Forex Tradingwithrayner

[tradingwithrayner]

Hello everyone!

My name is Rayner and I have been trading the forex market since 2010.

This thread is to illustrate my trade ideas and provide free knowledge to those who are passionate about trading.

There is no hype, no bull****, no gimmicks and nothing to SELL here.

Just common sense trading to share with the masses.

 

[tradingwithrayner]

I'm hoping to post some videos and charts, but apparently i do not have enough posts to do that.

Nonetheless, here are 3 cold hard facts that all new traders must know!

1) Leverage - You see brokers offering leverage like nobody's business. The highest i saw was 1 to 400! Seriously, if anyone goes with the broker that offers the highest leverage, you're better of parking your money in the bank.
Assuming you have $1000 and you buy $400000 worth of EURUSD currency. And assuming EURUSD average a 1% movement a day. Thus 1% of $400000 = $4000
If that 1% were to go against you, your account is wiped out and you're down NEGATIVE $3000. So much so for leverage huh!
So tell me, does excessive leverage seem all that exciting now?

2) Emotions - Humans were never born to trade. Our emotions are counter productive to trading. We like to hold on to our losses, HOPING it will come back to breakeven. We cut our profits short FEARING it would run away from us. Hope and fear are the 2 killer emotions that destory most accounts.

3) Biggest casino in the world - Yes that's right! The forex market is the biggest casino in the world. And you can open up an account for as little as $100. Wait, in fact it's even more convinient then going to a casino. At a click of a mouse, you can buy or sell! Wow, what better way to lose your money at the comfort of your home!
You're challenging against the smartest, most hardworking people who have access to deeper pockets then both you and i can imagine

So after all these 3 facts, to those who wants to take up forex as a hobby or to earn some part time income, my advice is to stay far far away!

For those who are still around, i would try to post some charts and videos along the way to illustrate my way of trading the markets.

If anyone has any questions, feel free to ask.

 

[Dividends Warrior]

Support!!!

 

[tradingwithrayner]

2 things you MUST do as a trader

Tired of blowing countless number of accounts? Here are 2 things that you must do! If you can follow them , i can assure you that chances are you will NEVER blow an account again.

1) Always have a stoploss
Yes! STOPLOSS! Most traders enter a trade without knowing where to exit. If that's the case, your account will determine when you exit. Thus you exit when you get margin called AKA blown account.
Thus before entering each and every trade, always always have a pre determine exit point in advance. Set your stoploss and exit price and let your trade do its thing. Either you get stopped out or you hit your profit target. Easy, no?

2) Risk no more than 2% of your account (Personally i risk only 1%)
Ok so you have your stoploss in place. But what's the point of having it if you risk 50% of your account? You only need to be wrong twice before blowing out at account. And trust me, in the forex markets you will be wrong many many times.
By risking 2% of your account, you'd need to be wrong 50 times in a row to blow an account. What are the odds of losing 50 times in a row? You will have to really 'talented' to do that.

So if you can follow these 2 hardcore rules, i can assure you that you will almost never blow an account again! Well, unless you're really talented.

If there's any questions, feel free to ask.

 

[tradingwithrayner]

What is the spread?

In forex trading, usually there's no commission but only the spread.

Some of you may wonder, what the heck is the spread? When you buy stocks you pay commission and the spread. But most of us do not think much of the spread but only the commission.

Let me explain more...

At any moment in time, there's always 2 prices in the market. Namely the BID and OFFER.

The BID is the best price someone is willing to buy from you.

THe OFFER is the best price someone is willing to sell to you.

Ok i think that confuse the heck of everyone down here, but in layman terms it means when you wanna buy, you pay the ASK PRICE.
When you wanna sell, you receive the BID PRICE.

And the spread is the difference between the ASK and BID.
Thus if the ASK is currently at 1.3002 and the BID is currently at 1.3000, the spread is 2 pips.

So what does a 2 pips spread mean? It means whenver you enter a trade, immediately that trade cost you 2 pips! That's because assuming you buy at 1.3002 and at the very point in time if you wanna sell, you can only sell at 1.3000. Thus you're down 2 pips.

Trading a standard lot, and given that each pip is worth $10. Then 2 pip spread cost you $20
(A standard lot is equivalent to 100,000 units, thus you're paying $20 to buy 100,000 units)

The spread for different currency pairs differ accordingly. The more liquid the currency pairs, the lower the spread. Thus traders usually look to trade currency pairs with a tighter spread as it lowers our transaction costs.

 

[buxinxie]

Are you talking about CME's FX futures?

 

[tradingwithrayner]

Are you talking about CME's FX futures?

I'm referring to spot FX.

Hope that helps!

 

[buxinxie]

I'm referring to spot FX.

Hope that helps!

OK, never trade either one. Out of curiosity, why do you prefer spot over FX futures?

 

[tradingwithrayner]

OK, never trade either one. Out of curiosity, why do you prefer spot over FX futures?

Both have its advantages. But for spot FX, the main advantage is that you can start with a really small account, even a $100.

