Forex for a trader
When did e-trade stop trading forex

When did e-trade stop trading forexETrade FX - Forex Broker information, rating, reviews. E*TRADE is an innovative financial services company offering a full suite of easy-to-use online brokerage, investing and related banking solutions, delivered at a competitive price. We empower individuals to take control of their financial futures by providing the products, tools and services they need to meet their near - and long-term investing goals. We provide trading forex currency pairs services and forex options to customers online and through our network of customer service representatives, investment professionals, and investment advisors – over the phone and-in person at our 30 E*TRADE branches. Demo account on MT4 platform is available for the customers. The minimum deposit is $100. etrade forex commission and etrade forex fees are low. The actual currency rates are available on the broker’s site. Choose from stocks, options, mutual funds, etfs, and more to build the right portfolio for your short - and long-term goals. Want to talk to a real person? No problem. Just call or stop by a local E*TRADE branch. Helping investorslike you is what we do best. $9.99 or less for stock and options trades delivered in an easy-to-use platform with all the tools and services you need.

On the forex broker etrade profile page at our website you can read trading reviews by other traders as well as write your personal review of your personal forex trading on etrade. Where to Place a Stop Loss When Trading. Always set a stop loss order when day or swing trading. While we form expectations and make trading decisions based on what we believe will happen using our tested method, the fact is, at any moment price can do anything. Not having a stop loss in place leaves us susceptible to a very large loss. Stop losses control risk, but need to be placed at a price that still allows the market to move toward the target or in our expected direction. Once set, a stop loss can also be managed as the trade progresses. What Are Stop Loss Orders. The stop loss is an order placed at the same time a trade is opened, to control the maximum loss of that trade. A stop loss, when triggered (the price touches the stop loss price), closes out the position at any price available. This can result in slippage, meaning the loss–even with a stop loss order–may be larger than anticipated. While this is a drawback, I have typically found that I would have taken an even larger loss had my stop loss not been there. Overall, slippage has never been an issue for me and I have been trading since 2005. It is important to place a stop loss so you have a good idea how much a trade could lose.

While no one wants to take a trade thinking they will lose, losses are a constant in trading , and losses must be controlled in order to succeed. Setting a stop loss also allows us to determine our position size. If we don’t set a stop loss it’s very hard to choose a position size that is in alignment with the account size. I choose not to risk more than 1% of my capital on a single swing trade or day trade. Even following these guidelines it is possible to make a substantial amount of money (see: How Much Money Can I Make as a Day Trader). Risking up to 2% per trade is acceptable once you have a well-established system that you know provides consistently favorable results. Stop Losses and Position Size. Let’s say you have a $10,000 trading account. If you risk 1% of the account you can risk $100 on a trade.

Without a stop loss “$100” means nothing. You need to define your stop loss and then calculate your position size in order to define how that $100 will be risked. Let’s say you decided to buy 100 shares of stock at $50 and place a stop loss at $49 (risking $1 per share). If the stop loss is hit then you have lost $100. Therefore, the ideal position for your stop and risk management protocol is 100 shares. But in order to calculate that you had to set the stop loss. Notice that risking $100 doesn’t mean we only buy $100 worth of stock. In this case, we are only risking $100 but are in fact buy $5,000 worth of stock ($50 x 100 shares). This example greatly simplifies things though. A stop loss should not be placed at an arbitrary level. It should be at a price level, that if hit, shows you were wrong about the trade (at least for now). Where to a Set Stop Loss When Trading. I use one method for setting a stop loss, and it can be applied to almost every strategy I trade. Having a stop loss method you can use no matter what market or time frame you are trading greatly simplifies things. My preferred stop loss method is a fixed stop loss.

It may vary slightly based on what market I am trading or what time frame, but overall, every single day and every single trade I know that my stop loss is going to be pretty close to this fixed amount. This is covered in several strategies in my Forex Strategies Guide eBook and also my Stock Market Swing Trading Video Course. This method allows me to put my stop loss close to my entry price, but still far enough away that it won’t get hit if my analysis is correct . Below we will look at stop loss examples in the forex, futures, and stock markets. When I swing trade major forex pair s – for me, this is trading off 1-hour andor 4-hour charts–I typically enter on a breakout of a small consolidation. My stop loss is placed 5 pips outside the opposite side of the consolidation from the entry. The chart below shows an example of this. The AUDUSD formed a choppy consolidation right along a descending trendline. This signaled that I wanted to go short when the price started to drop again. I took a short (middle blue line) and placed a stop loss 5 pips above the consolidation high (upper yellow line marked “stop”). In the forex market we have to account for the spread on our stop loss when we are in a short trade, so in this case, my stop loss would actually be placed 5 pips, plus the average spread, above the consolidation high…or about 6 pips above the consolidation high. If you take a long trade, in the forex market, placing a stop loss 5 pips below the consolidation (or whatever price structure you are using to enter) is often sufficient. AUDUSD hourly chart (click to enlarge) The same method applies to day trading forex, except my stop loss will go 1 pip (plus the spread when applicable) outside the consolidation. This makes it easy to place stop loss orders quickly, and not have to second-guess where you should be putting it on every trade.

