(Please note - this is my chosen methods and what I’ve done and works for me – its not what you have to do! Everyone is different and will approach the same topic differently.)
(note: complimentary blog post on this topic is How to use margin % as a guide and tool.)
Automation trading is great, but we will still need to take an active role in understanding what are accounts are doing so we can make our money work harder for us. However, this does not have to be hard and requires a few educated tools to have at your disposal to know what to do when you need to do something.
So, to help show these steps lets make up a scenario. The scenario is that your MT4 says the following (this is an example)
Understand your Margin Level % and know your drawdown
So you wake up in the morning and you see these figure. How do you interpret them? Your first key figures to check are:
What do these numbers tell me?
Well first they help me get clear on the health of my account. The Drawdown tells me that if I closed all the trades right now, that would be our loss, 1478. It also tells us how much active money is being traded in our account. The Margin Level % tell us about how much capital we have left for trading. The higher this number the great capital is available. It’s worked out by dividing Equity by Margin. (1774 / 186 x 100).
So 968% suggests we have a good amount of capital available to set further trades if we need too. With a comfortable 968%, I’d be watching my trades now, and just keeping an eye open on what is going on but not taking any action.
Know when you need to start considering your options
So, let’s say the drawdown deepens and my margin level % falls to 700% and there isn’t a clear direction where the market is going. I’d start to feel like I just need to pay more attention to this now and start to feel like I need to think about my options.
This can vary from person to person. In the beginning I started to consider my options closer to 1000% but with education and a stronger mindset to trading, I’m comfortable at getting to 500% before I consider my options. This part is up to you! What we are doing at this point, is getting ready for taking action on our automation account (if we need too). Ideally, we want the automation to take care of itself but it’s important to stay on top of its activity.
Its also that this point that many start to question the intent of the automation and the professional traders and it’s a natural emotional progression because we see activity going one way and we seemingly are going the other but we aren’t the professionals, we don’t see what they see.
Know what options you have to choose from
So, our margin Level % is falling. Our balance is also falling – things look concerning!! You are not sure what the outcome is going to be, and you certainly don’t what a margin call on your hands. So what options are open to you.
a) You can add more capital. A quick and simple activity to help raise your margin level % and give you more space. To protect your account raising your margin level % is a good option for you.
b) You can close a trade. I’ve done this move because I didn’t want to add more capital and chose to take a loss on an old trade which I knew would take ages to get back too. Doing this raised my margin level % and helped my account. Which trade to close depends on several factors but when I was deciding I was prepared to sacrifice old trades so I looked at them and you could take out a higher LOT size trade with a small loss and help release more margin level %. Higher LOT sizes hold more margin so another useful option when considering closing trades. You can close more than one trade if you want. Its just takes some decision making on your side.
c) Reduce your overall risk by reducing your LOT size. This is also an easy adjustment to make but its one I tend not to choose but I share it as an option. You see with automated trading the likelihood of going into a grid strategy is higher, so we use the larger LOT sizes to help us cover any loss of small lot size trades. When you see it in action, its pretty cool! Large lot sizes are a short-term goal to help accumulate profit to cover loss of other trades and to at least break even or close in a profit. I’ve seen a number of grid strategies come into play and I’ve always broken even or come out with a profit. It feels like a cleanse when you see a load of trades close on your account! You are then excited for the next chapter of trading.
d) If you have another trading account – transfer additional money (in the short term) from it if the margin level % on that account is healthy and comfortably over 1000% and you are not seeing any heavy market changes in the short term. I have moved money between accounts when margin on one account was low. Its quick and the transfer is immediate. You can always put it back once the margin level % releases back to a healthy level again
Decide which is right for you.
My commentary above are just options. You can do whatever you feel is right for you, but these are options that have worked nicely for me and helped me deal with the couple of moments of automated trading where you need to take a bit more interest in your account and be prepared. I’ve used 3 of these options. I hope to discover more as I get better at this. Ultimately it helps the ‘emotional’ part of your trading journey.
