

CLICK HERE TO ACCESS THE VIDEOS >>

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Your Investment Options are Limited

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#402: Your Investment Options are Limited

In this video:
00:35 – Very low returns make headlines
01:37 – UK bank pays me 0.1% interest rate
02:02 – February Daily trades make +6.2% in February
03:15 – Options available if you don’t want to trade yourself
03:40 – TFTC Pattern Trader makes +7.2% gain for the week
04:44 – Forex Insiders March webinar: The Power of Divergence
05:59 – Future proof your own finances

Our daily trading suggestions made a 6.2% account gain just in the month of February. Would you like to know how we did that? And would you like to gain results like that for yourself? If you would, listen up I’ve got some great news for you.

Hey traders, Andrew Mitchem here at the Forex Trading Coach with video and podcast number 402.

As you can see a beautiful day here, and so I figured we’ll come outside and make the video today in the sun.

Very low returns make headlines

Now, a really interesting news story here in New Zealand just this week, and it actually made quite a lot of headlines and it was about a bank who have decided to increase their term deposit rates to a massive 1.7%. Now it was huge news in terms of that was a substantially bigger figure than almost everybody else has, and it made me think about what options do people have when it comes to investing. Now obviously property worldwide seems to be going absolutely gangbusters and that’s fantastic. But when it comes to actually cashflow, there’s still a big problem with most investments. Now, for this bank to advertise a 1.7% return per year and to make big news out of it, you can tell how poor almost all other investments are.

UK bank pays me 0.1% interest rate

Now I still have a bank account over in the UK that I had when I was a kid, and it’s still there from when we could go over there on holiday pre-COVID. That’s paying me over in the UK a 0.1% interest gain. So pretty pathetic. And it just made me think about what else do we have as options?

February Daily trades make +6.2% in February

So as traders, we obviously have a massive advantage when it comes to potential gains. Now I tallied up our results from just our daily chart trades, so this is just on our membership site trades posted to clients on our membership site each day. We had a 6.2% account gain by taking just a half percent risk per trade. So very, very low risk. Something that takes five minutes a day, and all you need to do is follow along with what we’re suggesting anyway. That’s complete set and forget as well, by the way, close at the end of the week but no management. With some very simply trade management clients did a lot better than that. But even as a set and forget, that was a 6.2% gain just in the month of February. Just one timeframe as well, don’t forget. We also post other timeframe charts on our daily trading suggestions like monthly and weekly, 12 hourly etc. We post trades on our forum site and we post that several times a day, so do other clients. We take trades live on our webinars. Plus all the other trades that clients could take themselves.

So you can just see the enormous potential there from trading the Forex market but once you know what you’re doing.

Options available if you don’t want to trade yourself

Now, for some people they may not be interested in knowing how to do it, but we’ve got you covered as well. If you really don’t have the time or the will to want to know how to trade for yourselves, we’ve got a couple of options for you. One is called Echo Trade Copier, and that’s a complete set and forget, do absolutely nothing, get your account mirrored on our master account. That’s a really good option for people.

TFTC Pattern Trader makes +7.2% gain for the week

The other is our amazing trading software called Pattern Trader, TFTC Pattern Trader. Now, the Pattern Trader allows you to create trading robots based on my own strategy. The results of that have just been absolutely tremendous. Just this week, and I’m recording this on Friday so I’ve still got another whole day to go, but just this week my live account on my Pattern Trader account is up 7.2%.

Now will it make 7.2% every week? Of course it won’t. But this week it’s up 7.2% and I’ve done absolutely nothing with that, that’s completely hands-free apart from one trade I decided to manually close. But almost no manual ongoing input. Once you’ve got your bots created, and by the way it’s a simply process that takes you maybe five minutes, we have our own bots on there for people to look at and follow and use if they want to as well. But 7.2% just this week in four days. Again very, very low and controlled risk and draw down, which is absolutely crucial to trading.

Forex Insiders March webinar: The Power of Divergence

One other thing to tell you about, in March… So next week on the 10th of March, which is next Wednesday, I’m holding my monthly Forex Insiders Webinar. It’s free to attend. Last month we did a one hour live session on candle and the feedback from that was tremendous. Next week, or this week when you get this video, on Wednesday the 10th that is going to be on divergence and the power of divergence. Now, if you’ve got any interest in trading the Forex market you’ll know that I think that probably 99% of all indicators out there are completely waste of time, waste of money. But we use divergence and the power of divergence very effectively within our trading strategy. Now if you’d like to know how we do that, and this is a free session, I’ll put a link below this video on this page somewhere for you to be able to register and attend that webinar on Wednesday 10th. It will be a one hour live session, I really urge you to get there. It doesn’t matter where you live in the world, if you have any interest you really need to make the effort to try and get onto that session live. It’s going to be a good one.