This stop loss method is designed for the strategies I trade. It may not work for all strategies; if you trade a different strategy you will need to calibrate your stop loss so that it’s effective for your method. Effective means it gets you out of trades that would have resulted in even bigger losses, but still allows you to profit when the price moves favorably. Inevitably, sometimes you will get stopped out only to watch the price immediately move back in your expected direction . Welcome to trading. This happens. If your profits are bigger than your loses andor you win more trades than you lose, you will still come out ahead over many trades. Letting a loss grow is a much bigger issue than getting stopped out. When I day trade ES futures I use a similar approach. Every day, every trade, my stop loss is the same. It is placed three ticks abovebelow the consolidation I am sellingbuying in. Since I always try to buy within one tick of a consolidation low or sell within one tick of a consolidation high, my stop loss is always 4 or 5 ticks on every trade. This allows for me to rapidly place orders. My initial target goes 8 ticks away from my entry point when trading this market.

Entry, Stop Loss (red) and Target (green) on Futures Chart (click to enlarge) If we were swing trading ES futures, and buying or selling on a consolidation breakout, then we would place a stop loss about 1 to 2 points outside the opposite side of the consolidation from the entry. For day trading stocks, I use a bit of subjectivity because stocks vary wildly in terms of price and volatility. For most stocks I place my stop loss 2 to 3 cents outside the consolidation I am entering on. If it is a very volatile stock, or a high-priced stock, then I will expand this “buffer” based on how much the stock moves. Quickly look at prior trading opportunities within the stock to help gauge how far your stop loss should be outside the consolidation. For swing trading daily stock charts, my default is to place a stop loss 5 cents outside the consolidation. This is effective for many stocks, but often needs to be expanded if trading volatile or high-priced stocks. This is because 5 cents is a decent sized move for a $5 or $10 stock, but is absolutely nothing in a $200 stock. In the daily chart swing trading example below, the stock is fairly volatile. While using a 5 cent stop loss outside the consolidation or below the most recent low would have worked, I actually opted to place a stop loss 20 cents below the most recent swing low. The chart shows two potential entry points based on the strategies I use, as the market sometimes provides more than one opportunity to get into a trade. Where to Set a Stop Loss – Stop Loss Management. New traders should allow the market to hit their original stop loss or target: “set it and forget it.” Actively managing trades complicates the trading process and can induce a lot of emotion which new traders may not have the skill set to deal with. That said, some basic stop loss management is acceptable, such as reducing risk once a trade is closing in on the profit target. Only move a stop loss to reduce risk or lock in profits.

Never move a stop loss to accommodate a growing loss hoping it will turn around if you give it more room! While I often just get out of trades at my stop loss or target, I also have some guidelines that allow me to alter my stop loss or target during a trade, or alter my exit plan. If day trading, I get out of a trade about 2 minutes before a major economic news announcement. If swing trading, I get out of a trade if the current price is close to my stop loss or target and a major economic news announcement is coming out soon. Stop loss may be moved to near breakeven once a trade is 50% of the way to the target. Stop loss may be moved in further, guaranteeing a profit, once the price moves 75% of the way to the target. At the outset of some trades, I determine that I will use a trailing stop loss. As the price moves favorably, I move my stop loss to lock in profit in alignment with the trailing stop loss strategy. If I happen to be watching a trade and the price is very close to the target, but hasn’t hit the target, I manually get out immediately. That’s it. Keep it simple. Final Word on Using Stop Loss Orders. With day trading and swing trading, control risk. Use a stop loss! A stop loss helps determine our position size.

My method is to place a stop loss at the point closest to my entry point that won’t get triggered if my analysis and expectation is correct. This typically puts my stop loss just outside the opposite side of a consolidation from my entry. When I am wrong, I am wrong small. Letting the price hit your stop loss or target is recommended when you are starting out; don’t intervene in your trades while they underway. As you improve, and you have the discipline to let the price hit your stop loss or target, then consider managing your stop loss while in a trade to potentially improve performance. Actively managing won’t always result in greater profits though. If letting the price hit your stop loss and target works for you, don’t mess with it. For a complete trading method, check out my Forex Strategies Guide for Day and Swing Traders . It leads you step-by-step through a process for becoming a successful trader, as well as providing strategies and trading plans you can use to build your capital in a risk-controlled manner. The eBook covers forex basics to advanced tactics. By Cory Mitchell, CMT. You may also like: Analyzing Price Action: Velocity and Magnitude – Two of the most important facts when analyzing price action. Can help assess probabilities of trades and therefore help to filter or confirm upcoming trade signals. Learn Forex: How to Set Stops. by James Stanley , Currency Strategist. Price action and Macro.

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Article Summary: Many traders know that they need to place stops, and if they don’t know they will likely learn very quickly. Market movements can be unpredictable and the stop is one of the few mannerisms that traders have to prevent one single trade from ruining their careers. When traders begin to learn to trade, one of the primary goals is often to find the best possible trading system for entering positions. After all, if the trading system is good enough, all the other factors like risk management, or trade management – well, they can take care of themselves, right? After all, if our trades are moving in our direction and we are making money, all of these other factors might seem unimportant: All we have to do is find that system that works at least the majority of the time, and then most traders figure they can figure everything else out as they go along. Unfortunately, the truth is that all of the above assumptions are hogwash. There is no system that will always win a majority of the time, and without trade, risk, and money management – most new traders will be unable to reach their goals until they make some radical changes to their approach. This is a wall that many traders will hit, and a realization that will become part of most of their realities. Because likely, none of us will ever walk on water, or have a crystal ball so that we can display super-human capabilities of predicting trend directions in the Forex market. Instead, we have to practice risk management ; so that when we are wrong, losses can be mitigated. And when we are right, profits can be maximized. Once again, most traders that will find success in this business are going to come to this realization before they can adequately address their goals. Realizing that risk management must be practiced is one thing, but doing it is an entire different matter.

