I am a trader since 2008, but invested into fonds and stocks already in 2006.
After making my first attempts in the forex and stock market, I realized the outrageous volatility of the financial markets.
So one thing is for sure: You must have a reliable trading edge, that you hardly will find in the lower timeframe. Simply because the volatility is too high and unpredictable.
Maybe you discovered some sort of scalping edge in 1/5/15 min charts, then I wish you all the best.
But if you want to go the scientific way, I only suggest to trade in the 1h, 4h, daily and weekly chart.
Especially high r:r:r trades you won't find that often in the forex market
[1:4 risk reward ratio is best to come across with stock trading (on news)].
A good dashboard / currency strength-meter is needed, if you want to trade forex on MT4/5.
Another thing is also for sure:
There are only two ways to trade - either the classical approach, chart-ananlysis, news gathering and maybe some volume insight, or the way of gambling your way through the uncertainties of the market: Grid, martingale, hedge on a small account.
There are people out there, that think they can make use of the classical style of trading with the integration of martingale or hedge and still make use of the safety of the classical approach - this is nonsense.
As soon as you integrate any martingale style, the classical appraoch with fixed StopLosses (Trailing Stops) is not more being asked.
This is something everyone needs to understand.
On the classical way of trading you make losses up to a certain point, and cut them off when they hit SL or a daily drawdown value.
With the approach of martingale, hedge or grid you just end this way of thinking - your calculation from this point forward is based on the volatility of the market, and in bad situations this can be infinite.
This is why it only makes sense to use these dangerous approaches on small accounts, if you want to make use of it at all.
There is a third way, if you want to: Take a recovery tool, once you are in a loss; but that also uses martingale etc. Taking this into account means that you are trading with money, that you can (easily) abandon, without having trouble.
Best way to look at the market is through the eyes of a big player. So, what does a big player do?!
1. He has a big account
2. He does not have to care about other income sources
3. No matter where he enters the market, and even when he is wrong with his placed trade direction: he has all the tools & capital he needs - outrageous and strict money management - to mostly exit any trade with profit / break-even.
Why is this so? While retail traders like us go into the game without having made their homework - counted their money, calculated their risk, and how many trades they need to exit a bad trade - the big players have done all this. They have ready made systems that do the counting for them automatically.
That means that instead of opening big positions at once, open many small positions [pyramide way of trade] using a semi-automated system.
Be strictly focused on your rules and money management, and no matter how much money you have for your trading: Fill your trading account only with 10% to maximum 20% with it. If you do not have much money, you can of course put all your money into one account, but you -still- have to look at it as a gambling game.
Once doubled your small account, you must withdraw the earnings and trade on with your initial payment. One day a big spike might occur on the market you trade, but then you will be safe with you securities you have already withdrawn, and the loss of your small account (5-10%) will not hurt you at all.
4. He never goes too deep into a losing trade. To avoid this, he either uses hedging (best way) or he just cuts the loss. Cutting the loss with stop losses is actually a safe way to lose all your invested capital some day. Setting a stop loss makes only sense if it is at break-even (minimum), and Trailing Stops when you are already on your way to profit, but don't want to monitor the trade all day long. Using stop losses before break-even means, that you must look at it in a way I described it with the small account (5-10%) in point 3. You must see it as gambling money, that you can afford to lose; most likely several times.
Btw, there are even more special trading systems, like grid hedging aso....
5. He has fundamental information. While we trader tend to trade solely on chart patterns and technical analysis, he also has other information.
Volume is not the holy grail, but for sure it can give you a big advantage of: Whether to place a trade or not, or: At which price to place a trade. [volfix .net for ex.]
6. News. Getting news in a fast pace costs money. Whether bloomberg, reuters eikon or another Squawk Box: To be able to trade forex, indices, equities or stocks on news release, you must pay for a service. Those users get many news 30 sec. before off. news release.
So in the end that means, you need to pay some money, to be ready to trade efficiently.
Going to the markets without some good cash will actually not make much sense.
As I said, you must split your capital into 10 or 20 and be ready to - due to training and exercising - lose half of it before making any money.
In the end, how can we practically imagine how the big players and banks trade?!
Big banks tell each of their traders to survey only one or two securities a day. Not more.
Those traders goal is to achieve 5% growth a month, not more.
So all they do is to check the charts, news and volume all day long.
Sometimes they are even limited to only trade into one direction:
One trades the securities only with buy orders, another one only with sell orders.
Stock traders do the same, although they are not limited to only two stocks. That would be waste of money.
You need to have a very good stock screening software for it [agena for ex. or other software, that can scan many thousands of US, EU & asian stocks], and keep an eye on the news.
But in the end it is worthy, because trading carefully picked stocks can give you a win-ratio of 1:4, which you cannot often find in the forex world.
So, if there is a holy grail, it is the selection of *what* you want to trade.
Trading solely forex / currencies will for sure lead to so called over-trading with the time. Traders think their must be a trading opportunity in the markets at any time, and they start to take high risk trades without any real chart signal / technical formation / news. This way they lose money.
On the over hand, in the stock market, there is actually almost each day a possibility to trade. You just need a good stock scanner and news report.
I personally think, that this is the way the rich people trade (those of them that really trade on their own or even made their fortune with it).
The other way is: Buying a reliable EA.
But this sounds easier than it is.
Always check the live signal for a robot, and if it is really that robot that trades (100% automatically).
Such a signal must have favorable 6 months of track, and the coder must offer you on-going service. Whether to shut down the EA for news releases or not, for example.
Darwinex, Myfxbook, FxBlue, PsyQuotation or CopyFx are some other platforms, that offer quite good signal subscription.
Reliable Forex Brokers such as IC markets, Dukascopy, Alpari, FxPro, Pepperstone, Robo Forex and so on also offer PAMM services.
There are also many programs for semi-automatic trading out there; I think Mike is doing a good job so far:
Last word: Structure (price levels, S&R, trend-lines, fibos, candlestick patterns and psychological levels) are much more important in trading than any wave indicators [MA, Oscillators, aso.].
In the end, the clearly visible signals are more important than complicated ones.
Best way to trade as per my definition:
1) News Events - you won't believe how much impact News have onto the movement of a price. Big Players buy or sell outrageous packages at news, before or after.
This is something you only see once you have subcribed to a volume data feed, that costs you money. Actually, big investors only wait for news, let it be official or just rumors.
Don't forget either, that there is a huge dark pool of interbank-trading, that we have no clue about. Still, real volume of futures can show as a big part of whether the price is going (trending) or not.
However, doesn't matter what volume data you have, filtering ranges or extreme up><down movements will still be a tricky thing.
Volume data platforms are: ATAS, voflix, NinjaTrader 8 and some others [best is to take a look at a future broker, and which platforms he offers, for examaple AMP futures].
2) Big Players start a screening - If news are being released, they do not have an impact on all stocks/markets. If you have a reliable stock screening software and/ or dashboard for indices, forex movements, than you can check what news effect what market
Stock screening platforms are for ex. TeleChart2000 or Agena Trader or TradingView.
3) Volume Analysis - this shows you the potential odds you need, for the possibility of a higher success entry & exit [a lot of stuff, coaches teach a different way, unforunately; but I think volumeteam.com / heldental.com (german) is quite good. Please look for engl. speaking websites here].
List of important websites:
forexpeacearmy.com - Best reviews for brokers and strategies
forexfactory.com - Biggest forex trading forum