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How do you know which stop loss is the best solution? Well, you can measure it and compare it with other stops. Basically every stop loss comes with a cost. And the lower the cost, the better it is.
You need to invest some time, effort and money to become profitable. There is no way around this. I use the MetaTrader apps on my mobile to check the accounts from time to time. How do I tell my computer what it needs to do? You create something like a recipe.
Trading is often like cooking. You need to find the right ingredients and spices to cook a tasty meal. And you need to know how much is enough, because too much salt can ruin the whole thing.
Once the equity goes down, a good system needs to be able to handle the situation.
Do you expect to always make a profit with everything you do? In my eyes, that is like hoping to take a trip with your car and having all the traffic go out of your way.
Some time ago I decided to allocate more capital for each micro lot trade and never trade the Swiss franc again. But actually this is not a good idea because today I know that all currencies cause problems from time to time.
Any ten year old computer can run an automated trading system. That is why I consider automated trading to be the best invention since sliced bread.
I don’t do automated trading for the entertainment. I do it for the results, because it works for me.
Some people survive because they know how to protect themselves against risky threats. Our idea is to use simple automated trading solutions. In real trading, you need to adjust your risk in a way that will save you and your account. Even in an unpredicted crisis, excitement is not a good reason for a trading system. Actually, I like things to go up slow and steady.
There is a term that is called survivorship bias. It is one of the most frustrating things that I have learned and it means that just because somebody has survived a crisis doesn’t mean that he or she is an expert.
Most traders have a fear problem. But why? If some entry is able to produce profits on a consistent basis, it should be possible to produce predictable losses on a consistent basis with a reverse entry. The profit expectancy of a trading system is based on the law of the regression to the mean.
Today I am still very happy that I was smart enough to start with a demo account. So it was no real money.
Currencies never declare insolvency. Currencies never can be manipulated by a single company and the market is liquid enough to buy or sell whenever you like.
Most people think that backtesting is a tool to find the right kind of entry signal. But actually the more valuable thing is that it will help you to find out how to scale your system to survive financial earthquakes.
Each price on the chart and each value of an indicator corresponds to a concrete number with which one can carry out mathematical calculations.