That’s what this article is about, investigating the importance of using stops and then further, some various ways of doing so. Why are stops so important? Stops are critical for a multitude of reasons but it can really be boiled down to one simplistic cause: You will never be able to tell the future. Regardless of how strong the setup might be, or how much information might be pointing in the same direction – future prices are unknown to the market, and each trade is a risk. In the DailyFX Traits of Successful Traders research, this was a key finding – and we saw that traders actually do win in many currency pairs the majority of the time. The chart below will show some of the more common pairings: Traders saw greater than 50% winning percentages in many of the most common currency pairs. So traders were successfully winning more than half the time in most of the common pairings, but their money management was often SO BAD that they were still losing money on balance. In many cases, taking 2 times the loss on their losing positions than the amount they gain on winning positions. This type of money management can be damaging to traders: necessitating winning percentages of 70% or greater merely to have a chance at breaking even. The chart below will highlight the average loss (in red) and the average gain (in blue). Traders lost much more when they were wrong (in red) than they made when they were right (blue) In the article Why do Many Traders Lose Money , David Rodriguez explains that traders can look to address this problem simply by looking for a profit target AT LEAST as far away as the stop-loss. So if a trader opens a position with a 50 pip stop, look for – as a minimum – a 50 pip profit target. This way, if a trader wins more than half the time, they stand a good chance at being profitable. If the trader is able to win 51% of their trades, they could potentially begin to generate a net profit – a strong step towards most traders’ goals. But now that we know that stops are critical, how can traders go about setting them? Setting Static Stops.

Traders can set stops at a static price with the anticipation of allocating the stop-loss, and not moving or changing the stop until the trade either hits the stop or limit price. The ease of this stop mechanism is its simplicity, and the ability for traders to ensure that they are looking for a minimum 1-to-1 risk-to-reward ratio. For example, let’s consider a swing-trader in California that is initiating positions during the Asian session; with the anticipation that volatility during the European or US sessions would be affecting their trades the most. This trader wants to give their trades enough room to work, without giving up too much equity in the event that they are wrong, so they set a static stop of 50 pips on every position that they trigger. They want to set a profit target at least as large as the stop distance, so every limit order is set for a minimum of 50 pips. If the trader wanted to set a 1-to-2 risk-to-reward ratio on every entry, they can simply set a static stop at 50 pips, and a static limit at 100 pips for every trade that they initiate. Static Stops based on Indicators. Some traders take static stops a step further, and they base the static stop distance on an indicator such as Average True Range. The primary benefit behind this is that traders are using actual market information to assist in setting that stop. So, if a trader is setting a static 50 pip stop with a static 100 pip limit as in the previous example – what does that 50 pip stop mean in a volatile market, and what does that 50 pip stop mean in a quiet market? If the market is quiet, 50 pips can be a large move and if the market is volatile, those same 50 pips can be looked at as a small move. Using an indicator like average true range, or pivot points, or price swings can allow traders to use recent market information in an effort to more accurately analyze their risk management options. Average True Range can assist traders in setting stop using recent market information. Created by James Stanley.

We walked through such a mechanism in the article, Managing Risk with ATR (Average True Range) . Using static stops can bring a vast improvement to new trader’s approaches, but other traders have taken the concept of stops a step further in an effort to further focus on maximizing their money management. Trailing stops are stops that will be adjusted as the trade moves in the trader’s favor, in an attempt to further mitigate the downside risk of being incorrect in a trade. Let’s say, for instance, that a trader took a long position on EURUSD at 1.3100, with a 50 pip stop at 1.3050 and a 100 pip limit at 1.3200. If the trade moves up to 1.31500, the trader may look at adjusting their stop up to 1.3100 from the initial stop value of 1.3050. This does a few things for the trader: It moves the stop to their entry price, also known as ‘break-even’ so that if EURUSD reverses and moves against the trader, at least they won’t be faced with a loss as the stop is set to their initial entry price. This break-even stop allows them to remove their initial risk in the trade, and now they can look to place that risk in another trade opportunity, or simply keep that risk amount off the table and enjoy a protected position in their long EURUSD trade. Break-even stops can assist traders in removing their initial risk from the trade. Created by James Stanley. But what if EURUSD moves up to 1.3190 and our trader decides to get greedy? Well, in this case, they can remove the limit altogether and instead look to trail their stop as the trade moves higher.

After price moves to 1.3200, the trader can look to adjust their stop higher to 1.3150, a full 50 pips beyond their initial entry so now, if price reverses, they are taken out of the trade for a 50 pip gain. But if EURUSD moves higher, to 1.3300 – they can enjoy a larger upside than they initially had with their limit at 1.3200. Traders can look to manage positions by trailing stops to further lock in gains. Created by James Stanley. This is maximizing a winning position, while the trader is doing their best to mitigate the downside. Dynamic Trailing Stops. There are multiple ways of trailing stops, and the most simplistic is the dynamic trailing stop. With the dynamic trailing stop, the stop will be adjusted for every .1 pip the trade moves in the traders favor. So, at the outset of the trade in the above example, if EURUSD moves up to 1.3101 from the initial entry of 1.3100, the stop will be adjusted up to 1.3051 (increased 1 pip for the 1 pip move the trade made in the trader’s favor). Dynamic Trailing Stops adjust for every .1 pip that the trade moves in the trader’s favor.