Future proof your own finances

So I hope that helps. And if you really want to I suppose future proof your own finances, you can’t get excited by this 1.7% from a bank for a whole year interest rate. It’s terrible. But you can get excited by the daily trades making 6.2% in a month, or like this week with my Pattern Trader bots making 7.2% in a week. So there’s a big difference there. So the choice is yours. But if you’d like to jump on to the divergence webinar, just register using the link here and I’ll see you on that session on Wednesday. Bye for now.

Episode Title: #402: Your Investment Options are Limited

Learn More About My Course. Click Here!

If you have been trading for less than 6 months, click here

If you have been trading for more than 6 months, click here

Click Here to Download my FREE Lot Size Calculator

Click Here to Check my Recommended Brokers.

The 30 Minute Trader Trip

Watch how Andrew made a +12.79% gain on a live account during 4 weeks while trading for just 10-30 minutes a day while on holiday in the UK and France.

CLICK HERE TO ACCESS THE VIDEOS >>

Podcast: Play in new window | Download

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So You Want to be a Scalper?

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#401: So You Want to be a Scalper?

In this video:
00:23 – Is scalping a good idea or not?
00:58 – Can we help you?
01:14 – Some real trade examples
03:11 – You need a good strategy to scalp
04:35 – Send me an email to receive more details
04:57 – Feel free to share this video and podcast

So you want to be a scalper. Is that a good idea, and can we help?

Hey traders, Andrew Mitchem here at the Forex Trading Coach with video and podcast number 401.

Is scalping a good idea or not?

Now you want to be a scalper. Is that a good idea? Well, it depends on what type of person you are, and if you’d like looking at your charts either at a certain time each day, when you know, there’s likely to be more price activity such as the European session, or maybe the US session. But also you need to be the sort of person that’s willing to do that regularly. And you’ve got to be the sort of person that’s willing to be a little bit more active on your charts. So is it a good idea? Well, it depends on you as a person, but it also depends on your strategy as in, does it work?

Can we help you?

And the other question is, can we help? Well, yes, absolutely we can help, because my strategy which I’ve been trading now for the last 14 years, works on all currency pairs and all timeframe charts.

Some real trade examples

Now to give you a perfect couple of examples, just yesterday, I held my client’s weekly live two hour trading room webinar. And on that webinar, we actually took two short timeframe charts. We took a trade on the 30 minute chart on the Australian Canadian dollar, and we took a trade on the Aussie Yen on the 15 minute chart. So both kind of scalping trades. They may not be like one minute charts or five minute charts, which are real scalping, but they are very short timeframe being a 15 and 30 minute chart. So pretty much what you would classify as scalping. And they were both profitable trades. We took them live, on the session, in front of my clients.

The first one, the Aussie Canadian, the 30 minute chart trade, just happened to have a 10 bit stop loss, had an 18 pip profit target. Therefore it made a 1.8 to one reward to risk. Risk half of 1% of your account on that trade. Make a 0.9% almost a 1% gain. It did that in two hours. The other trade that we took was on the 15 minute timeframe on the Aussie Yen. That had a 13 pip stop loss, a 28 pip profit target. And that made a 2.1 to one reward to risk or 1.05% gain. Two trades together, half percent risk on each.

So therefore total of only 1% of my account with risk on those two trades yet I made a positive plus 1.95% account gain. So almost a 2% gain just on two trades, live in front of my clients, for everybody to take, everybody to see. And 2% from one night, two trades took me what, five minutes total, just look through all the charts, see them, take them. 2% account gain. Not bad is it? Especially when you consider that’s way more than the bank’s going to pay me in 12 months.

You need a good strategy to scalp

So can we help you? Absolutely. Certainly we can because the strategy, as I’ve mentioned works across all timeframe charts. You still need to have everything setting up in your favour. The probability, what we’re looking for in terms of candle patterns, bounces round numbers, divergence, all those types of things that we teach, we trade and we look for. And then you have to of course have the strategy and that knowledge to be able to take that trade, all those trades at the exact right time.

So can we help? Absolutely. We also have on our forum site, a section dedicated to one hour charts and another section dedicated to 30 minute charts and lower. So we have people who like to scalp and like to trade those shorter timeframe charts with a dedicated section as well. So is it a good thing to do? Well, that’s for you to decide on what suits you. Can we help? Absolutely. Because we can trade those. We do from time to time, trade those shorter timeframe charts, especially on our live webinars and people posting on our forum site and it works.

So as you can see from those two trades, a 1.95% account gain on two, very easy to take trades, taken live, just last night, on my live webinar, with clients, 2% gain. What more do you want really? It can be done. It’s very straightforward to be done once you know what you’re doing.