(The commentary I write is not financial advice, it is meant to help others with their self knowledge and growth).
The big thing in forex trading is the over arching umbrella word ‘scam’. It’s got this really ugly cloak to those that haven’t explored or educated themselves on the topic. That cloak is full of dodgy information, bad publicity, dubious characters and potentially money being lost. So, when I share with people that I ‘trade’, 80% of the time there’s an immediate negativity around it, all shaped by the stories heard and seen. Clearly showing that trading though well intentioned is very much a misunderstood industry by many.
My own story.
I’ve always wanted to trade currency. Some of the movies I watched as a kid influenced the, ‘wall street, suited up, fast pace’ feeling. In recent years I’ve loved movies like, ‘The Wolf of Wall street’, ‘The big short’, ‘Inside Job’, ‘Wall street’. It’s the buzz and excitement around watching currencies and stocks be influenced by the sentiment of the people and the political activities that take place to make this happen. It was always something I have loved but never thought I would be able to do. Stories of losing thousands, scams, taking years to get educated and not feeling good enough to do it all ate into the stories of never getting into trading. Until 2019.
On the whole, when I've mentioned it to friends, family or acquaintances, it creates a strange energy of ‘hmms….not sure now of what you do!’ sounds dodgy!! And to the untrained, yes it can be. "Be careful Nick, it’s a scam" "careful you don’t get scammed", and "Its all illegal". So, my goal here is to just pull off that cloak on this topic and just help people open the door to a rather good way of making your money work harder for you. Trading isn’t discriminatory in anyway. If you get educated and learn some strategies and keep to your trading plan with key rules you can make it work for you. But its first getting past the first hurdle.
The Financial Conduct Authority
This is an important financial body in the world of trading. All brokers (I’ll come back to this term) are required to be registered with them to allow trading to take place lawfully. You can review their website and see the stringent terms and conditions brokers need to follow. You can also check up on brokers and those who have been called into question by the FCA. It was my go-to place when I was checking the broker I use. This is part of your education and really is a foundational subject to review.
All brokers are required to be registered with the FCA regulatory authority in the country they operate. All brokers provide legal documentation which covers your rights as a user and the terms in which you are signing up too. Its important you know this and read them. When you open an account with a broker, they will request you to identify yourself through supporting paperwork. They just want to check you are real and verify you. This is another important step when considering the trading services you will use. The broker is like your bank but for forex trading. They have access to the forex markets and they do the hard work of connecting you to it so you can trade different currencies. Most brokers are free to sign up to and they make their money via the trading activity you conduct. For example, commissions and swaps on trades taking place. They make money in other places too and you can read about it through the terms and conditions. Again, another important step in getting educated on forex trading. Brokers also provide resources, training and FAQ’s to help you with your trading. Use them – they are there to support you.
Algorithmic Trading/ Expert Advisors
This is the technology part of trading. Using technology to help you trade. Algorithmic trading/ Expert Advisors are trading robots – created by trading professionals to take the guess work out of trading and help enter trades based on a set of pre-set criteria. Algorithmic Trading isn’t new. Its been around for a number of decades and they are getting better. Technology is helping retail traders (like me) help get a step into the trading zone, start trading, earn some profit and learn on the go too. ‘Set and forget’ is another common phrase around algorithmic trading because the technology is doing the hard work that someone has programmed it to do. The key benefit of using technology with trading is that you don’t have to be watching the currency movements all the time, its done for you and it takes away the emotional part of trading. This I talk about a little bit further down. But your trading mindset is probably 70% of whole trading strategy. Like life, if you are too emotionally involved – you may not always make the right decisions. Algorithmic trading has a lot more advantages and is used heavily by banks and financial institutions too. We embrace technology everywhere in our life. Using technology in trading makes sense too.
I’ve been trading since January 2020 using an algorithmic service and its been the right decision for me. It has allowed me to work my capital properly and make a profit, its allowed me to learn more about trading while its going on around me and its disconnected the emotional part of my trading.
