The Forex a life changing opportunity for professional traders vs retail’ on Price Action Trading. In 2016, Nial won the Million Dollar Trader Competition. After you read today’s lesson, please leave me a comment!
Tell me if you learned anything in today’s article, and if so, how will you apply it to your own trading? Quick note: We are strictly referring to retail human-being high-frequency traders in this article, not proprietary commercial computer trading programs or algorithmic trading which sometimes results in thousands or tens of thousands of trades a day. It is just a fact of human nature that the more we stare at a price chart the more we get tempted to click our mouse button and enter a trade. The fact that we worked extremely hard for the money in our trading account seems to go right out the window after staring at a 5 minute chart for a while.
More trades equal more time and more stress. I personally believe in trading the daily chart with low frequency, meaning I take much fewer trades than most traders. When you trade less you can also risk a bit more per trade if you’re comfortable with it. 500 in one month that would be a 5R return.
In order to show that higher-frequency trading does not equate to higher overall profits, let’s look at a hypothetical example of a trader who over-traded on the 4hr charts during one month versus a trader who traded less-frequently on the daily chart for the same month. You can imagine that the trader who only entered 4 daily chart trades that month had far less emotion, frustration and stress, and far more time and ease of mind than the guy who entered 15 4hr chart trades and ended up with the same result. This is actually a relatively mild example, I know many traders who trade far more than 15 times in a month and lose money still, some of you are probably in that boat right now. So, as we can see from the example track record above, higher-frequency trading does not necessarily mean higher-profits.