Send me an email to receive more details

So if you’d like more details, just send me an email, andrew@theforextradingcoach.com. If you’ve not been on to one of my free weekly webinars that we hold, one for new traders, one for experienced traders, make sure you jump on one of those. There’s only need to attend just one, just the one that’s relevant for your level of trading knowledge and experience right now. So hope that helps.

Feel free to share this video and podcast

Feel free to share this video and podcast with other people who think may be interested in learning how to scalp or trade the Forex market successfully. And I’ll see you this time next week.

Bye for now.

Episode Title: #401: So You Want to be a Scalper?

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New ASIC Regulations and How They Affect Forex Traders

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#400: New ASIC Regulations and How They Affect Forex Traders

In this video:
00:24 – I’m joined by Ben Clay from Blueberry Markets
00:43 – Why are ASIC making these changes?
01:43 – If you have more experience, will these levels change?
03:12 – How does this affect Australian traders?
04:00 – How will these changes affect non-Australian traders?
05:35 – I’m looking for a new broker. Can I join Blueberry?
06:11 – What should you look for in a good Forex broker?
07:36 – Can a trader contact you directly?
09:21 – A goal to help people succeed

Andrew Mitchem:
There are new changes coming from the Australian regulators affecting us as Forex traders. So let’s discuss how that’s going to change things with the Australian brokers. Let’s get into it right now.

Andrew Mitchem:
Hi traders, Andrew Mitchem here at the Forex Trading Coach with video and podcast number 400.

I’m joined by Ben Clay from Blueberry Markets

Andrew Mitchem:
And today we’re joined by Ben Clay from Blueberry Markets to discuss the upcoming changes through ASIC and how it’s going to affect us as traders, whether we be in Australia or overseas. So Ben, welcome, great to have you here today.

Ben Clay:
Thank you, Andrew. Thanks very much.

Why are ASIC making these changes?

Andrew Mitchem:
So Ben, we’re here about these changes out of ASIC, so it’s the Australian Securities and Investment Commission. So can you tell us how is this likely to affect us? And first of all, why are ASIC making these changes? What is it that they’re doing and why are they doing it?

Ben Clay:
Sure. So essentially the changes are mainly to protect traders at the end of the day, especially new traders coming on board. There’s a lot of new traders that come into brokers on one to 500 leverage, the maximum leverage that can be offered and that’s just too much risk for someone who doesn’t know anything about the Forex markets to be trading on. So these changes is to try and help new traders get a better understanding and trade on much lower leverage, which will be one to 30 for Forex pairs. So they can get an understanding of how the products works before jumping into higher leverage.

Andrew Mitchem:
Okay. So it’s mainly about leverage and protecting some of those newer traders.

Ben Clay:
Absolutely.

If you have more experience, will these levels change?

Andrew Mitchem:
That’s one of the reasons. So does that mean that once someone understands risk and they’ve been through trading for a while, things can change, or is that leverage that you just mentioned pretty much set?

Ben Clay:
No, that’s exactly right. So when a client has a bit of experience and has some trading history, they can actually become what’s called a sophisticated trader. So there’ll be some extra parameters that they have to go through, which we’ll send out to our clients in the next month, but it will basically almost be a test to show that they understand the markets and that they clearly understand the risks of when it comes to Forex trading. Like myself, I trade on high leverage. It’s just a way that I prefer to trade. So, me, myself, I would want to be listed as a sophisticated investor so I can have that as an option to trade on much higher leverage.

Andrew Mitchem:
Right. So it’s about educating the client as well. So they’re not just going in there gambling and throwing it all away, and then all goes wrong.

Ben Clay:
Exactly. That’s exactly right. And at Blueberry, that’s something that we’re really passionate about is making sure that our clients understand the risks, and people like yourself as well, who are out there educating clients so they’re not coming in and blowing up an account right off the bat on massive leverage.

Andrew Mitchem:
Yeah. So you’re teaching them about low risk and how to trade carefully and properly rather than the people that think they’re going to double their account every week.

Ben Clay:
Exactly right and that’s what it’s all about at the end of the day. So it’s a positive change that ASIC is making. And I think it’s been a long time coming and I think it’s going to be beneficial for the industry as a whole.

How does this affect Australian traders?

Andrew Mitchem:
Yeah. Nice. So let’s talk about Australian clients. You are in Australia and I’m guessing a good number of your clients are too. So how does this affect them directly?

Ben Clay:
So as of the 29th of March, if they’re not listed as a sophisticated investor for Forex pairs, they won’t be able to have leverage higher than one to 30. And I believe for minor pairs, it’s one to 20. For CFDs, it’s one to 10. So basically needing to have a higher margin and therefore less risk for each individual trade they place. They’re not able to have massive notional value contracts without laying a small amounts and therefore the profit loss fluctuations are so much higher, they would have to trade much smaller to start off and get comfortable with it right off the bat.

