#342: Should You be a Forex Scalper?

11/03/19 • 6 min

Podcast: Should You be a Forex Scalper? In this video: 00:27 – Is scalping a good idea? 01:22 – The reality is different 02:22 – Having small stops is not important 03:09 – Can be affected by news and emotions 03:26 – Sustainable and enjoyable trading 04:26 – Don’t get glued to the charts 05:30 – Don’t forget the US clocks change this weekend 06:13 – Email me your questions Should you consider being a Forex scalper? Let's talk about that and more right now. Hey traders, Andrew Mitchem here at the Forex Trading Coach with video and podcast number 342. Is scalping a good idea? I want to talk all about scalping. You see, I've received an email this week from somebody that said, "Look Andrew I'm new to trading but I've heard about scalping. It looks really, really good. Should I be a scalper?" They said the advantage is that they saw is that your stop/loss needs to be smaller, it's quicker to make profits, to make your pips. You can actually be in and out of a trade really, really quickly. They thought it was just a fantastic way of trading. Now, the part to take from that is the person who wrote the email hadn't really traded yet. But it just sounds good in theory, doesn't it? The difference is that in reality, to me in my opinion, scalping is not the way to go. Now, I'm not saying it doesn't work and of course it can work. It's like anything. It can work if you want it to and if it suits you as a trader with your personality. However, I would strongly suggest that for most people you don't look at scalping. The reality is different You see the thing is your stop/loss being smaller, that doesn't matter if you control your risk properly. Making more pips and making pips quickly, well you're making pips it doesn't matter really to you if you're making a trade in like sort of two minutes or whether it's two hours or 12 hours. It shouldn't really matter. The aim is to actually make the profit, not how quickly you can do it. Also the thought process of scalping of being in and out of the market really, really quickly, the problem is is that reality is that you have things called spreads. Every time you take a trade, the spread or the commission is paid to your broker and if you imagine you're taking, let's say for example a 10 pip profit target, but your spread is two or three pips, that really cuts into the trade. Of course, to make 10 pips you've really got to make 12 or 13 because of your bid and ask differences. So it becomes a real issue. Having small stops is not a great thing. Having small stops is not important It might sound good because you think you're losing less, but the thing is that if you actually use correct money management, your position size is what effects the outcome of the trade. It shouldn't really matter whether the stop is 10 pips or 100 pips. It doesn't matter. So the other hard thing I've always found in the past is that reward to risk out of scalping trades is very, very difficult. If you think you're going to have a small stop/loss of let's say call it 10 pips, and reality is therefore you're only sort of seven or eight pips away from being stopped out as soon as you place the trade, because again the spread, you've got to get yourself like 20 to 30 pips out of that trade to get yourself a two or a three to one reward to risk trade. Now that's all the technical trading side of it. Can be affected by news and emotions You get news and events, you get spikes in the spreads, et cetera. All those type of things that really if you have a small stop/loss or you're in and out of a trade real quickly, emotions come into it. All those things come into it that are a bigger picture of reality than the theory. Sustainable and enjoyable trading Also, is it sustainable? So here at the Forex Trading Coach, I've been posting on our membership site for nearly 11 years, every single day without fail, the daily trade suggestions that we post to our members.

