Home Trading Strategies The Truth about Forex Trading (Most Traders Never Find Out)

The Truth about Forex Trading (Most Traders Never Find Out)

The Truth about Forex Trading (Most Traders Never Find Out)

hey hey what’s up what’s up my friend so in this video I want to share with you the truth about forex trading warning right this video isn’t a video that will make you feel good right you know talk about how you can go to achieve your dreams or I travel around the world drive a Lamborghini right attract the hot chicks and blah blah blah no none of that in fact the truth hurts right as they say so in this video I’m going to share with you right what it takes to succeed in this business business and to manage your expectations so if you are someone who you know wants to feel good this video clearly isn’t for you but if you are someone who wants to know what it takes to succeed in this business right you know and how you can actually you know shortcut your learning curve alright then this video is for you okay so the first thing first number one the first question I always get is how long does it take to become a profitable trader and from what I’ve seen when I’ve seen traders who became profitable in less than a year I’ve seen traders who took we know four years five years and I’ve also seen no traders who spend ten over years and are still not profitable okay so from what I’ve seen as a general guideline proprietary traders they typically became become profitable within a short period of time because number one they are trading of the lower timeframe and they have more traits to take and with more traits to take right and you have a proven framework to follow that you know constantly review your trace tweak and improve right you can achieve right much more results within a short period of time so this is why proper traders do typically right get profitable within within the one year map but that is not to say they know prop trading is the best way to go about because the attrition rate is also very high so I’m just talking about those traders who does make it but those traders who don’t make it or again the percentage is very high and from where I came from about nine out of ten they don’t make the cut okay so now what about traders like you who are watching this video you probably you know have a full time job right trading something that you don’t on the sites maybe to generate an extra income maybe to help you know grow your portfolio over time how long does it take to become a profitable trader and based on what I’ve seen right a rough guideline is about four to five years and the reason why I say that is because most traders right will go through a similar route for example in the first year of trading you get excited alright man I’m gonna make it bigger I wouldn’t wreck the nice fast cars quit my full-time job you know and you learn all you can about trading and in the first years you learn you know technical analysis fundamental analysis sentiment analysis and and after which you find it man this is so much knowledge right I’m always acquiring so much knowledge but my trading results it’s not improving why is that and that’s where you have your first aha moment is that you don’t need to know everything in the markets to make money okay so this is where you know you’re doing here three start to discuss all this knowledge I start to you know kick out there 90% of the fluff that that doesn’t work and just focus on a 10% okay so now once you have left with that 10% is where you you know apply proper risk management you better expect you have a better expectation so if you know you’re trading so in year four onwards right is where you start you know get serious about trading to trade with stuff that has worked for you and from then on right you have a good chance right or you have a chance of becoming profitable from then on right so you can see that this is a path that I think most of us will go through I went through that puffin if you ask me right most retail traders if you are the type of traders who are you know starting from blog post forum reading books on every house it took about four years four years plus okay so that’s the truth second thing how much money can I make from forex trading all right can I quit my full-time job and travel around the world and just click on the laptop and you know make a billion bucks well here’s the truth so to determine right how much money you can make from trading there is a three things that you need to bear in mind number one is your average win rate number two is your average risk reward and number three very important is your frequency of traits this is something that a lot of traders didn’t click so let’s say for example there are two traders John and Sally right let’s say they both have a similar expectancy they both have a book about 50% win rate with an average of 1 to 2 raised to war which trader is gonna make more money well you have to ask yourself which trader has the most frequency of trades let’s say sally has you know 50 treats a day she’s a scalpel scalpel whereas John is a longer term position treaty trader he has 50 treats a year clearly right sally is most likely to be me he’s most likely right to make more money then job because she has a higher frequency of Tracy and even in there with their win rate and risk to reward right on average are the same so she’s gonna make more money because she has more trading opportunities right so how much money can I make from trading again you have to take into consideration these three factors okay and also you have to take into account right your risk per trade your percentage risk per trade needless to say if someone who risk two or three percent of their account on one trade has a good chance of making more money compared to someone who risks 0.

