Why did Jesse Livermore blow up a couple of times in his trading career?

April 20, 2014 at 5:11 pm

Answer by Dave Hughe:

He explained it himself in the book: he did not follow his own rules. This is exactly why so many people blow their accounts in Forex.

I used to be fascinated with Jesse Livermore but later on I realized that he had a gambling personality. Nevertheless, his advice is as sound today as it was back then.

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Aren’t stop loss orders completely pointless?

April 20, 2014 at 5:09 pm

Answer by Dave Hughe:

The major part of investing and trading is money management. If you don't mind losing all your money and even more if you trade on margin, then you don't need stop loss orders.
On the other hand, if you want to control your risk, stop loss orders are a must.

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What makes Fibonacci lines and pivots so favourable as an indicator in Forex?

April 20, 2014 at 5:08 pm

Answer by Dave Hughe:

Fibonacci lines and pivot points are in favour because they work.

Why they work that's a different question, to which there is no straight answer. But isn't that amazing to see how price touches a Fibonacci or a pivot line and reverses its course?

Personally, I use FIbonacci lines and pivots to set profit targets. On many occasions they enabled me to take profits just 1-2 pips away from the reversal point.

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In Forex, do Market Makers trade against you?

April 20, 2014 at 5:08 pm

Answer by Dave Hughe:

The truth is: you never know. But there is definitely a conflict of interest between the client and the broker regardless of what they say.

Always assume that your broker might be trading against you and question everything that happens in your account. Prior to committing to any broker check all reviews and opinions that you can find on that broker on the Internet.

On the other hand, do not go to extremes and blame your broker for your own mistakes. Try to look at each situation from both sides.

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What are the odds of becoming successful in Forex trading with very little math knowledge?

April 20, 2014 at 4:14 pm

Answer by Dave Hughe:

A good trading system does not have to be complicated at all.
I trade profitably just like you said: with the help of few indicators and basic patterns.

Below you can see the results of the trades posted in my blog:
Week 1:   +231 pips
Week 2:    –  19 pips
Week 3:   +415 pips
Week 4:   +366 pips
Week 5:   +137 pips
Week 6:   +150 pips
Week 7:   +  20 pips
Week 8:   +155 pips
Week 9:   +  23 pips
Week 10: -149 pips
Week 11: +465 pips
Week 12: +126 pips
Week 13: +  50 pips
Week 14: +306 pips
Week 15: +201 pips
Week 16: +  11 pips
Week 17: +325 pips

Total: +2813 pips

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What are the advantages of using a mini forex account for trading?

April 19, 2014 at 3:38 am

Answer by Dave Hughe:

If you trade and not gamble, the advantages of using a mini or even a micro forex account are numerous:
1. Trading with real money, which makes you emotionally involved as opposed to a demo account, where there are no real emotions. Thus, you learn to control emotions.
2. Trading in real-life conditions where you have to deal with slippage, wider than normal spreads, delays, and other obstacles.
3. Learning or testing new ideas without risking too much money.
4. Learning to use strict money management rules otherwise you get wiped out fast.
5. Trading profitably with real money for a reasonably long period of time is an objective proof that you can become a trader.

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How can you become rich in forex starting with only $20?

April 19, 2014 at 3:37 am

Answer by Dave Hughe:

Hypothetically, yes you can become rich in forex starting with only $20.

For that you need a solid trading system, strict money management, lots of patience and a little bit of luck.

Trade micro lots, use strict money management rules and use the power of compounding by reinvesting your profits.

I illustrated these points in my blog:
How much capital is required to trade Forex part time?
How to get rich trading Forex?…It’s simple.
How much money can you make trading Forex part-time?

Feel free to ask questions.

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What are the pros and cons of forex vs stock market?

April 19, 2014 at 3:37 am

Answer by Dave Hughe:

In Forex market there is greater leverage and you can also trade in micro lots. This allows starting with a small capital and risking just a few dollars per trade. Otherwise, where to trade is a matter of preference. If you know what you are doing, you can trade profitably in either market. Since Forex is a 24 hr. market, your time schedule might be a factor in deciding which market to trade.

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Do you have any good tips on currency trades?

April 19, 2014 at 3:32 am

Answer by Dave Hughe:

The currency trading is no different from other forms of trading. You have to have a trading system, a trading plan, a sound risk management and the discipline to follow them.

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Th., Apr. 18 end of week results: -32 pips (Total: +3,108 pips)

April 18, 2014 at 7:03 pm

This was a short slow week that resulted in a small loss of -32 pips. The up to date  results since the start of this blog are as follows:

Week 1:     +231 pips
Week 2:      –  19 pips
Week 3:     +415 pips
Week 4:     +366 pips
Week 5:     +137 pips
Week 6:     +150 pips
Week 7:     +  20 pips
Week 8:     +155 pips
Week 9:     +  23 pips
Week 10:  – 149 pips
Week 11:   +465 pips
Week 12:   +126 pips
Week 13:   +  50 pips
Week 14:  +306 pips
Week 15:   +201 pips
Week 16:    +  11 pips
Week 17:   +325 pips
Week 18:  +  80 pips
Week 19:  – 133 pips
Week 20:+ 380 pips
Week 21: –    32 pips

Total: +3,108 pips
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