A great place to check up on algorithmic systems is the website called myfxbooks.com. Its basically a place where traders, systems and the results of their trading can be shared for all to see. Another great way to review a potential algorithm service you are going to use.
So where is the scam Nick if we have all this regulation?
The scam happens where people write tag lines saying, “I can turn US$200 into US$5000 in 7 days.” You’ve more than likely seen them. Scammers feed on the uneducated viewpoint. They feed on that emotional feeling of earning so much money in a short period of time. If you look up ‘forex trading groups’ on Facebook you will see so many promises of a ton of my money in a short period of time. It’s made to sound easy, achievable and accessible. Let’s be clear. Its accessible but achievable and easy are the to elements that need an upgrade quickly. Its never easy. You can have good trading months and bad ones but over a year if it averages out then it’s a good thing and seems easy. Achievable also yes. But your view on trading is important part of this story. If you think in 3 or 6months you will be a millionaire then you are mistaken. Trading needs patience, time, consistency and a plan. If you can’t hold those then its best you don’t get involved in trading. Be on the look out for them, but don’t’ dismiss the good ones. Do your homework, educated and start discovering.
When I was younger I couldn’t wait until I could drive. The offer of freedom, going where I wanted to go, playing the music I wanted in the car and hanging with my friends was simply great. But when I was dreaming about those days I did not think about the risks, learning to drive, insurance, fuel costs. Those were just back thoughts. But when the opportunity to drive came around I was so excited, so enthusiastic. I remember my first lesson, and would you believe, I’ve seen my mum and dad drive a manual for so long that when it was my turn to actually do it, I messed it up!!! I was so embarrassed. That was my first fail at driving. Then as driving lessons continued my confidence plummeted, I thought I’d never get it. The risks on the road, changing lanes, indicating at the right item, being mindful of other cars – OMG.. all of that was front and centre and at times I cried, felt overwhelmed, worried that I ‘d never be able to drive and be stuck in a taxi for life!! There’s mindset again!! All that played into my driving. You will be pleased to read that I passed my driving test first time, so I was really proud. Getting your license is such a badge to independence. Now I had to think about risks, I was still a learner really, insurance, fuel – the baggage that comes with the responsibility of driving is large. But as the years progress, we don’t think about it. Its something we do and get on with! With that long story – what I’m trying to say is that trading too comes with risk, learning to trade, capital concerns, worry of getting it wrong but in the long term as we get better at trading, learn from our mistakes we too can be better traders. It does not happen overnight. I am only 18 months into this journey and I’m still learning. I have a learner’s mindset always. My patience is better and I’m more comfortable now letting the market do its thing and I keep a reactive mindset. The moral of this paragraph is get educated. See what the trading world is like. Research it, do your due diligence and explore it.
I do make money while I sleep. Not a lot right (yet) but I’m in this for the long term. As I said above trading is a long-term activity that needs patience and consistency. My personal mission is to build this income stream and in the coming years see this as an income stream that covers our bills and expenses and helps us just enjoy life a little bit and take the pressure of the corporate rally we are in! If this is something you want to do, then get educated. See what your options are and plan! Then go for it!
Forex trading is a possibility for you, just get educated!
I'll continue to write on the subject of 'get educated' as part of my mission to help people see trading as a potential option for them! The commentary I write is not financial advice, it is meant to help others with their self knowledge and growth.
This week's results. 30th November - 4th December 2020
So, if you don’t read this whole post then just read the next sentence and let it spend some time in your head, relaxing!
“This first year of automated forex trading WAS very worth it. For those looking long term, it pays to broaden your horizons and investigate more ways to build your financial freedom. This tool is worth your time to explore! Ask your me or your IX Global connection about it!’
You may be thinking, it’s not the end of the year quite yet but I know that minimal trading will take place during December partly because of Christmas but also partly because of trading volatility. IX Global is managing our risk! So, I thought I share my top 6 learnings from my first year of trading and I hope through these learnings you can take them on board and apply them when you decide to join the automation.