How will these changes affect non-Australian traders?

Andrew Mitchem:
Okay. And so that’s for Australian. So I’m in New Zealand. Most of our clients are other places around the world. So they want to trade through Blueberry Markets. How will these changes affect those people?

Ben Clay:
So for our existing clients that are here with Blueberry, they will be moved to an offshore licence on Vanuatu, which is the Vanuatu Financial Services Commission. So essentially there’s no changes for our overseas clients. They still have the same login number, same client portal details, funds are still held here in Australia they will have the same account manager. So it technically doesn’t impact those clients who are already experienced in trading. They can still have leverage up to one to 500.

Andrew Mitchem:
Okay. So for most Blueberry clients then going forward, existing clients, there’s not a lot of change for most people?

Ben Clay:
No. The only real difference would be if complaints that cannot be resolved internally at Blueberry Markets goes further, then they would go to the Vanuatu Financial Services Commission instead of going to ASIC. But the big thing to note here is that we have a very good online reputation and we focus on making sure that our clients are happy and 99.9% of our complaints are resolved in house. That’s something that we will continue to do, and we’ll continue to focus on building our reputation and making sure that our clients know that they can come to us and gets the best service possible and be taken care of and still have that trust with us as well. So this is even more important now, the way that our overseas clients are moving to an offshore licence. This is something that we take very, very seriously and we’ll continue to do so forever.

I’m looking for a new broker. Can I join Blueberry?

Andrew Mitchem:
Yeah, good. And so for someone who’s not currently a client of Blueberry Markets right now, and they’re looking at, thinking, “Well, I’m looking for broker,” and let’s say they’re outside of Australia. Can they come to you and join? Because I think there’s a bit of a perception that that’s not going to be possible.

Ben Clay:
Yeah, absolutely, right. So they can definitely still come to us to join. As I said, everything basically remains the same. They would just be onboarded onto a different licence, but everything will remain almost identical to them. So new clients can definitely still come and sign up. They just have to go through the normal application process, upload ID documents, and it’ll be approved within 24 hours.

What should you look for in a good Forex broker?

Andrew Mitchem:
Okay, excellent. So someone’s out there looking for a new broker. What should they be looking for? Not just with yourself, but with any broker going forward now or any ASIC broker, what is it that they should be looking for?

Ben Clay:
That’s a really good question. And I think this has changed a lot over the last 10 years or so. When I first started in the industry, every broker was just competing on spreads. Whoever had the tightest spread was the broker you would go with. And then it came down to regulation. But a lot of these tier two and tier three countries have now got really good regulation, like Vanuatu. So most brokers are regulated, obviously stay away from the ones that have zero regulation. But it all comes down to reputation. As we’re in this modern world of online reviews, you can go look and find anything you want to know about any broker you’re looking at, whether it’s us or someone else, just make sure that there’s plenty of good reviews and that you have a good read of them, that they’re not fake.

Ben Clay:
There’s going to be some negative reviews here and there. But the really important thing to do is do your research on the broker that you’re going through. And you can even get more granular with that and look at who’s behind the broker. Go look at the LinkedIn profiles of the directors and find out as much information as possible about the broker that you’re looking for before signing up. In my opinion, it’s reckless not to do your research and really ask as many questions as you can to your broker when signing up.

Can a trader contact you directly?

Andrew Mitchem:
Yeah, definitely. And what if somebody wanted to come to you directly and just ask some questions? Is that something they could do? Could they call you, can they email you?

Ben Clay:
Of course, absolutely. So we have live chat 24/7, so that’s on the weekends as well. People can come to our live chat. You can email me directly if need be. I’m the partners manager here at Blueberry Markets, but I’m always happy to help with whatever you can. My email is just ben.clay@blueberrymarkets.com, or you can reach out to support@blueberrymarkets.com and we’ll get back to you very quickly.

Andrew Mitchem:
Awesome, Ben. Well, look, I think from my point of view, being outside of Australia, especially I think it’s a big relief to hear what you’ve said, because initially it was a little bit of a, “Wow, we’re going to not be able to trade through Blueberry any longer.” So it’s good that we were able to have this conversation and continue offering good education from our side and good quality service and brokerage from your side. So I’m very pleased that that’s going to continue, but with even more licencing and quality behind the scenes from ASIC as well, which is good.

Ben Clay:
Yeah, absolutely. We’ll still be regulated by ASIC, of course. So I really appreciate that Andrew. This is, as I said, this is very important to us and it’s even more so important now to keep up our reputation and just to keep our clients happy and satisfied. That’s the most important thing at the end of the day for us.

Andrew Mitchem:
Excellent. Well, thank you very much, Ben. I think that’s been very valuable information. It has been good clarity as well, because we’ve had a huge amount of questions. I’m sure you have too.

Ben Clay:
I’ve had a lot of phone calls. Yes.

