As to the topic which the first post touched on. Many of us have misconceptions as to what we believe is the correct way to trade. Scalpers, and swing traders all have bias. Just as how one Swinger can call Long. The other can call Short. Yet we both have the exact same chart. Look at today for an example.
A very low trading range in which we did not pass two pivots on either eur/usd or eur/jpy. Although Mondays are the lowest ranged trading days. Most SWINGERS were not able to profit more then 4% today alone. Scalpers on the other hand would of had a field day trading either pair. Most people via PM have asked me why I have taken the positions which I did today. Mainly, because they seem to be the start of the reverses which the 1m chart shows.
My answer to most was that the 1M chart sets up all other time frames. The only way to find an accurate entry for either a scalp or a swing position. Would be by studying the 1m time frame. If you were to look at any High or low created. They ALWAYS happen at a daily pivot.
Does anyone recall when eur/usd about 6 months ago was at 1.22xx Well the lowest low was the touch of a daily pivot. : ) You will notice most 'GURU SWINGERS' use fibs. Yet none of their fibs ever match with a daily pivot. Which is why they have such a high stop loss. If you truly believed that a currency pair would reverse. Why would settle for a stop loss of more then 20 points?
It is because their position is based on BIAS, and not on trying to find the lowest DrawDown possible. DrawDowns should be calculated on the amount of points in RED you are, before you close the position in a loss, BreakEven, or profit! The mear fact that we stress the DrawDown percentage means nothing. Why is that? Well think of it this way.
If you deposit 100 usd, and turn it into 400 usd. If you withdraw all of your profit (the 300usd) and half of your principle (50usd) You would be left with 50usd in your account. Now say you begin to wager more aggressively or decide to have a swing trade open for 400 points. In which you end up margin calling. Your draw down would be 99.99% Which most people deem as 'A horrible account management'. Yet in no way shape or form does 'Drawn Down' factor in the amount of money you deposited, with the amount of money you have withdrawn. :)
If you truly want to judge a persons system. Look at each of their trades, and simply look at how many points in red they were before they closed for a loss, break even or profit! If those points are more then 20 points, then they should not be followed. Only, because they are conceding to losing more then 1/4 of any currencies pair DAILY RANGE. Which means their position is based on BIAS, and not logic.
10% a month is a goal too high set in my opinion, given the premises that you want to keep your investment safe. Of course if you want to take the risk there is no limit to your profit.
2% a month on the other hand can be realistic for safe trading. My systems aim at funds safety and are designed to withstand a financial crisis. They make about 2-8% on average per month, depending on risk profile.
AmberLynn posted: by using a pending order your broker HAS TO FILL THAT ORDER AT THAT PRICE. People who say that their sl has been skipped over are either lying, or they trade with ETORO.
Whether you've had experience with eToro in the past, or whether your comment is based on things you've heard from other traders, I very much regret that this is the impression you have of our service. I can only hope that in the future we will be able to change your mind.
I don't think your analysis is 100% accurate. You are right that a broker has to fill orders at the price set by the trader, however you must take into account that as the price of an instrument fluctuates it does not necessarily hit every single price point on its way up or down. In times of volatility especially, it is not uncommon for prices to jump up or down by 2,3,5, or even 10 pips at a time. In this case, since the instrument never hit the price set by the trader, the broker cannot execute the order until the specific price is hit. This is the case for all brokers, and this is why we recommend keeping an eye on trades in times of economic data releases and announcements.
If indeed you are/were at some time trading with eToro and feel that you have not been treated fairly, please don't hesitate to contact us at email@example.com so we can try to compensate you for any grievance.
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