Any first year of anything new has its ups and downs but overall, I have thoroughly enjoyed learning more about forex trading. I’ve not only gained more insight into understanding it more, but I’ve also made a number of great new friends, my mindset has a healthier relationship with money, I’ve watched other IX Global journeys explode this year and many of them are on their way to a new kind of financial freedom they thought they would never see. I hope to get some of them on my video show ‘My forex stories’ in 2021. To hear their stories. Maybe you could be a future guest??
1. Become emotionally detached from the screen
I think this is more about 80% mindset and 20% automated trading. In the beginning, I was an emotional trader. I looked at the trades all the time. When I would look at my MT4 and see a drawdown of 10% or more, I’d start to think that I was about to lose my money. I was in a weaker position because I didn’t know what I was looking at and having faith in something you had not done before was hard. But I learned quickly I had to ‘let go’ of what I was looking at. Become emotionally detached from the screen and just see the screen as ‘a game in play’ and I just had to watch and let the small wins come in. All the longer-term IX customers now have a very cool relationship with the trading and just let it happen. We encourage new customers to just relax and let it go but we also know that this takes time and patience to get into that mindset. Long term it will serve you better to detach from the trading and only look at your MT4 maybe occasionally or at the end of the month to see your monthly growth!
2. Learn the basics for what you are looking at on the screen
Do take the time to understand what you are looking at on the MT4 screen. Learn the basics of forex trading and understand the strategies used by Ix Global. It just helps your mind, how you share with others, and understand what is happening. You don’t need to do a lot of research just know some key details. Understand what drawdown is, understand compound interest, get clear in your head why you are doing this and refer to it often. Use the IX Academy platform for this. They have created a learnings section for you so you can understand what you are looking at.
3. Trust the system and the trader
Some of the key reasons for using automated forex trading services is so that we can grow our money without changing our lifestyles. Another is we don’t need to spend the time analyzing charts or reading macro-economic news. We have busy lives to get on with but we want to build a better financial pot. We all pay a monthly fee for the experience of the trader and their professional direction. We’ve also seen the historical information about how the automation services have been doing. So, in doing this we have to have some trust that the trader is always doing their best and the algorithm is a very good one. Ix Global is striving to be a great platform.
4. You can learn and earn
I guess this is repeating some of the key learnings above, but I love to tell people you can ‘learn and earn’. Evidence and research on new forex traders are that most lose all their capital very quickly and then walk away thinking that it doesn’t work and it just a waste of money. This is where automated forex trading has a niche because you can ‘learn and earn’ this way. You can utilize your capital investment better and see your money grow consistently and at the same time expand your knowledge of forex trading in a more relaxed way.
5. Know your risk tolerance and your risk averseness
Automated forex trading is risky. We say often that historical results don’t guarantee future returns and understanding this is key to all of this. You must know your own ‘risk level’. How much are you prepared to risk and understand how you feel about all of this. It goes back to my other learning about ‘emotional detachment’ and risk is always a part of this. I started with a 2K account because I’m quite risk-averse but the learnings from this year, trust, and emotional detachment means that come 2021 I will start to raise my capital.
6. This long term, not short term
It’s important to think long term when you are using the automated trading service. Consider your percentage growth over the long term from a bigger picture perspective. On a daily and weekly basis, trading can be up and down but when you look at it from the ‘bigger picture’ perspective you see a different outcome and see how your consistent efforts have over the long term been positive. One month isn’t a great barometer of your trading. Commit to it for at least 6 months to give yourself the better chance at succeeding at this. It's probably the safest way to trade too because you can ignore the daily/ weekly changes and just focus on the monthly and yearly outcomes. When you can do that you are well placed to be doing this for the long term!
There are so many learnings this year it was hard to really decide which ones would be most relevant, but I think the ones above reflect the early day thoughts and feelings we have when we start automated trading. Know, like, and trust ring true through these learnings too! Ask questions, do your research, and speak to your Ix global friend and learn from their experiences too. You really do need to make room for new knowledge if you want to change, grow, and want different results.
