A novice trader should start first by the medium term using a demo forex account. It happens that the medium term is easier to understand, produces less stress compared to the short term, you do not need hundreds of transactions per month and above who can properly combine technical analysis with fundamental. Moreover, operating in the medium term it suits people who work and do not yet have the currency market as their main source of income (which I’m sure are many of you).
The medium-term trend as the context where strategies are applied in scenarios four hours and day where operations could be open a few days, weeks or even months using a demo forex account is defined. It’s important to have good stop protection when such strategies so that market volatility and the news does not fulminate our positions so easily used.
Here are three tips relate to Trading Forex, using a demo forex account for training and pattern recognition.
Load the input level
Horner said at the beginning, I tried a demo account Forex, collect information systems to capture short-term strong trends. That is, those who do not enter into the trends of well-established “professional”. The surprise was that this technique does not work at all. Since no one can spend 24 hours a day watching screens to decide when to open a position, the expert suggests that it is preferable to calculate an average.
Kathy Lien, known and successful forex trader worldwide fame says, “My best trades are certainly those where technical analysis with fundamental analysis converge.” Mark Douglas traders famous teacher says: “The ratio of risk: benefit of a trader should be at least 1: 3, which means you risk a dollar for every $ 3 of profit potential (another way to understand it is to risk 150 pip’s and win 200 and risking 450 or 600 pip’s search) “. If we combine these concepts see who are the medium-term systems best suited to trading for a novice trader who just started forex account with a Demo Forex.
Indeed. If for example you miss a buy (long) in the Forex demo account, then it should take the average of the most recent and close to the minimum level four and use it as your new entry price. Conversely, if a sell signal skips and should take the average of the last four maximum, this will be its output. This technique is not always allowed to enter the market, but will give you a second chance.
Suppose you use a Forex Demo account and have a strategy (a system), trend that has a probability of operations for and against 50% and 50% respectively. As a medium-term system you. No need “to do operations,” only those where technical analysis and strategy come together and give an input that also has a key support (macroeconomic). Moreover, this trend has a system of risk and return ratio of 1: 3 and only risk per trade as most 2% of the amount of total capital. For example, if the trader makes 10 trades (uninterrupted losses) capital of the trader will have decreased by almost 19%, but is still with intact chances to recover. Then come the operations for bringing the end of the operation number 20 the trader’s capital is more than 46% of the initial amount, because it was earning three times as risky.
Do not place your orders in round numbers
Banks often “clean up” the market. Or in other words. You are the object of a game in which banks are going against them. In fact, banks can see how the controls accumulate at certain price levels. And here, in psychology, because banks know that people often place their orders in round figures.
For example, 1.2200 or 0.7100. And therefore know where the mass cleaning and how and when. For this reason, Horner suggests conventional release order levels. “We are in a position before or after Mass, but not with her,” he explains. In fact, if you place your orders using a Forex Demo account for psychological numbers or round numbers, “one stone” remains.
But do a little more real the situation and assume that the system now has a medium-term probability of success of 40% and 60% failure. Even in that context, the trader will end quite positive at the end of the operation number 20 with a little more than 25% profit on the platform with Forex demo account. All this (again) thanks to have a system which seeks to earn triple the stakes. Even I am going to complicate the situation and assume that the trader has a system where the odds are in your favor only 30% against 70%, despite having lost continuously for 70% of events The trader still has “the ability to rise and only 30% in favor of operations to be almost 7% return at the end of all operations”.
They are introduced immediately through demo forex account, which open to a position between two very specific orders. First protection ‘stop’ and the other an order for a limited profit target value. But it must be done with conditional orders SAU type; either cancels the other.
Thus, two orders are executed, and when one of them goes in the opposite direction we want, the other relieves or absorbs the effect. For example, if the protection has reached its “unique”, the profit target order is automatically canceled in the Forex demo account. What is not recommended in all cases is the use of mental judgments.
Finally, I suggest you reflect a little about everything read and avoid being part of the many losers in this market that are so understanding nothing about issues of capital management and want to learn Forex self-taught, without prior recognition through a Forex demo account. A strategy that has a ratio of 1: 3 allows you to recover quickly even when they “have bad times”. And operate the medium term lets make operations quality and not quantity.
I think that after being a successful medium-term operator using Forex demo account, the trader (that experience), could operate more chance of success in the short term because in smaller contexts need much more skill, knowledge market and emotional control. It is a logical process: learning to operate well in the medium term and then move to short. At least I think about it.