Created by James Stanley. Fixed Trailing Stops. Traders can also set trailing stops through Trading Station so that the stop will adjust incrementally. For example, traders can set stops to adjust for every 10 pip movement in their favor. Using our previous example of a trader buying EURUSD at 1.3100 with an initial stop at 1.3050 – after EURUSD moves up to 1.3110, the stop adjusts up 10 pips to 1.3060. After another 10 pip movement higher on EURUSD to 1.3120, the stop will once again adjust another 10 pips to 1.3070. Fixed Trailing stops adjust in increments set by the trader. Created by James Stanley. If the trade reverses from that point, the trader is stopped out at 1.3070 as opposed to the initial stop of 1.3050; a savings of 20 pips had the stop not adjusted. Manually Trailing Stops. For traders that want the upmost of control, stops can be moved manually by the trader as the position moves in their favor. This is a personal favorite of mine, as price action is a heavy allocation of my approach, and many of my strategies focus on trends or fast moving markets.

In the article, Trading Trends by Trailing Stops with Price Swings , we walk through this type of trade management. When using price action, traders can focus on the swings made by prices as trends move higher or lower. During up-trends, as prices are making higher-highs, and higher-lows – traders can move their stops higher for long positions as these higher-lows are printed. Once a ‘higher-low’ is broken, the trader will exit the trade under the presumption that the trend that they were trading may be over. Trader adjusting stops to lower swing-highs in a strong down-trend. --- Written by James Stanley. To contact James Stanley, please email [email protected] com . You can follow James on Twitter @JStanleyFX. To join James Stanley’s distribution list, please click here. DailyFX provides forex news and technical analysis on the trends that influence the global currency markets. How To Place Stop Losses Like a Pro Trader. Stop loss placement is perhaps not the most glamorous of trading topics to discuss, but it is a critically important one. If you do not know how to properly place your stop losses you will be in for a very, very rough ride as you trade the markets. Essentially, for a trader, everything hinges on proper stop loss placement and risk management. If you understand these two aspects of trading and how to approach them properly, making consistent money in the market will become much, much easier for you. Note: This lesson is based on higher time frame charts and the concepts are not applicable to very low time frames which is a different world of trading and not something I do or recommend so I can’t comment on it. The theory behind placing stop losses like a pro trader.

The first thing to understand and drill into your head about stop loss placement is that you should NEVER place a stop loss based on some random amount of pips. I know a lot of traders do this because I get emails from traders telling me they use “20 pip stops” or “50 pip stops”, etc. etc. This is NOT proper stop loss placement and it is definitely NOT how professional traders place their stop losses… A stop loss should typically be based on a level in the market. Price should have to breach a level to ‘prove’ your trade wrong. You want to see price invalidate your view by giving you fact-based evidence you are wrong, that evidence comes in the form of the most logical nearby level of support or resistance being breached. You need to take into account the context of the market you are trading and determine what level price would have to break through before your original view doesn’t make technical sense anymore. Let’s take a look at two examples to make this clearer… The first example below shows a random pip amount stop loss placement, the second example shows a stop loss placed within the context of the market and nearby levels. Make note of the end results of both trades… Notice in the chart below the trader placed his stop loss at an arbitrary 50 pip distance from entry. Traders typically do this because they don’t understand how to place stops properly and also because they want to trade a bigger position size. This is wrong. You need a logic chart-based reason to place a stop loss, not just a random pip distance or a pip distance that will allow you to trade the size you want.

Notice this trader would have been stopped out for a loss just before the market shot higher, without them on board… In the next chart, we can see how this trade worked out for the trader who knew how to place stops properly like a pro and who wasn’t placing his stop arbitrarily or based on greed (to trade a bigger size). Notice the stop loss was placed beyond the key support level and beyond the pin bar low, giving the trade good space to work out but also being placed at a point that would logically invalidate the trade if price moved beyond it…. Let’s briefly go over typical stop loss placement on two price action setups I teach; the pin bar signal and the inside bar signal. You will notice, I used a risk reward ratio of 2 to 1 on each trade, this is my ‘default’ risk reward. In other words, I always start any trade by seeing if a 2 to 1 (or more) risk reward is realistically possible given the market structure and context the pattern formed within. For expanded examples, check out my lesson on how to place stops and targets like a pro. Note: Be aware of the average volatility over the last 7 to 10 days of the market you’re trading. You want your stop at least half of ATR (average true range) if not more or you will get stopped out due to noise. The Average True Range is a tool we can use to see average market volatility over XYZ days. It is a good tool to utilize for stop loss placement when no nearby key levels are present. To learn how to apply and use the ATR tool more in-depth, check out my article on the average true range. The example below shows how to use the ATR for stop loss placement and how it can keep you in a trade despite initial choppy conditions after the pattern… Important stop loss placement tips.

It’s important to consider reward or target potential before taking any trade. You base the potential target of a trade on the stop loss distance. If the stop has to be too wide in order for the trade to have enough space to potentially work out, and the risk reward potential doesn’t stack up, then it’s usually not the best idea to take the trade. Risk reward and position sizing are intimately related to stop loss placement obviously, and crucial topics in their own right. But, we are focusing here in this lesson just on stops, be aware that stops are paramount and take precedence over targets, in a way, stops are a qualifier for the target and overall risk reward and will effectively help you filter trades you should take and should not. It is important to note that stops should always remain constant and can’t be widened, however targets can be widened, stops should only ever be tightened and moved into break even and trailed, make sure that’s concrete in your trading plan. Stops are crucial to managing risk because once we find the stop loss placement we can then determine our position size on the trade and then we know ahead of time the cost and risks of the trade. As part of our trading business plan, stops are a cost of doing business as a trader, they are also there to force us to get out if we are wrong on a trade, despite our emotional bias towards staying in a trade, which in the end can cost us dearly if we were to hang onto a loser until we blew out our account balance. A properly placed stop loss is truly the starting point of a successful trade. It allows us to proceed with calculating reward targets on trades and position size, effectively allowing us to execute our predetermined trading edge with a clear mental state and discipline. Traders who do not focus on stop loss placement first or put a lot of importance on doing it right, are doomed to fail and blow out their accounts.