Previous Episode

#341: Having the Right Mindset to Trade Well

Podcast: Having the Right Mindset to Trade Well In this video: 00:29 – Controlling your emotions as a trader 01:12 – Made money every year since 2010 02:06 – The problem with a small sample of trades 02:42 – Look at the bigger picture 04:49 – Understanding win rates Trade psychology is a massive part of trading, and it will make a huge difference to your overall success if you can master it. Let's talk about that and more right now. Hey, Forex traders. Andrew Mitchem here at The Forex Trading Coach with video and podcast number 341. Controlling your emotions as a trader I want to talk about a very, very important topic, and it affects probably most all traders. It's all about trade psychology, and how you can control your emotions, and how what goes on in your head has a massive impact on the overall outcome of your Forex trading journey, whether it's going to be successful or not. It comes down to a few things that you can do to help yourself and improve things. You see, unfortunately, as traders, most people expect instant results, winning trades, high win rates. They don't like losses, they cannot accept losses, and they jump from system to system. Unfortunately, people do this all too often and all too quickly. Made money every year since 2010 And I even see it here at The Forex Trading Coach. If you did absolutely nothing else, if you joined our course, did nothing else other than copy my daily trade suggestions each day of the week, which was going to take you five minutes once a day at most to do, you'd make money. Absolutely guarantee you'd make money, and how do I say guarantee that? I know that because since 2010, every single year, we have made money on those daily trade suggestions, and so it just shows how big an impact psychology and your mindset is because it doesn't matter how many graphs I can show people of all these winning trades consistently over time. People still decide to offer a couple of losing trades to give up or to change systems, or it doesn't work, and it's a real shame because we've proven that. The problem with a small sample of trades You see, the problem is if you strike a system and have like a small sample of trades, and you have some winning trades, you think the system is marvellous. You strike that same system and have a small sample of a few losing trades. You may have been seeing all these previous fantastic trade results that someone like myself has shown you, and then you go and trade the system live, and you have a few losing trades or even a losing month, and people give up. That's a real problem in trading. it really is a massive problem. Look at the bigger picture You see, you have to look at trading as a bigger picture, even on our daily trade suggestions. By the way, there's just one timeframe chart. That's all this is. You've got all the other timeframe charts that we talk about that we post on our forums site, on our live webinars. We put the weekly and monthly chart trades on our membership site as well. I'm just talking about one timeframe chart, daily trades. That's all. That has made money every single year since 2010, and so it's just mind-blowing why people don't just continue to follow that. You would have made money month after month. I went back through my records just now. The biggest losing months since 2010 was in February 2014 when we lost 5.15%. We went backwards just on the daily trades, 5.15% negative. That's the very worst we have done, and here we are almost at the end of 2019. That's the worst because we're trading with low risk, half of 1% risk portrayed, high-reward risk, so it's a proven H, and as I mentioned, one timeframe. That's all that is. You can go on and take the same strategy, the same methodology against all other timeframe charts when you see suitable trade setups. So it really is amazing how that can affect people, but it's important that whatever your strategy, whatever your system,

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#343: How to Protect Your Capital

Podcast: How to Protect Your Capital In this video: 00:46 – You must preserve your capital 01:08 – To help as many traders as we can 01:37 – 10 years of profitable trades on our membership site 02:51 – Forget about making pips 03:17 – The problem with most traders Looking to protect and preserve your capital is key to becoming a good trader. Let's talk about that and more right now. Hey, Forex traders, Andrew Mitchem here at the Forex Trading Coach with video and podcast number 343. I thought I'd come outside today. We're still in Cambridge in the North Island. Cherry blossom throughout the entire street, absolutely beautiful in springtime this time of year. We're moving down to Nelson in the South Island at the beginning of December. So while here, I thought I'd just come outside and take advantage of this. So, if you are on the podcast, sorry, but you can't see the beautiful trees behind me. You must preserve your capital Let's get back to the topic in hand about preserving capital. You see, most traders lose capital. It's hard money that you've earned to get into your trading account. Why blow it? Why do stupid things to throw it away? As traders, we've got to understand that we're in a business here. You've also got to understand that the stats suggest that about 90% of traders lose money. So, here at the Forex Trading Coach, we're about turning that around. To help as many traders as we can Our mission is to help as many traders as we possibly can. And our mission, also, is to help traders preserve their money, preserve their capital, so they can enjoy trading and understand and gain the benefits that trading offers, but only once you understand and know what you're doing and have confidence in your strategy. There's many things that we do here at the Forex Trading Coach in order to help our clients, not only have a strategy, of course that works, is that we post daily trades each day of the week. 10 years of profitable trades on our membership site And over the last 10 years I've been publishing those trades every single day for 10 years of the trading week. And do you know, not one single year have we lost money? Every single year for 10 years we have been profitable. Now, the power of compounding, and you probably know about it. If you took $100,000 back in February 2010 when I started posting those daily trades, today here into November 2019 your $100,000 with compounding, and only risking half of 1% of your account per trade, your $100,000 would now be worth 1.65 million. Quite outstanding considering they are all trades that have been published. They're all trades that take about maybe 5 to 10 minutes once a day for you to put on your platform. And it just shows the power of compounding, the power of high reward to risk trades and the power of low risk per trade. And that's, again, comes back to preserving capital. Because we have live webinars. In fact, I'm holding one tonight for clients in the European session. It's night my time. We have trades posted on our forum site. We do all these things that we can to help clients understand what good trading is all about, and to actually help them to earn while they learn. Forget about making pips But the other thing is, of course, you never hear us talking about pips. Never do we talk about, "Oh, we've made this number of pips," because it really doesn't matter. For us, it's about having low risk per trade. In other words, a half percent risk per trade maximum. High reward to risk. So, if we're making a three to one, let's say, it means we're risking half a percent and if we have profitable trade, we make a 1.5% account gain. And that is really, really important that you can do that. The problem with most traders And also, there's a phrase that someone told me the other day, and it's a really good phrase. And it was about the problem with most traders is that most traders, unfortunately,