FOREX TRADING- The Basics Explained in Simple Terms ( PDFDrive.com )

chart trade and were using a 150 pip stop on a daily chart, your position size on the
daily chart is going to be a lot smaller.
And secondly, as you are more than likely trading several pairs at once, your
overall risk will be higher, especially if the pairs with open trades are highly
correlated like the EUR/USD and the USD/CHF. Again it is a risk issue, but more of
an overall risk. If you were to risk 2% on a long EUR trade and also 2% on a short
CHF trade, because of their very high correlation, your actual risk is more like 4%,
because if one goes wrong, then more than likely, so will the other. Just be aware of
your overall risk when you combine all your open trades. It may be a good idea to
look for the least correlated pairs to trade when several good signals appear on
your radar. A bit of common sense is required here.
Now you must keep in mind that you are trading off the daily charts, so you may
experience some huge moves against you, and a lot of traders may not be
comfortable being a couple of hundred pips or so down in a move against them. It
just doesn't sit well with them as it is playing with their mind. Remember some of
these majors move on average 100+ pips a day. You have to look at the big picture
though, because as soon as you nail the start of a good move, your profit can be in
the many hundreds or even thousand plus pips. These are the moves you want to
catch and trust me, there are plenty of them.
Trading several pairs may also help with an overall result (as long as you are not
wrong on every trade). You do have to look at the big picture and not just judge
your results on a daily or weekly basis. I would suggest you look to the month to
month results, as this will give you a much better overall indication of how your
daily chart trading is performing. You have to give it some time to prove itself one
way or the other.
Trading off the 4hr or Daily charts is a laid back way of trading and may suit the
trader that may have a normal day job or family duties that prevent them from
becoming a zombie and sitting at your computer for hours on end. The options are
fairly unlimited, and the trading forums will give you plenty of ideas if you are
having problems coming up with your own system or method. You have to find
something that works for you, and something that you are comfortable with. Not all
trading systems are the same, nor are all traders the same.
Keeping a Journal or Diary
Before I get into the actual trading side of things, one thing I do want to mention is
the use of a Trading Journal or Diary. This very important to me as it keeps a
detailed record of not only my trading results, but also other useful information that
I can refer to later if required.