I’m so excited for 2021 and what it will bring. I hope you will consider joining us and being part of this opportunity. Bring with you lots of positivity, an open-minded attitude and a real desire for change, and lots of curiosity and you are already 50% of the way there.
I’ll see you in the IX global family.
These are my own results. Returns are not guaranteed and any capital is at your own risk.
You may look at the screenshot below and worry but these are my live and active trades at present. They need to happen to make profit. They are in play and haven't met their Take Profit targets yet!
Forex trading is the buying and selling of foreign currency for profit. You will have experienced it when you are travelling and a currency will be weaker or stronger against another currency.
The primary players in the forex markets are the banks, large commercial corporations, hedge funds, large investment houses and a small portion are the retail traders - which is what I am. The market is really driven by the bigger players.
The currency prices move up and down daily and this is called a trend. A forex trader will follow the trends of a currency and set trades in play to profit from the rise and fall of the currency. Trends are caused by macro and micro economics and a level of people sentiment too.
The forex market trades about US$5 trillion a day and is one of the biggest industries out there. The general public don't really pay attention to the value and size of this market.
All retailer traders will have a brokerage account - which is like your bank account. You will deposit funds for the purpose of trading. Retailers also connect their brokerage account to a platform called Metatrader 4 which is an online global trading platform which shares all the currency pairs out there that are being traded.
There are a set of major pairs which primarily are currency pairs like EURUSD, USD/JPY, GBP/USD, and USD/CHF. These are the major players and most retail traders will have one or all these pairs in their trading portfolio.
Trading isn't a skill we can learn quickly it takes years to be a good trader. It takes a lot of testing of strategies, testing of your own mindset and testing of your ideas. The facts state that 90% of new traders will lose all their investment within the first 90 days of doing trading by themselves. There is a lot of educational material out there to help with trading and a number of FB groups too. My personal route with this topic has been to do automated trading first so that I could learn and earn as I go and not waste my investment.
Automated trading is using artificial intelligence and professional traders to set trades on your behalf. AI is used now by about 80% of traders these days as it helps reduce the emotional side of trading and allowing investors to get into trades when they are not at their computer. AI with trading basically means the technology look for a set of trends and markers which help decide if the technology will set the trade or not.
The forex marketing is open 24 hours a day, 5 days a week and you can trade in any market through an FCA registered broker and the MT4 app.
Risk management and leverage are also key concepts to learn and consider when you start out trading as this will determine the potential profit and the potential loss. I always air on the side of lowering my risk management and ensuring I only trade about 1-3% of my capital in my trade at any one time.
A great place to verify traders and their technologies is a website called 'Myfxbook.com - it’s a great site for reviewing profits, drawdowns, history and trades in play for traders you are looking at. Its a space to analyze , get answers and ask more questions. The automated service I use has a link on here to review to help see the statistics of the trading tool.
Those are some salient points. If your son is keen to trade manually - have a look at www.babypips.com - there is some education there and some learning too which I use. If automated trading is something, he wants to start with so you can learn and earn then I can help with that too - as that is what my platform uses.
There are some points - I hope I’ve been able to make a few things clear. If you have any questions - just ask. Or if anything above is confusing, then let me know.
Trading is a good career to have but it does require a lot of learning, skill growth, commitment and time but if you get it right then it could be a good option.
I started this journey July 2019 and I wish I had started it so much earlier - its the one career choice that I do feel I have control over and feel I could achieve more money abundance even in this pandemic....but like all things we need to test, check, test, check....
Forex trading has one of largest market share in the world. It earns about $3 trillion every year worldwide. But Forex trading is mainly speculative, the profits and losses are based on the currency movement. The big turn-out in profits attracts a lot of investors. Even those who are still beginning in this field are interested in joining, to make it easier, there is an automated Forex trading system that could help them make the transition easier.
With an automated Forex trading system you would have a programmed system that could monitor the progress of the Forex trading real time. It utilizes an expert advisor and a set of indicators that interprets the Forex trade and can even show you an opportunity to trade.