Andrew Mitchem:
I bet you have. Yes. So it’s really good just to help people and give people sort of options and from the horse’s mouth as it were, what’s really happening, which is good. So thank you very much for doing that.

A goal to help people succeed

Ben Clay:
Thanks very much, Andrew. No, that’s okay. I have to say, I thank people like yourself who are out there educating people on how to trade and really have a goal to help people instead of just looking for an extra dollar and it really shows and a lot of your clients speak those high volumes of you as well. So I appreciate what you’re doing too, Andrew.

Andrew Mitchem:
That’s good. I think we both on the same page and we both have that interest, that passion to help people who want to do well for themselves as well. So that’s really good.

Ben Clay:
Absolutely.

Andrew Mitchem:

Which is why we partner and why it works. So thank you, Ben.

Ben Clay:
No worries, mate.

Episode Title: #400: New ASIC Regulations and How They Affect Forex Traders

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5 Things to Know Before You Start Trading Forex

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#399: 5 Things to Know Before You Start Trading Forex

In this video:
00:26 – 5 very important things to know
00:38 – You will not become an overnight millionaire
02:01 – You don’t need to spend all day and night watching your charts
02:40 – You don’t need to study global events
03:52 – You do need to understand global time zones
05:47 – You must be willing to learn and invest in yourself
06:46 – Do you have questions and share this video 

I’m going to share with you five things that you should know before you start wanting to become a Forex trader. Let’s get into that and more right now.

Hi traders, Andrew Mitchem here at The Forex Trading Coach with video and podcast number 399.

5 very important things to know

I’m going to share with you five important things that I think you need to know and understand before you start to enter the amazing Forex world.

You will not become an overnight millionaire

So let’s start with the first thing is, you not be an overnight multimillionaire. Despite all the claims, all the promises, all the flash cars, all the laptops on the beaches that you see online and all the growth that you see, people tell you, you will achieve, you will not. And that’s the reality of it. 90 to 95 percent of Forex traders out there, of just retail small time Forex traders, lose money. It’s the facts. It’s the reality. And you have to figure out what are you you’re going to do differently to that sort of 90, 95% of other people?

There’s a lot of things you can do, and we can certainly help you with those. But you’ve got to actually realise that you will not be doubling your account every week or every month like people tell you, you will do. If you do that, you’re basically a gambler. And if you do that, you are not a trader and you will not last as a trader. So if you think you’re going to suddenly take a thousand dollars and turn it into a hundred thousand dollars or a million dollars in a week, month, a year, it’s not going to happen. You’re just going to lose money. Even if you’ve got a million dollars today to trade, if you don’t know what you’re doing, you’re going to lose money and you won’t have a million dollars pretty soon after. So, do not expect overnight success. Like all good things, it takes time. You will not double your account next week.

You don’t need to spend all day and night watching your charts

Number two, you don’t need to spend all day looking at your charts. A lot of people get into trading think that they need to sit up all night, all day, watching charts, watching every bit of movement. You do not need to do that, absolutely far from it. So don’t think that you need to sit there. You can go to work, do your normal things, kids, family, jobs, sports, whatever it is, travel, whatever it is you like to do, you can make trading work around that. So don’t think that you’re suddenly going to have to give up all your nights to sit watching charts moving or get up at three o’clock in the morning or anything like that. You don’t need to do that.

You don’t need to study global events

Number three. You don’t actually need to sit and look and study global events. I had an email from a guy this morning on LinkedIn said to me, “Hey, Andrew, look, I’d love to share with you what we write up each day.” And it was basically this about five or six pages on a PDF file of what happened yesterday, news events and political events and COVID events and all this type of stuff. Completely irrelevant. If you know what you’re doing as a technical trader, you can look at the charts. You don’t need to be studying all the political news events. You just don’t need to. Sure, it’s good to have an understanding and possibly look at a website once a day to see high impact news announcements, or just if you have an interest in that type of thing, to see what unemployment rates are doing or interest rates, that type of thing, that’s good. But if you want to be a technical trader, then all that other information really is completely irrelevant.

Look, if you want to be a fundamental trader, then by all means, that’s what you need to go and study. But if you’re like us and you want to do this enjoyably and profitably, be a technical trader and forget all that economist type of information, because it doesn’t really help you to make money from right now.

You don’t need to study global events

Fourth thing. This one makes me laugh every time. You do need to have an understanding of time zones. You do have to be aware that different people are in different time zones and what they are. Right now, it is summer in New Zealand. It is February. The amount of people that I’ve met that do not understand that because they live in the Northern hemisphere and they think that February it should be snowing and cold. Well, yes it is in the Northern hemisphere. It’s winter, but simple, simple things like that, people fail to understand. It absolutely, it blows my mind how people lack knowledge of the rest of the world. If you’re going to be a trader, the reality is you’re trading a global market. You do need to have some knowledge of this.