Defintely good for newbies to try out without blowing a hole in their pocket.

Also spot FX allows you to trade micro lots, which is 1000 units whereas futures you have to trade a minimum of 1 standard lot which is 100,000 units.

Cheers!

 

[Futureskid]

Both have its advantages. But for spot FX, the main advantage is that you can start with a really small account, even a $100.

Defintely good for newbies to try out without blowing a hole in their pocket.

Also spot FX allows you to trade micro lots, which is 1000 units whereas futures you have to trade a minimum of 1 standard lot which is 100,000 units.

Cheers!

Your explanation seems to be too ambiguous... can u elaborate more?

 

[tradingwithrayner]

Your explanation seems to be too ambiguous... can u elaborate more?

Trading futures the minimum requirement is 1 standard lot, thus it's unlikely you can trade 1 standard lot with a $100 account.
For the EURO futures contract, 1 tick is $12.5. That's assuming you can even open an account with $100, a few ticks is enough to wipe your account dry and that's not including commissions.

Whereas for the spot FX you can trade a micro lot with $100.
A micro lot on the EURUSD is 1000 units and each pip is worth 10cents.
Thus having a $100 account and trading with 1 micro lot, you need the trade to go against you 1000 pips before blowing the account.

Thus for newbies starting out, trading spot FX would give them live experience without risking a huge portion of their money.

 

[Futureskid]

Trading futures the minimum requirement is 1 standard lot, thus it's unlikely you can trade 1 standard lot with a $100 account.
For the EURO futures contract, 1 tick is $12.5. That's assuming you can even open an account with $100, a few ticks is enough to wipe your account dry and that's not including commissions.

Whereas for the spot FX you can trade a micro lot with $100.
A micro lot on the EURUSD is 1000 units and each pip is worth 10cents.
Thus having a $100 account and trading with 1 micro lot, you need the trade to go against you 1000 pips before blowing the account.

Thus for newbies starting out, trading spot FX would give them live experience without risking a huge portion of their money.

But I heard that futures also have smaller size like 1 tick $1... so also possible to trade small right....?

and given a 1 tick 10cents size, i think most ppl would not even care for his or her position...

 

[buxinxie]

But I heard that futures also have smaller size like 1 tick $1... so also possible to trade small right....?

and given a 1 tick 10cents size, i think most ppl would not even care for his or her position...

Out of curiosity, I checked my futures broker's site. There is E-micro EURUSD (a futures counterpart of spot micro EURUSD) traded in CME's Globex platform. Its spec is $330 initial margin, $100 daytrade margin, and 0.001/$1.25euro tick/$ value.

So, looks to me it is more or less the same as micro EURUSD. But I am not sure about its liquidity (affect spread), daily volatility (ie trading opportunities) and typical commission cost.

As a scalper, I will die if I can't see who and how many are queueing up on the order book and how many, what price and what size are transacted. I have zero tolerance on risk of losing even 1 dollar.

 

[hellfire88]

good thread...

TS what style of trading you are adopting? scalping, day or swing?

what currency pairs you trade as well?

which brokerage are you using?

 

[tradingwithrayner]

good thread...

TS what style of trading you are adopting? scalping, day or swing?

what currency pairs you trade as well?

which brokerage are you using?

I do both swing trading and intra day trade. But for the sake of this thread, my trade ideas and illustration will be geared more towards swing trading. Reason being it takes longer for the trade to develop and more people are able to catch what i'm seeing at a comfortable pace.

I trade the more liquid pairs thus most dollar denominated ones i do trade them.

 

[tradingwithrayner]

Out of curiosity, I checked my futures broker's site. There is E-micro EURUSD (a futures counterpart of spot micro EURUSD) traded in CME's Globex platform. Its spec is $330 initial margin, $100 daytrade margin, and 0.001/$1.25euro tick/$ value.

So, looks to me it is more or less the same as micro EURUSD. But I am not sure about its liquidity (affect spread), daily volatility (ie trading opportunities) and typical commission cost.

As a scalper, I will die if I can't see who and how many are queueing up on the order book and how many, what price and what size are transacted. I have zero tolerance on risk of losing even 1 dollar.

When you mention order book, i'm assuming you're referring to level 2 data, also known as the ladder?

 

[tronian]

So will TS be posting currency pair SL and ***?

 

[buxinxie]

When you mention order book, i'm assuming you're referring to level 2 data, also known as the ladder?

Yeah...oso called Depth of Market (DOM). The one showing every transaction (ie transacted pairs of market order and counter limit orders) is called Time & Sale (T&S). One could still trade without a need to display a chart.

 

[tradingwithrayner]

Yeah...oso called Depth of Market (DOM). The one showing every transaction (ie transacted pairs of market order and counter limit orders) is called Time & Sale (T&S). One could still trade without a need to display a chart.

I totally agree on it!

 

[tradingwithrayner]

So will TS be posting currency pair SL and ***?

I'm not here to provide a signal service. There are many out there and you don't really need me for it.

What i will do it show price levels of different currencies im watching and open up for discussion on how i would trade it if certain setups occur.