I hope today’s lesson has given you a little ‘snapshot’ into how I approach stop loss placement. My trading course and members’ area will further educate you on how I place stop losses and how I incorporate stop loss placement into my overall trading strategy. To learn more, click here. LEARN FOREX: How to Effectively Use a Trailing Stop. by Walker England, Trading Instructor. Your Forecast Is Headed to Your Inbox. But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk. Your demo is preloaded with ?10,000 virtual funds , which you can use to trade over 10,000 live global markets. We'll email you login details shortly. You are subscribed to Walker England. You can manage you subscriptions by following the link in the footer of each email you will receive. An error occurred submitting your form. Please try again later.

One of the recurring issues I see with new traders is their difficulty with exiting open positions. This isn’t surprising, as so much emphasis is put on planning the perfect entry that traders tend to forget to develop a strategy for exiting a trade once it’s open. This is unfortunate as knowing when to exit a trade is vital for any trading plan, and is often what separates new traders from professionals in the Forex trading world. With this in mind, today we will examine how to effectively manage an open position using a trailing stop. First, it is important to know that a fixed trailing stop is an advanced entry order designed to move a stop forward a specificed amount of pips after a position has moved in your favor. Traditionaly fixed trailing stops are used in conjuncture with a trending market strategy, to lock in profits on an extended move. Today we will take a look at a sample trade on the EURJPY 8HR chart pictured below, to examine how a trailing stop may work in our favor. The chart below depicts our initial entry to sell the EURJPY at 103.27. To initially contain our risk there is a stop of 150 pips being placed at 104.77, with the fixed trail set to 150. Created with FXCM’s MarketscopeTrading Station. The Chart above also depicts what will occur if the EURJPY moves in our favor as planned. Since our trail is set to 150 this means that if our trade moves 150 pips in our favor our stop will update that same amount. In this example this means our first trail would update our stop to 103.27, effectively moving out position to break even. From here the trailing stop will continue to lock in profit every time the trade moves in our favor the selected amount. It is important to remember that the trailing stop by design is designated to close our trade.

At any point in time a trade may move against our position and close the position at the designated stopping point. If this occurs immediately in the example above our position would be closed for a 150 pip loss. However, when using the benefits of a trailing stop we can then continue to lock in profit as the trend moves in our favor. ---Written by Walker England, Trading Instructor. Follow me on Twitter @WEnglandFX. To Receive Walkers’ analysis directly via email, please SIGN UP HERE. Interested in learning more about Forex trading and strategy development? Signup for a series of free “Advanced Trading” guides, to help you get up to speed on a variety of trading topics. Register here to continue your Forex learning now! DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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E*TRADE Copyright Policy. What is a 'Stop-Loss Order' A stop-loss order is an order placed with a broker to sell a security when it reaches a certain price. Stop-loss orders are designed to limit an investor’s loss on a position in a security. Although most investors associate a stop-loss order with a long position, it can also protect a short position, in which case the security gets bought if it trades above a defined price. BREAKING DOWN 'Stop-Loss Order' A stop-loss order takes the emotion out of trading decisions and can be useful if a trader is on vacation or cannot watch his or her position. However, execution is not guaranteed, particularly in situations where trading in the stock halts or gaps down (or up) in price. A stop-loss order may also be referred to as a “stop order” or “stop-market order.” If an investor uses a stop-loss order for a long position, a market order to sell is triggered when the stock trades below a certain price; the order then gets filled at the next available price. This type of order works efficiently in an orderly market; however, if the market is falling quickly, investors may get a fill well below their stop-loss order price. For further reading, see: The Stop-Loss Order — Make Sure You Use It . Stop-Loss Order Example. If you own shares of ABC Inc., which is currently trading at $50, and want to hedge against a significant decline, you could enter a stop-loss order to sell your ABC holdings at $48. This type of stop-loss order is also called a sell-stop order. If ABC trades below $48, your stop-loss order is triggered and converts into a market order to sell ABC at the next available price. If the next price if $47.90, your ABC shares sell at $47.90. Stop-Loss Order Gapping. Suppose ABC closes at $48.50 and then reports weak quarterly earnings after the market close.

If the stock gaps lower and opens at $44.90 the next day, your stop-loss order would be automatically triggered and your shares sell at the next available price, say $45. In this case, your stop-loss order did not execute as expected, and as a result your loss on ABC is 10% rather than the 4% you had expected when you placed the stop-loss order. Price gapping is a major drawback of stop-loss orders and a reason why many experienced investors use stop-limit orders instead of stop-market orders. Stop-limit orders seek to sell the stock at a specified limit price, rather than the market price, once a specified price level gets breached. Although stop-limit orders do not offer investors a perfect solution, they do reduce the risk of a long position selling at a price that is significantly below a stop-market order. Price gapping is reduced in markets that trade 24 hours per day, such as forex and cryptocurrency. Investors still need to be aware that prices can gap below or above stop-loss orders due to adverse macro news or times of low liquidity. For example, the price of bitcoin could gap lower if regulators announce a new tax for goods and services that are purchased using the cryptocurrency. (Want to invest in bitcoin, but don’t know where to start? For more, see: Basics for Buying and Investing in Bitcoin .) Got Questions or Feedback? Trading and learning how to trade can be overwhelming, especially with so many free resources available online. My goal at Tipu Trading is to create beautiful tools that help you in simplifying trading.