Give you a great example. Just this week, I held a live webinar on my Wednesday morning. The amount of emails that went out saying, “If you’re in the US, it’s Tuesday afternoon. If you are in the UK or Europe, it’s Tuesday night.” We put countdown timers on there. We explained it a hundred thousand times over. We put links to websites so you can see the time in your local time. You would not believe how many people wrote to me saying, “Oh, I missed the webinar,” or “I didn’t get the time right,” or “I thought it was today because in America it’s Wednesday.” Look, the reality is, if you’re going to do anything in the Forex market, you have to know these simple, simple things that different time zones. We work off New York time, 5:00 PM, New York time. How many people come to me and say, “What time is that if I’m in California?” or “What time is that if I’m in Singapore?” or “What time is that if I’m in Sydney?” Work it out. It’s not difficult. Sorry. It’s not difficult. If you want to start dealing in the financial markets, you got to know those simple, basic things, or at least know where to look online. No one has an excuse with not knowing that.

You must be willing to learn and invest in yourself

And lastly, you got to be willing to learn, got to be willing to invest in yourself. If you want to go through four years of tearing your hair out, like I did, going round in circles, buying all these different eBooks and following signals and spending a heap of time on these completely useless forums online, following, copying indicators, et cetera, very few people actually make it by doing that. You will waste so much time. You’ll blame everybody else. You’ll blame your broker, you’ll blame your market why you don’t make money. The reality is, like anything, you want to learn a skill? Invest some in yourself, some time, bit of money, get some good training. Do it properly first time.

So, hope that helps. That’s my five tips if you’re a new trader or someone thinking about getting into the Forex market very soon. Look, it’s an awesome market. It is absolutely the best market to trade without a doubt, but you’ve got to know what you’re doing like everything. So I hope that helps.

Do you have questions and share this video 

If you have any questions at all about the Forex market or you’d like any information or you’d like me to cover any information topics on future videos and podcasts, just let me know. If you felt like you’ve got a lot out of this, share my YouTube channel, share the podcast with your friends, family, anybody that’s interested in the Forex market. And I’ll see this time next week. Bye for now.

Episode Title: #399: 5 Things to Know Before You Start Trading Forex

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If you have been trading for less than 6 months, click here

If you have been trading for more than 6 months, click here

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The Forex Market or the Stock Market?

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#398: The Forex Market or the Stock Market?

In this video:
00:28 – Which is the best market to trade?
00:51 – The Forex market is open 24 hours a day
02:27 – It’s easy to follow and understand the 8 FX currencies
03:43 – Massive liquidity in the Forex market
04:44 – Use Leverage to your advantage
05:42 – You can trade Forex long and short
06:27 – The low cost of trading the Forex market
06:47 – The ability to take high reward:risk trades
08:13 – Send me the trading topics you’d like me to discuss

Should you trade the Forex market or should you consider trading the stock market instead? Which is best? Let’s talk about that and more, right now.

Hi Forex traders. It is Andrew Mitchem here, the owner of the Forex Trading Coach with video and podcast number 398.

Which is the best market to trade?

And I want to talk about the differences, the comparisons, the benefits of trading the Forex market over the stock market. It’s a question I get asked quite often. And so I thought to help you out, I’ll give you what I see the benefits of the Forex market that are clearly beneficial to us as traders and why I choose the Forex market over the stock market. So to list these in no particular order.

The Forex market is open 24 hours a day

The first one, the market is open 24 hours a day when you trade the Forex market. So it’s open five days a week. It opens at 05:00 PM, New York time on a Sunday, and it closes at 05:00 PM, New York time on a Friday. So it’s open for five complete days, 24 hours a day, and it doesn’t shut within that time.

Now that has many benefits. Depends on where you live around the world. You may find that some exchanges, if you’re trading the stock market, it may be crazy hours of the day for you. As an example, for me, living here in New Zealand, I can trade the Forex market quite easily, any time of day. Yet, if I wanted to trade the US stock market, I’d need to be up from about two o’clock in the morning through to about 06:00 or 07:00 AM every day. And there is no way I’m doing that. And it depends on where you’re living. If you’re in Europe, let’s say, you can’t trade the Australian stock market very easily because of the time differences. And when you have time differences and you have exchanges open for, let’s say eight hours a day, what you tend to find is between one day and the next day you have gaps in the price and you have price jumping from here and opening the next day up here. So all sorts of different things like that, which as a trader can become a problem.

Yet with the Forex market, it doesn’t matter where you live in the world, what time zone you’re on. When you look at the market, the market is open. And that to me is a massive, massive benefit. And you just get that continual flow with the Forex market that you don’t get in the stock market.

