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Where to trade? – Finding a Broker

Singapore, home of many Brokers
Singapore, home of many Brokers

In this article, I will discuss Forex and CFD brokers. I will discuss how they operate and how to find one for successful trading. Many of the ideas that I share about these brokers will also apply to brokers of other securities like Bonds, Stocks, ETFs, and Options.

I am a big proponent of building your own infrastructure. However, as a retail trader, there is only so much you can do. It is not cost-effective to pay for direct access to an exchange and co-locating some trading servers right there at the exchange. That is not what this article is about. This article is about building a trading infrastructure that is flexible and independent enough to be able to execute trades through any broker you see fit.

I believe that you should not get locked into a platform in a way that will allow you to only trade with the broker that provides the platform. That is why I use spreadsheets, open-source programming frameworks/libraries (python) and freely available charting software to do my trading analysis. But first, let’s go into what it is you should look (out) for in a broker. Continue reading “Where to trade? – Finding a Broker”

Where to Put Your Stop Loss

Where to put your stop loss
Where to put your stop loss

So I talked about β€œWhat is R in Trading” and why it is so important to understand. I hope I made clear that R lets you focus on and manage Risks by always setting a stop-loss order to take you out of a position automatically if things turn against you. Now, after writing that I was thinking: Where would I place my stop loss? How do I do it? And can I explain how I usually place my stop-loss orders? Interested in knowing how I do it? I will give it a shot and do my best to explain it to you.

The most basic rule I use for placing a stop-loss order on my trades is this:

I want to be taken out of the trade automatically when the market shows me that my initial idea or reason for entering the trade, is no longer valid. Continue reading “Where to Put Your Stop Loss”

What is R in Trading?

Risk
Risk

And Why is R So Important to Understand?

R in Trading is an objective way to think about success or failure in a trade. R expresses the (possible) return on a trade as a multiple of the risk taken on by that trade.

In my trading log, I register the amount of R I make. Also in my trading videos and ideas, I always talk about targets, for example, as 2R or 3R. You may have wondered why I am doing that. Why don’t I just talk about pips, points, or dollars risked, won or lost on a trade?

To answer these questions in full, we need to dive more deeply into the concept of R in trading. We will look into Risks, Returns, Probabilities and how these relate. Let’s go! Continue reading “What is R in Trading?”