How to manage a forex trade so that the risk and the risk-reward of the trade is set in advance, using the examples of AUD.JPY and AUD.USD.
Forum: Trading EducationStories: 15
How do we manage a Forex trade so that the risk is fixed and we know the risk-reward of the trade in advance?
What do the Forex ticker symbols mean in foreign currency trading and how to understand Base Currency, Quote Currency and Account Currency.
How do you set a proper 24 hour timezone when trading forex and futures markets?
This sixth and final story in the series "Introduction to Trading Systems" tests systems to show how to develop an optimal risk/reward multiplier. This RR is used to calculate the target price in each setup.
This fifth story in the series "Introduction to Trading Systems" brings together the setup, the trend, and signals, combining them into a simple trading system. The system we design here is only for teaching purposes and as we build it we explain how to substitute your own signals and trading style.
This fourth story in the series "Introduction to Trading Systems" explores examples of simple signals: the MA cross, Pin Bars, Engulfing patterns and Heikin Ashi reversals.
This third story in the series "Introduction to Trading Systems" explains a signal, the trigger alerting us to open a position in an instrument.
This second story in the series "Introduction to Trading Systems" investigates how timeframes and fundamentals affect the trend. We also look at how to distinguish retracements from trend reversals.
This first story in the series "Introduction to Trading Systems" explains what a system is and what you need to know about trends and signals so you will be able to build your own custom trading system.
What is the role of margin and how do we manage the trade setup so we can then sit back and let the trade work for us?
How do we calculate the risk per contract and how does that lead to position sizing?
How do we calculate the risk on each forex or futures trade? You will learn about risk management and how position size helps contain your risk.
What are the key variables you need to know for each futures or forex trade? You will learn about the Open, Stop Loss and Target Price of the trade, along with how many contracts to open.
How do you set up a trade in either the forex or futures markets? You will learn how to measure the risk and potential reward of a trade before you open it and you will minimize the risk to just a small percentage of your portfolio.