I also strive to show you that anyone can win at trading if they practice the rules consistently and correctly. The concepts covered in this article apply to forex but they can equally be applied to CFD and futures. Step 1 Understanding Basics. The first step in trading is understanding the significant events that move the markets. If are trading in the forex market, these can be economic events or news affecting the health of a country (and its currency). If you are trading in the stock market, these events are the quarterly earnings releases. There can also be other numbers of reasons causing a sudden change in price. For example, change in economics, change in political factors, and natural disasters. “Fundamental analysis” is the detailed examination of “why” the instrument price moves, and “technical analysis” is the detailed examination of “how” the instrument price moves. Fundamental analysts spend more focus on the news, and technical analysts spend more focus on the charts. You should combine both of these analyses together to have an edge in trading.

“We should limit our trading activity before a significant news event. This is important to reduce our risk and prevent huge losses.” The next basic concept is learning the types of markets. There are two types of markets, trending markets and sideways (or ranging) markets. An uptrend market (price going up) is called Bullish. A downtrend market (price is going down) is called Bearish. A market that neither goes up or down is called Sideways market or Ranging market. “We should tailor our trading strategies according to the types of markets. A trading strategy used for trending market (bearishbullish) may not work for sideways or ranging markets.” c. Types of Traders = How much time do you have? The trading strategy you develop depends on how much time you are willing to spend on your computer in trading.

If you are a day trader (opening and closing trade on the same trading day, i. e. trade life 1 day or less), you may trade on 15 minutes (M15), and 1 hour (H1). If you are a swing trader (trade life 1-5 days), you may trade on H1 to H4. If you are a position trader (trade life a few days to months until condition changes), you may trade on H4, D1, and W1. d. Multiple time frame analysis. This is one of the most important aspects of technical analysis. When an instrument reverses its trend it first does that on a lower time-frame and then continues its trend reversal on the higher time frame. For example, when a candle reversed its trend on D1 it first does that on the M1 timeframe, then on M5 and continues through until there is a trend reversal on D1. If you are a swing trader, you may use D1 for longer trend, H4 for intermediate trend, and M15H1 for fine tuning your trade signals. A simple trend trading strategy is using the signals from the lower time frame and trading in the direction of higher time frame. For example, assuming you are trading on the H1 candle, you will enter a buy trade only if you H1 is a buy and D1 trend is upward. In the trend trading strategy, a wider stop loss should be used to allow for the trend to develop, and you stay in the trend as long as the trend continues. A simple counter-trend trading strategy is trading on a lower time frame in the direction opposite to the higher time frame. So you would trade sell signals on H1 candles only if D1 trend is up. In this strategy, a tighter stop loss and target profit should be used so you are not caught on the other side of the trade.

If you get lucky you may also get in at the beginning of the trend (since trend first reverses on a lower time frame and continue the pattern on higher timeframe). “You should first define what type trader you want to be (day trader, position trader, swing trader), and then apply multiple time frames accordingly.” e. Support and Resistance. Supports and resistance are price levels that an instrument reaches many times but does not cross. Supports are “floors” that an instrument reaches but takes time to fall below, and resistances are “ceilings” that an instrument reaches but takes time to go above. The following are the different type of Support and Resistance. Ranges – an instrument tends to moves within a certain range in a given time frame. An average of EURUSD is about 100 pips (from high to low) on D1. If an EURUSD moves 100 pips in in London session, the chances are it will either hover around its highlow or somewhere in the middle. In this case, the highlow will act as support and resistance. Some of the commonly used indicators to plot this type of supportresistance are Pivot Points, Average True Range, and Parabolic SAR. Horizontal line supportresistance - these are psychological levels that an instrument tests and does not cross. You can visually see and plot these lines on the chart. Trendline supportresistance – these are peaks and valleys on the chart. In an upward trend the support lines the drawn as connecting valleys, and in a downtrend, the resistance lines are drawn connecting the peaks.

Fibonacci lines – “Fibonacci Retracements are ratios used to identify potential reversal levels. These ratios are found in the Fibonacci sequence. The most popular Fibonacci Retracements are 61.8% and 38.2%. Note that 38.2% is often rounded to 38% and 61.8 is rounded to 62%. “ “Support and Resistance are important as they help us define turning points. We should combine supportresistance with fundamental analysis and technical indicators to fully understand the price movements.” Here is a brief summary of this section. You should pay attention to the following before building a trading strategy. When did e-trade stop trading forex. My friend Peter just blew his account. After spending $15,000 on Forex courses, $10,000 on coaching, and losing $5,000 to a scam broker (InvesttechFX) – he was ready to call it quits. After all of that, he decided to give it one last try. He bought an Expert Advisor (EA, also known as a trading robot). After 6 months, boom… his trading account was gone – again . “I am just stupid! Bloody stupid.” he told me. However, Peter didn’t understand that it wasn’t his fault .