5% okay but at the same time they are also gonna have a deeper draw down so you can see that a lot of things all it depends I hate you know give you the answer it depends but it’s the trophy really depends on a lot of factors but if you really want a hot ball figure to how much you can make from creating trading generally day trader or short-term trader you can make anywhere from 50 to 100 are per year whereas a longer-term trader swing position trader you’re looking at anywhere between 20 to 40 are per year okay so that’s my answer tutting right are trading indicators useless here right now I thought that you know indicators are lagging that means they’re useless is that true I would say that you know traders who say that indicators are useless alright typically don’t understand how indicators work that’s why I say it’s useless I would say indicators they are not useless yes they are lagging indicators are lagging I agree but in fact everything that you see on your chart your candlestick pattern your chart patterns they are all lagging as well because it all has occurred after the fact after the price close then your candlestick is fall they’re lagging right so just because something is lagging doesn’t mean it doesn’t work okay why do I say that it’s because for example if you look at a chart right see the range of the bars up and now up and now can you tell what is the mall volatility of the market at one glance chances are you can because you still have to start to pay attention to the range of the bars is it constricting is it expanding is it you know getting smaller again but if you pull out an indicator like the average true range you can look at it at a glance whether indicate whether the volatility is expanding or contracting so this is something that an indicator can do that price action would have a little bit more difficulty you know trying to visualize it so indicators they are useful because it helps you visualize price action it helps you summarize the price action okay so for example another one is moving average you can tell whether the longer-term trend is up or down just pull out a moving average like a 200 period moving average you can tell at a glance right where the longer-term trends up or down if you wanna see what’s the short-term trend we can just pull up at windy period moving average a shot at the moving average whereas you just look at a chance right you’ll ask yourself what is the long-term trend a medium-term trim and the short-term trend I can tell you you will get confused because you start to ask yourself you know what is the trend do i zoom in zoom out and stuff like that do I look at the last 20 candles the last 50 candles you can see there’s a lot of so-called subjectivity to it and you will have difficulty even answering a simple question like what is the trend so this is where a moving average a very simple indicator it lacks the market could give you a better answer okay could give you a quicker answer right compared to someone who just stare blankly in the chart and no have difficulty identifying the trend right so indicators they are not useless right they are only useless to those who do not know how to use it okay the fourth question which is the best trading strategy to trick X market so often I get question hey Rana which is the best strategy to trade crude oil which is the best strategy to trader MC exit be honest I don’t really know what’s there alright so here’s the thing I’m always very careful right on I would be very aware whenever a strategy only works on one market why is that – reason first the chances are the strategy is confident to whatever historical data that you put on it and number two if a strategy only works on one market that particular age that you have let’s say chance by accident can be easily eroded right by a trader who has deeper pockets than you or a algorithm who can just take advantage of this inefficiency so this is why I’m always very careful right and I don’t like right to trick a particular strategy that only works on one market let me share with you an example already a story right back when I was an appropriator right one of the things that the traders at the floor like to do is that they like to create that the Nikkei futures contract because Nikkei is traded on a multiple exchanges traded on the Osaka exchange the Singapore Exchange and even on the CMA exchange so when one of the so-called beauty of it is that if if is traded on multiple exchange there is a be tragic opportunity let’s say for example nuclear and I was trading at higher dollars on SGX and on the Osaka exchanges trading and let’s see 105 dollars what I can do is I can shot me was soccer exchange shot the contrary was soccer and long the contractor @s ejects and profit the difference of five dollars so that is the general idea behind it and in fact in the early days of so-called trading the Nikkei contracts there are a lot of a be tragic opportunities like this because the markets are not as efficient back back so this is so-called like you know one specific strategy the only works for Nikkei because it’s traded on multiple exchange and what happens well fast forward few years later when the algorithm comes into the market the machines are faster than humans this age is gone and a lot of traders that have made millions of dollars during that era they can’t read anymore because their age is no longer there so this is why I say that you know you really want to be aware if there’s only one particular strategy that only works in one market