Episode 6 – Avoiding Beginner Trader Mistakes with David Jones
Tom continues his profitable trading, bringing his two week profit to 36 pips. Not a huge amount but to be profitable in his first two weeks at all is pleasing. The less said about Owen’s trading week the better… Although avoiding outrageous losses, a couple of borderline never-should-have-taken-them trades have properly messed things up for him this week.
Tom is continuing his tactic of scalping small 15-20 pip profits on the 15 minute charts with a 1:1 risk ratio. Owen has been trying to jump on day long trends using Bollinger Bands to enter, but lacks obvious exit signals and needs to tweak things next week.
With Brexit volatility settling down we should be able to get back to the main currency pairs without too much fear that some politician or other will trash our profits with an ill-timed announcement (how inconsiderate of them…)
Owen will be looking to introduce some more fundamental analysis to back up longer term trend trading. He’ll be trying to get his Risk:Reward ratios up to 1:3 to improve his chances of profitability.
Tom will continue to scalp but will avoid the oversize losing trades that he suffered this week by aiming to have all trades risk the same amount in cash terms by adjusting his £ per pip amounts.
David Jones (@jonesthemarkets) lately of IG Index and CMC Markets has provided some great insight into avoiding common mistakes as a beginner trader. He talks about Risk:Reward ratios, expecting too much and keeping trade size small.
David’s book ‘Spread Betting the Forex Markets’ has been mentioned previously as it is a great introduction.