LightFx Trading Crib

[To be a pro trader, you must think independently]

One of the reasons why most traders fail is because they ask questions like these…

• Is exponential or simple moving average better?
• Should I buy Tesla stock right now or wait for a pullback?
• What is the best RSI setting?

You’re probably wondering:

“What’s wrong with it?”

Well, it’s a sign you cannot think independently. It shows you want to be spoon-fed so you can skip the “work” and go straight to profits.

Unfortunately, it doesn’t work that way.

Why?

Because in trading, there’s no such thing as “best”.

What’s “best” for me might not be right for you because of our different goals, timeframe, personality, etc.

So…

If you want to succeed in trading (or in business), you must have the ability to think independently.

So instead of asking “what” or “when” questions, learn to ask…

Why.

This means you want to ask questions like:

• Why did he apply this trading strategy only to the stock markets and not FX?
• Why did he use a 200-day moving average as a trend filter?
• Why did he use a 40% trailing stop loss?

Do you see the difference?

Have a Profitable week 🙏

Here are some tips for successful forex trading:

1. Develop a trading plan: Before entering any trade, it's important to have a clear trading plan that outlines your risk management strategy, entry and exit points, and profit targets.

2. Use proper risk management: Forex trading involves a significant amount of risk, so it's important to use proper risk management strategies such as setting stop-loss orders and limiting the amount of capital you risk on each trade.

3. Be disciplined: Successful forex traders are disciplined and stick to their trading plan, even in volatile markets.

4. Keep up with news and events: Stay informed about economic and political news that can affect currency prices. This will help you make informed trading decisions.

5. Use technical analysis: Technical analysis can provide valuable insights into market trends and help you identify potential entry and exit points for trades.

6. Practice with a demo account: Many forex brokers offer demo accounts that allow you to practice trading with virtual money. This can help you develop your trading skills and test out different strategies before risking real capital.

7. Continuously learn: Forex trading is an ongoing learning process. Stay up-to-date with the latest market trends, trading strategies, and economic news to continuously improve your skills as a trader.

[The hidden cost of copy trading that nobody tells you]

Copy trading is a business.

So, if you’re not being charged any upfront fee, then you’re paying more for the spread and overnight fees.

I’ll explain…

For most Forex brokers, the spread on EUR/USD is 1 pip. But on a copy trading platform, you might pay 2 to 3 pips more.

But don’t take my words for it because you can compare the spreads of a normal Forex broker with a copy trading platform and you’ll see the difference.

So, what’s the implication?

Two things.

#1: If you’re a trader being copied, then bear in mind your trading strategy won’t work as well because you’re paying more in spread (compared to a typical Forex broker).

#2: If you’re copying another trader, then it’s best to follow traders who trade infrequently so the spread doesn’t eat up a huge chunk of your profits.

Now, the spread isn’t your only cost because you still have to consider overnight fees (if you’re holding positions for longer than a day).

This fee is calculated by taking Libor + X%.

(Libor stands for inter-bank offered rate. It’s an interest rate that banks charge to other banks for borrowing the money.)

So, what is X?

Well, this is the mark up that’s determined by the copy trading platform and you’ll need to check with them for the exact amount.

The good news is, you don’t have to worry about calculating all these because the platform will likely do it for you—so do check it out before placing a trade.

Now, there are probably other fees to consider but the spread and overnight fees make up the chunk of it.

Learnt something NEW 🥰

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