What is good about utilizing an automated Forex trading system is the quick way of picking things up. If you are a newcomer in trading, this would minimize the lengthy process of learning the market and its rules. You do not have to stay glued with the Forex market 24 hours to understand the Forex trading market. The software would keep tabs on the trade 24 hours a day.
This would keep you abreast with what is happening real time. This would enable you to make changes to your account real time based on changes happening in the market. Major trading changes could happen in a matter of just a few seconds.
Aside from that, the automated Forex trading system gets rid of the emotional and psychological aspect of trading. There would be times when series of losses can affect your way of thinking and analyzing the market. This could result to bad and rash decisions in the market. But the automated Forex trading system and software would help you deal with it.
The software is also easy to use and simple to install. It can be allowed to run into autopilot. Configuring the software would only last for a few minutes and then it can be allowed to do its work and its magic. You can be successful in automated Forex trading especially, if you are using a system that is suitable for you and at the same time, you are familiar with.
This would also enable you to be flexible and have diverse Forex trade. The automated Forex trading system can work with different types of brokers and different types of currencies. You would be able to trade with different markets and currencies. You can trade while on travel.
But the automated Forex trading system is not perfect. If it is, then a lot of people would be winning the trade. Money management is still important. You have to know how much you are willing to risk. To be successful, most traders would always have a fixed percentage of their equity at risk. They could increase the size of their trade in winning or decrease if losing.
If you already have an automated Forex trading system, then it would be better not to make any changes on the settings or the configurations. Having an automated Forex trading system does not guarantee success. Nor, is it the only thing that you should rely on to be successful in trading.
There are some factors that could influence trade. Forex market changes very fast depending on different factors and situations.
Having an automated Forex trading system can give you an edge in Forex trading, but having a Forex strategy can give an upper hand. If you want to reap long term profits, then you just do not trade using your instinct or just because a particular trade excites you. You need a trading system or a strategy to make sure that you are getting solid trades and transactions.
A Forex strategy or system consists of rules that guide you on how to make trades in the Forex market. A Forex strategy or system provides information on when to enter a trade and how to exit the trade. It would also enable you to apply and use risk management rules.
There are ways to know if your Forex trading strategy is really successful or good.
• Start knowing how successful it has been in the past. It pays to know how much previous or existing users of the system have earned so far by using the strategy. Aside from that, also obtain some information on how much is the maximum drawdown of the system in its previous trading.
• There is a win-loss ratio which you can also check. It is about how much you have won compared with much you have lost. Aside from that, there is also a profit-loss ratio. This s about the average winning trade compared to the losing trade.
• You would also have to know how consistent the system is in delivering profits.
When choosing a Forex strategy, you do not only have to factor-in the success rate and profit percentage. You would also need to consider your lifestyle and what system can be used to fit or suit it. You would have to know what Forex trading system can be used appropriately in your time zone.
A useful strategy used in Forex trade is what is called leverage. With the leverage strategy, you would earn about a hundred times the amount of the money that you are trading in your account. A lot of traders have testified that they were able to win a lot of profit by using this kind of strategy. So if you have a funded Forex account, you can use this strategy to get more profits.
Another strategy is the stop-loss order. This strategy works by identifying a point where you will not trade. This trading point is identified and determined before the trading begins. When using this kind of strategy, you would have to be able to analyze trading signals so you would not be mistaken with your prediction. If your predicted trade did not go on as you expected, the stop loss system could be very disadvantageous.
The automated Forex trading is anther kind f system or strategy. Entering and exiting an order will be determined by your automated system. Again, the price and the point where the program would enter or exit a trade is predetermined.
These Forex trading strategies would help you have better trade opportunities in the Forex market. Whether you are using the leverage, stop loss or automated Forex trading system and strategies, 100 % success is not guaranteed. These strategies do not aim to give your perfect trades, because that is impossible. These trading strategies are here to help us minimize the risk of losing in the trade.
I serve people who want their money to work harder for them instead of it sitting in the bank.