Allow me to clarify things for totally new traders or people who have trouble becoming successful traders, because I feel they won't be able to apply all of this information here.
Before any of the information aggregated here can be useful to you, you must become a successful trader. Otherwise, the info presented here will only make it so much more easier for you to lose your money fast.
Because, really, you only need one successful trading strategy for the market conditions you find yourself in. A successful trading strategy can consist of as less as 2-3 indicators, really one never needs any more than that.
So this thread is very useful if you're hunting for indicators and trading ideas. But it assumes you're already a successful trader.
The core skill that makes one a successful trader can be divided in two parts:
- Learn to trade without fear
- Find an optimal risk management (in most cases it's 1% of portfolio)
Only then can you start building your trading strategy.
Trading without fearIn a nutshell (just goggle "trading without fear"), learning to trade without fear means to start perceiving trading on a statistical basis. Your goal is not to be right or wrong, your goal is to have a positive statistic over time - win more when you win, and lose small when you lose.
You may lose many times before a win, but your goal is to have a net positive gain when you do win, occasionally.So you must leave emotion behind, and just be a manager of this developing statistic over time.
The risk managementThis is the numbers part that actually gives shape to the statistic you want to achieve.
In most cases it's best to risk no more than 1% of your portfolio on every trade.
In most cases it's best to aim at trades that can promise you at least 3 to 1 returns. (your win is 3 times your
Stop Loss)
The calculation:If X is your total dry powder (stablecoins you can afford to lose), then it's
1%.X Stop Loss %
Let's say your portfolio is $1000.
1% of that is $10. (The minimum trade on Binance currently is a $10 order)
Let's say you want to trade Long BTC.
Let's say, that, according to you, Support is near, but you want to put a wider
Stop Loss in order not to get wicked-out. You want to put a 5% stop loss.
This means, you divide $10 (1% of your portfolio) by 5% (your Stop Loss). You get $200. You have to open a Long trade BTC with $200, with a 5% Stop Loss. This way you will lose 1% of your portfolio if market hits your Stop Loss.
Next TradeYour portfolio is now $990.
1% of it is $9.9
Your trading strategy gives you an entry signal, but you'll have to put a 3.5% Stop Loss.
Divide $9.9 by 3.5% to get ~$283. So, in order to risk only 1% of your portfolio on this trade, you need to get Long BTC with a bid of $283. If the market hits your Stop Loss, you will lose 1% of your portfolio.
If you go for trades with a win potential of at least 3 to 1, you can afford to lose 3 trades out of every 4, to be at net 0.
Your goal now is to find a trading strategy that is successful >50% of the time. A trading strategy that's successful at least 60% of the time will easily make you a successful trader, if you stick to risking 1% of your portfolio on every trade and aim at 3 to 1 returns.
You can always "let your trade run" if you are
dead certain an up-trend has begun. This happens during a bullmarket, don't hope for it happening in a bearmarket (we are currently in a bearmarket).
Of course, everything is the same for Short Trades. But new traders are almost never Short traders, 99% of new traders start as Long only traders (and should be extra careful in a bearmarket).
AND NOW, armed with this knowledge, you can start experimenting with PAPER MONEY ON TRADING VIEW to test if a trading strategy is >50% successful over a period of time. Use the info in this thread to find the indicators and tools you like the most and build or copy a strategy you heard about.
If your trading strategy is successful - if it is successful more than 60% of the time - you apply Trading without fear (statistical approach) every time when you have an entry signal, risking 1% of your portfolio on every trade. This will make you a successful trader.
Don't do that - don't trade like that, or try trading like that with a losing strategy - and you WILL lose your money eventually. (So remember that you have to change your trading strategy if the general market conditions change. Ranges are traded differently than trends, just use the guides provided by the OP in this thread.)
You're welcome
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Topic: GREAT ART OF A TRADER (Read 120833 times)
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