He wasn’t “stupid”. He was being harsh on himself. It wasn’t his fault for believing marketers and people with their “track records”, MyFXBook results, and hundreds of testimonials. It is hard to resist. Upon closer inspection though, it was obvious to me that this would never have worked. Do you really think Warren Buffet relies on MyFXBook or a MetaTrader 4 account to make his buying decisions? Do you think that anybody in the City of London or Wall Street make trading decisions based on that? I do have an unfair advantage though. I spent 23 years on Wall Street trading wealthy client accounts. The last 13 years have been spent trading for myself. During that time I have seen a number of miracles happen. One of my biggest wins early in my trading career was a trade in 1982.

I started with a paltry $8,000 to my name and I used it to buy silver on the futures exchanges. As it turns out my analysis was spot on, and I ended up running my $8,000 account to a little over $280,000 in only 30 days. Since that time I have modified my trading strategy – slightly . After 120,000 trades, 1,200 trading accounts, and 8 Wall Street Firms – I am going to give you an exact guide to walking away with 4 additional winning trades per month and avoid losing your shirt – like Peter did (I’ll tell you what happened to him in a minute). Before you read this article you must agree to the following statements: There’s no magic pill. The markets are full of sharks and they will eat you alive. You need to stick to simple and sensible rules. The Forex systems and robots churned out by internet marketer’s are laughable. – especially if you think that’s how they make money on Wall Street. And trust me, they DO make tons of money.

Forget about making 20% per month. That’s how poor people think. I’ll let you know exactly how much you can actually make later in this article. Now, if you agree with all of those statements then I salute you. If you disagree with any of them, then close this page right now. Still here? Good… You are part of a small group of people who can separate reality from outright dreams and lies. And for that reason you will understand the words in this article better than anyone. I don’t have time for ‘internet traders’, the ‘Forex forums’, or any other breeding ground for newbies who pretend they really know how the markets work – and neither should you. This article is going to be simple. I am going to show you how to get 4 – yes, just 4 – additional winning trades every month. Don’t be fooled by the goofy EA developers and internet marketers out there. Having 4 profitable trades per month is more than enough to push you into the big boys club. You can make more, but my aim is to get you started with something consistent. Once you’ve got that mastered you can increase your output. Why you won’t make a dime from the information contained in this article.

Most people reading this won’t make a single dollar. Not because the content sucks – I believe it is some of the best trading tips in the world. It is because people are lazy and don’t implement what they learn. It is because people lose their shit and take too much risk. And it is because you might not be able to handle my style. My past results really are no indication of you making any money whatsoever. You might simply not have what it takes. However, there are a small percentage of people who do. And by following the rules you might be one of them. There are no guarantees. So read carefully and make sure you examine every word on this page as if your life depends on it. Because it might just change it forever – if you have what it takes. #1. The last opportunity for major profits in the Forex market. Have you ever been stopped out of the trade, just for it to change direction immediately? Do you ever feel like every decision you make is the wrong one? There is this big lie out there that hundreds of thousands of Forex traders believe.

And you may have believed this too at one point. “The Forex market is the most liquid market in the world and therefore it cannot be manipulated “. That is plain wrong. Governments have been cracking down on big banks because of their manipulation of a whole host of markets. Check out this article on the BBC: Have a look at this chart they supplied: Have you ever been knocked out of a trade that just seemed totally random? Well, chances are somebody rigged it. And chances are… you didn’t confirm your trade with a “2-pattern overlay”. More on that in a little bit. You and I are small fish who are competing with much MUCH bigger sharks. Sharks who know the waters better than you do. I used to swim with them. Merrill Lynch was only one of 8 companies I worked for on Wall Street. They did NOT take prisoners. There are entire teams who’s job it is to cheat the system. And those are some of the brightest minds in the world from the best universities in the world. You have to accept that you cannot beat them. That’s why, what I’m about to reveal, is the very last opportunity to profit in the Forex markets.

Forget scraping a few pips off the charts. Forget taking daily pivot trades, or “snipers”, or FAPTurbos, or whatever else these idiots are selling these days. You have to stick to simple daily trades that unfold over a period of days, weeks, and sometimes months. By riding the wave on a boat, you’ll be safe from the sharks on Wall Street. #2. How to dominate a currency with profitable trades. That’s a lie. You can never ‘dominate’ a market. That kind of thinking will get your account murdered. However, you can put the odds severely in your favor by doing one thing. You can use a simple “2-pattern overlay” before entering a trade. I’ve been using this since the 80s and it still works better than anything. One million dollar client at EF Hutton & Co (another Wall Street company) dubbed me the “2-pattern wizard”. Every time I used it he knew he was about to make enough cash to buy another house.

All you do is look for a minimum of two chart patterns to “confirm the trade”. Now, that doesn’t mean you confirm an entry. You simply confirm that you potentially want to take a trade. Here’s an example from one of my trades: I saw a triple “core support bounce”, and then a simple overhead resistance. (If you don’t know how to spot price patterns then don’t worry… I’ll get to that). DON’T jump into the trade just yet – it isn’t that easy. You still have to know when to enter. I use a very specific ‘trigger’ that usually means the market is coiled like a spring, ready to burst in the right direction. Keep reading and you’ll learn all about it. #3. Use this simple trigger. Most newbies would simply jump into the trade because they saw a “double bottom” or some other pattern. You and I know better.