because chances are okay that strategy right the edge right can be eroded easily okay so this is why I choose right to creative strategies right that number one either a debt to different market conditions or works right across a broad basket of markets like trend-following it’s applied across a portfolio of markets or price action trading is where you read the price action of the markets you identify the market condition and then use the appropriate strategy to trick the market condition so these are the type of strategies I would rather trade rather than finding a best strategy for X market number two oh sorry some – this is number five right when it’s the best time to enter a trade so again this uh you probably hate to hear this but it depends why do I say that because if the market is in range well then the best time to enter a trade is buying low at support or shorting high resistance if the market is in an uptrend and it makes sense do you know let’s say the market is in an uptrend a healthy trend respecting the 50 MA then it makes sense to buy the pullback maybe the pullback to us a 50 period moving average if the market is in a strong trend okay then it makes sense to be buying the breakout so it really depends alright on the market condition and then you you use the appropriate entry technique to trade the particular market condition and that’s a unfortunately right market is always changing and that’s why it really isn’t a best time to enter a tree Nick’s right which is the best timeframe okay so I get it’s a lot as well hey Raina which timeframe should I be trading which timeframes the was profitable so again there isn’t a best time frame because why do I say that because you have proprietary treaters or short-term traders you’re trading off the five minutes time frame the 15 minutes time frame and scalpels they don’t even look at time frame they just simply trade off the order flow tab it’s an offer at the same time you have swing traders who operate off the one hour and for overtime frame and then you have you know longer-term position traders you know trade off the daily time frame or even know like mutual fund hedge funds entering off the daily and weekly timeframe so you can see that across the board across the different time frames there are different group of traders operating on it and this goes to tell you that there isn’t a best time frame up there the best time frame for you is a time frame and you can commit to if you have a full time job this means that you want to be trading off let’s say the daily time frame where you know you come home from your work right you can check the charts right and make decisions of the higher time frame it doesn’t make sense if you know you have a full time job in your trading of the five minutes time frame because you don’t have the time to commit to that five minutes time frames are the best time frame for you it’s that time frame that you can commit to okay moving on well high-frequency traders you wrote my age so early you you’ve seen that you know high-frequency traders they have actually eroded the traders who traded Nicky futures alright so I was a high-frequency traders you should be aware of them if you are trading off the lower timeframe if you’re a scalpel or a day trader right when speed is of the essence to you they could possibly erode your edge right high frequency traders could possibly erode your age but if you are trading off the daily timeframe the forward timeframe I wouldn’t really worry about it because you guys are operating on different timeframes okay so it’s like saying write a new multi-billion dollar hedge fund is coming to the block right they are trading off the daily timeframe if you’re a short-term trader or short-term trader like the five minutes timeframe treated wood edge fun fnu know right because you’re trading off a different time frame it’s the same as high-frequency traders you’re all operating on different timeframes so you don’t have to worry about it unless you yourself right are a short-term trader you yourself you’re a high-frequency traders then hey you know this is something that you might have to consider about but generally most of you watching this video you know even you know a scalper or day trader so the general answer is you know high-frequency traders they want a route your age okay next one should I quit my full-time job and treat full-time should I quit my job in treat full-time right so the answer to this right is a probably no right it’s because right you don’t you know leave a comfortable job and treat full-time and less right you have proven to yourself that you can’t consistently profit from the markets because the fact that if you’re asking this question right it’s probably probably means right that you’re not even profitable yet and if you’re not profitable yet why do you want to leave your job and treat food and they only stack the odds against you because now you have losses that are then a fixed income stream and on top of it right it makes it harder on you psychologically because you have the need to make money so why do you wanna do that so generally my suggestion is you know if you wanna you know quit your job and treat full time you need to take some more enough capital I suggest at least a minimum of $100,000 to start with right again right also depends on my expense you have the larger expense is right the more training capital that you need to generate return to meet your lifestyle second thing is you need to be able to prove to yourself that you