It’s easy to follow and understand the 8 FX currencies

Another benefit, when you look at the Forex market, there’s really only eight currencies that we look at trading. You get to know pretty soon the characteristics, how they move, how they flow with each different currency and the currency pairs. Yet if you’re trading the stock market, how on earth do you get to really know what’s happening with each of those stocks, those companies, what their debt levels are like, what their employment levels are like, what their plans are? All those type of things that I don’t believe that you really can know. And even if you study just a few of them, well, there’s thousands of them to go and look at. So how do you know which one to look at?

Whereas the Forex market’s such a small focused market. And when you get currencies like the New Zealand and the Australian and the Canadian that tend to all move together because they’re the commodity currencies and you get the Euro and the Franc moving opposite to each other, because they’re highly correlated, you really don’t have a lot of different markets to focus on, which makes our job a lot easier. So we can then focus on what’s happening on different timeframe charts and very, very easy in comparison to know what’s happening.

Massive liquidity in the Forex market

Liquidity is another massive benefit that I see in the Forex market, because it is the biggest market in the world. And completely, massively more in terms of what’s traded there in the Forex market than all the other markets, I think almost put together. As a trader, it doesn’t matter what I’m trading. I click my mouse, I’m in and out of a trade instantly. The liquidity is amazing. It means that the cost of trading is very, very small. My spreads are small compared with stocks, where spreads or commissions can be quite large. Finding a willing buyer and a willing seller, which is basically what we’re doing when you’re buying or selling, as a currency trader is absolutely simple. The market’s not shut. And I’m thinking, “Oh, I want to sell this stock, but I can’t because the market’s shut.” Or the volatility is not there. There becomes those issues with the stock market side of the things that you never ever see in the Forex market.

Use Leverage to your advantage

So leverage, another big part of why I personally think that trading the Forex market is so much better than the stock market, because with leverage, you can basically trade and control quite a large sum of money with just a relatively small amount. And that means that you’re not like with stocks, if you’re buying something and buying and holding, your money with no leverage is tied up and it’s tied up for a considerable length of time in most cases, because generally most people with the stock market are more buy and hold type of people. Whereas with the Forex market, you can control a large amount of money with a relatively small amount of money, which means you can take multiple trades. Some trades you may be in and out of the trades within minutes. Some may be days or hours. Some may be days depending on what type of Forex trader you are, but it allows you to take multiple positions with a relatively small amount in your account, which is another massive benefit.

You can trade Forex long and short

With the long and short ability of trading, that’s another huge benefit as well. Because we’re trading currencies as currency pairs together, we can just as easily press sell and look for a currency pair to fall and make exactly the same money as if you’re taking it long and buying. Whereas most people traditionally with stock markets, you are literally buying and anticipating it moving up. Now sure, that may be changing with CFDs and the way that you can now start to short stocks, but traditionally the Forex market has completely always been buy and sell, and that is a benefit over the normal way that most people trade stocks.

The low cost of trading the Forex market

We’ve talked about the entry fees, the low cost. Let’s say, for example, the Euro US dollar, the spread is so small because of the amount that’s traded all the time. And it’s not just during the European session, it’s all around the clock, five days a week that the spread, the cost of that entry fee is so small.

The ability to take high reward:risk trades

And to me, one of the last benefits that I see of the Forex market is the ability to trade and have profitable trades with high reward to risk. So it means that my reward out of a trade, maybe two, three, four times my risk. Now I can do that relatively quickly in the Forex market. And that could be depending on the timeframe trade you’re trading, it could be again within minutes or hours, sometimes days, but I could close out of a trade with very low controlled risk, high reward to risk. Whereas if I’m trading the stock market and I’m buying a stock let’s say, I would have to wait, in most cases, a long, long time to make two or three times your risk on that trade. And being able to do that, by buying and selling with the liquidity, with the low cost of entry and exit, with the 24 hours a day market, to me, you put all that together, and undoubtedly the Forex market is a better market to trade than the stock market.

So I hope that helps. Hope that answers your question. Don’t forget, that’s just my opinion. I’m not saying it’s the right answer. There is really no right answer. It depends on what you, as a person, as a trader, like, but for me, I’ve always traded the Forex markets because of those benefits, and I think they are huge.

Send me the trading topics you’d like me to discuss

So if you have any questions, just like that one that was sent to me last week, that you’d like me to cover on future videos and podcasts, just send me an email, andrew@theforextradingcoach.com, and I’ll help you out, by answering your question for you.

I’ll see you this time next week. Bye for now.

Episode Title: #398: The Forex Market or the Stock Market?

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How Using Retracements Will Help Your Trading Results

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#396: How Using Retracements Will Help Your Trading Results

In this video:
00:26 – The biggest difference to my trading success
01:06 – The many benefits of using limit orders
01:46 – Frees up your time
03:57 – A real time example on the EUR/NZD H4 chart
05:03 – Using retracement entries will massively help you

Using retracement orders can massively improve your trading success. Let’s talk about that more right now.