You have to wait for the market to form a coil. There are several different types of market “coils”, however the one I’m about to reveal is the easiest to spot and tends to give me better results. It is called an “inside day bar”. So, looking at the daily chart I would wait for this bar to form. Here’s a real live example from a trade I took a while ago: Two inside day bars were the beginning of a nice coil. Here’s another example: #4. Have a tight stop loss and await the coming burst in movement. Remember that silver trade I told you about in the 1980s? It was my first big win. Even though I turned $8k into $280k the risk was minimal. I did that by scaling into a rocketing market. Despite what people say… NEVER do that. Not until you understand the true risks involved. It can take a heavy psychological impact on you. I once saw a guy at Commodities Corp (now a division of Goldman Sachs) throw his computer across the room because he leveraged his position by scaling in too much. Theres no need to do it. Simply stick with what I am about to reveal and you could walk away with a handful of winning trades each month. Keep the initial stop loss tight, and then keep it loose…

The initial stop loss is very tight. I anchor it close to the previous bar. If you’ve established the correct price action and trigger bar, you should see it shoot off in the right direction. Only 1 out of 2 trades tends to linger around. If they turn, then it means the trade is a dud and your stop loss will kick you out quickly. However, when it goes… it goes. Here’s an example of a good trade I took. I made a fat 5.2% in about one week. This example shows how it immediately jumped in my favor. That means I spotted a good coil.

By the way… those are actual trades. My trading platform marks them with those little circled arrows. Here’s another example: EURGBP immediately jumped after a trigger coil for a 2.5% gain in just one day. I don’t usually exit trades in the same day, however, 2.5% is a lot of money in my world. You don’t often see 2.5% days. If everyday was like that my account would grow by a billion every month. So when it happens… I take it. #5. Exiting the trade for a fat profit. This is how you get 4 additional winning trades. If you get the coil right. Your trade should shoot out of the block like Usain Bolt. This allows you to have a tight stop loss.

It puts you in a great position to make huge gains with a tiny risk. If your stop loss was far away from your initial entry then your risk would be greater and you’ll have to reduce your position size. Therefore, I would recommend a hard and fast 3:1 risk reward ratio. If your stop loss is 35 pips away, your profit target will be 105 pips (three times the stop loss). Now, admittedly I use a way more complicated process for my exits. I could write an entire book on it. However, when I looked back at my last 300 trades, I noticed that if I used THIS exit strategy I would still have made a great return. It is simple and it takes psychology out of the equation. I learned this while working at Bridgewater Associates (they manage about $170 billion) from a funny looking Irishman. Back in 20112012 I forgot this rule and I duly got slaughtered. There is a story inside of the book ‘Marketing Wizzards’. It talks about a great trader who locks himself in a room with no distractions.

No windows. No TV. No Computer. He has his assistant bring him his chart-book without the instruments named. So he doesn’t know if he’s trading pork bellies or gold. He doesn’t care. All he cares about is the price and the fact that he has no distractions. It means he ‘never loses’. My rule gives me the same sort of piece of mind. Before I let you in on it you must know what I mean by ‘never’ lose. When you lose a trade – you aren’t ‘losing’ . It is simply part of the process. It is the equivalent of a business expense. You will always lose trades.

However, when you lose your mind and you don’t follow your own rules. That’s when you truly lose. So here are the exact rules you need to follow to NEVER lose, always stick to your rules, and always win in the long run. Do not share your trading results. I did once. And only once. It was a huge mistake. All of the sudden I was answerable to thousands of people who happen to stumble across my profile. This doesn’t work when you are a trader. I lost focus. I kept fussing about whether a trade was a winner or a loser. I didn’t focus on whether it followed the rules or not. As long as you follow the rules…

you are winning. When you don’t follow the rules – you are losing (even when you make a profit). Systems and routines are the only thing that make you profitable in the long run. It is the only thing that’ll protect you against the sharks. So whatever you do – don’t share you trading results. Not even with your husband or wife. It’ll put external pressures on you. Don’t even mention a winning trade or a losing trade. Simply tell them you’re winning because you followed the rules. #7. How to make $1m from trading. Do you want to know the real secret? The one that most people ignore, because they don’t really take their trading seriously? Well, it is a system of recording and documenting your trades in detail. I call it a trade journal. Super original right?

Every single time I am about to take a trade, I stop. I take a snapshot of the chart, I write out my analysis (the reason WHY), and then I enter the order. 90% of my orders are pending orders, which means they only enter when the market reaches a specific price. This is an example of three pages inside of my journal. By doing this with your trading you’ll be able to get a lot more focussed. When you look at the markets you will feel excited. You will get a rush of adrenaline. Stop. Take a deep breath and start recording the trade before it happens. It gives you the breathing room you need to make rational decisions.

It helps you to be a winner every time by following the rules. Seriously. Get my journal. It’ll show you how you should structure yours for maximum results. You’ll also get a better feel for the way I trade. #8. Past trading results on MyFXBook will drain your trading account. This is the biggest difference between the Wall Street traders and normal folk. On Wall Street – we know that past results don’t mean anything. They really are no indication of future performance.

Even if the results are third party verified. Think about it. How many times have you bought a system or a program based on their past results? And… how many times has it worked out? Now you have two choices. I should congratulate you. You’ve read the entire article. However, this is just the start. You now face two choices. Choice #1. Forget what I told you and keep doing what everybody else is doing. It is easier to follow the herd after all. Some of the things I talked about aren’t easy. Some of them are plain boring. Yet this is what it takes. And I think you know that, which is why you’ll probably go for… Choice #2. This is the choice smart Forex traders go for. You grit your teeth and follow the rules. So that you can finally break away from the ‘internet herd’ and actually start taking pride in being a trader. Don’t fall into the same trap as Peter.

Be the person that “actually makes money”. How nice would that feel for a change? I’ll help you out by giving you my 21 Power Strategies without asking you for a dime. Just let me know which email address I should send it.


  • When did e-trade stop trading forex