can’t consistently profit from the market you have been losing consistently right it’s not gonna make a difference whether you’re trading full-time or part-time because you’re still going to lose right you need to nail down the process right that framework to prove to yourself you can do it and then hey maybe you have a chance right when you if you know what to do it full-time you know way the comfort of your home we don’t know what to answer to any other yella right my first right you have to meet these two things the more your capital requirement and number two that you can write be a consistently profitable trader okay next one right when is the best time to exit a trade so the thing about trade exists is again it really depends on you what are you trying to accomplish let’s say for example if you’re a swing trader you just want to capture one swing in the market let’s say you know the market is a trend you buy the pullback and it moves up higher right retesting this highs and you just want to capture this one swing right then it makes sense right the best time to exit the trade it’s just you know before this swing high over here but if you’re a trader there let’s say you wanna you know write long term trends right trend following right markets in your trend then the best time to exit a trade is when the market shows sign of reversal already hits you’re drilling stop-loss so is the market show signs of reversal all right breaking below this low for example then he write this this might be a time for you to exit your trade using whatever trailing stop loss mechanism or technique that you’re using so that is the best time to exit your trick if you want to you know write the trick so the first question that you have ourself is you know what are you trying to accomplish to write a trend or to just capture the swing once you’ve answered that question then you can use the appropriate technique right to meet your goals and finally which is the best indicators settings right now should I use the exponential moving average should I use a simple moving average should I use a weighted moving average Monza’s monster is doesn’t matter why do I say that because there is the best indicator settings likewise there isn’t a best indicator out there say for example you’re looking at a chart and you realize that the 20-period moving average is you know respected by the market always you know bounce off come back bounce off to the pit right so the 20-period moving average seems to be the best indicator settings for this timeframe for this market but guess what markets always change right it doesn’t mean that it’s gonna respect the 20-period moving average forever it’s gonna break down eventually and the moving average will also call be rendered irrelevant so this is why there is no such thing as the best indicator settings out there because the market always changed so don’t ask yourself it all for this let’s say the nifty 50 which is the best moving average to use for the crude oil which is the best moving average to use because there is no such thing as the best settings or best indicators to use what’s important is to ask yourself what is the purpose of your indicator down there and then use that indicator to meet yourself to meet your goals for example I use the average True Range indicator what is the purpose of it is to help me measure the volatility of the markets okay so to measure volatility of the markets what is the time period to you so since I’m trading off the daily timeframe I know one man has about 20 candles I use a 20 period ATR do I use the simple moving average or the exponential moving average doesn’t matter it doesn’t it’s not like a difference right in the concept that I want is just measure the volatility of the market and it’s some buffer to my stop-loss that’s what I’m trying to do where is eme SME WME doesn’t difference to me right the figures could change by 0.

5 one point or two point who cares the concept I’m trying to have is the place to determine what is the buffer that I wanna use to add on to my stop-loss that is the core concept that I’m concerned with not the best parameter not the you know the the range of Kendall’s that I look back across right know the concept is what matters and this is what I keep telling traders always focus on the concept not on the best indicator settings parameters or whatsoever okay so there is no best indicators out there to answer your question and there’s no best settings as well okay so yep that’s pretty much it right for this video right I’ve shared with you a ten truth about forex trading I hope this gives you insight I hope this gives you something that you can chew on to think about and hopefully you know help you move your trading towards the next stage I don’t wanna see you know to see you trip around in circles running around and around you know trying the different indicators different settings you know and and don’t have any results to show for because like I’ve said right those are really stuff that you shouldn’t really focus on I think the process is so much more important than you know finding the best parameters indicator settings or whatsoever okay so that’s it I’ve come towards the end of this video if you’ve any questions feedback let me know in the comment section below and if you enjoyed this video hit that subscribe button he that thumbs up button right I will really appreciate it and with it say I wish you good luck and good trading I’ll talk to you soon


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