Hi Forex traders, it’s Andrew Mitchem here at the Forex Trading Coach with video and podcast number 396.

The biggest difference to my trading success

Now, next week I’m going to be speaking at a virtual trading week for a group of traders over in Singapore. I’ve been asked to speak as a special guest. And the guy who’s organising the events said to me, “Andrew, I want you to talk about on a topic that can help people, but choose a topic that made a huge difference to your own trading success. Like what helped you as a trader to change your trading around and what made it so successful.” So I’ve got quite an interesting topic and it is all about how you actually enter the market using retracement orders.

The many benefits of using limit orders

Now you see, there are so many benefits to using retracement orders.And when I’m saying retracements, I’m using what’s called limit orders, so buy limits or sell limits. So if you were to take a buy trade, for instance, a buy limit order means that you’re entering the market below the current price. If you’re taking a sell order, you are entering the market above the current price. So in other words, you’re getting in at a better price after the price has retraced from where it currently is, and then you’re anticipating it to then continue in the direction of your trade.

Frees up your time

Now, huge number of benefits to this. One, time-wise. Now a number of people stress about sitting and watching their charts all the time. You know, you’re missing out on trades, or you don’t know when to be at your charts. Now we simplify that here at the Forex Trading Coach by only looking at a candle at the close of the candle, that’s the only time we look at a trade.

So once you do that, then we get people that say, well, I cannot be there at at 12 o’clock or four o’clock, whenever the candle closes. But the beauty of taking retracement orders is you don’t actually need to be there. So, as an example on a buy trade, we’re still looking at using our same profit target, our same stop loss, but rather than entering at the market and needing to be there at that time and having a smaller reward to risk, we’re looking for the price to first fall, get our buy limit order filled, and then head up in our overall anticipated direction. Massive benefits time-wise. The other massive benefit also you can see, we’ve now increased our reward to risk of the trade. And that’s massively important psychologically. Now you don’t need to be winning 80, 90% of the time.

And you think about this in simple terms. If you have trades that are three to one reward to risk on average, and you take three trades, one of them’s profitable, you just made one and a half percent on your account by using half percent risk. You have two losing trades following that, you’ve lost 1% total. So out of the three trades, you’ve only making 33.3% of the time. You’re only profitable on a third of your trades, yet you’ve still made half of 1% gain by using half percent risk on each of those three trades. So people that say, “Look, I need to be profitable 80, 90% of the time.” Most of those people don’t make money. And you think about this, if you’re making one out of three profitable trades, what happens if you can expand that out to 10 trades.

And rather than three out of 10, let’s say you’re up to four or five out of 10. You see how with high reward to risk trades, you can make massive, massive gains.

A real time example on the EUR/NZD H4 chart

Now I want to give you a real example that’s actually going on right behind me right now as I’m recording this. So there’s a trade that Paul Tillman took in front of our clients on our live US webinar on Thursday, the 21st of January. And it’s now Friday the 22nd when I’m recording this here in New Zealand. The trades still open. Go and look at your charts, go and look at the Euro New Zealand dollar on the four hour charts. And we took a trade, or Paul took a trade, at the close of the 12 o’clock candle. Go and have a look at that great candle setup. Now, Paul’s got the trade on there, it’s almost a profit.

Right now it’s eight pips away from the full profit target. It’s got a 3.1 reward to risk. So that means with half percent risk, which Paul’s taken in front of our clients, hundreds of clients on the live webinar, if that trade gets the profit, which it’s almost there, it’s going to make us a 1.55% account gain. So you can see again, the importance of high reward to risk that you get from the benefit of using retracement orders.

Using retracement entries will massively help you

So it’s a very important part of my trading and my trading success and our client’s trading success. So I hope it helps you too. If you have any topics or questions that you’d like me to talk about on future videos and podcasts just like this one, just drop me a line to Andrew@theforextradingcoach.com. I’ll see you next time. Bye for now.

Episode Title: #396: How Using Retracements Will Help Your Trading Results

TFTC Pattern Trader. Click Here!

Learn More About My Course. Click Here!

If you have been trading for less than 6 months, click here

If you have been trading for more than 6 months, click here

Click Here to Download my FREE Lot Size Calculator

Click Here to Check my Recommended Brokers.

The 30 Minute Trader Trip

Watch how Andrew made a +12.79% gain on a live account during 4 weeks while trading for just 10-30 minutes a day while on holiday in the UK and France.

CLICK HERE TO ACCESS THE VIDEOS >>

Podcast: Play in new window | Download

Subscribe: Apple Podcasts | Spotify | Android | iHeartRadio | TuneIn | RSS