Since I joined Quora platform, my profile is overflooded with questions to do with FX Trading, investig and algotrading. The goal of this post is to summarize the different quetsions I answered already so there is single point to search.
Questions & Answers
How long did it take you to become a profitable trader?
I started in 2008, but only in the last three years my hard work started to pay off. Until then, it was mostly losses, mistakes, wrong strategies and decisions.
The main things I wish I knew back then:
- Choose the right broker, one that has the best execution, minimal spreads and excellent customer service. Those who offer gifts and bonuses were mainly causing me more damage than benefit. I did find Darwinex but it took me ages.
- Don’t buy robots, develop your own strategy. All the robots I bought was a complete disaster and cause me more losses, I learned the hard way that no one sells a successful strategy.
- Keep the leverage as low as possible, never use the full leverage offered by the broker.
- Earn less but many times, meaning to open small positions and make small profits that accumulate than big positions with high moving p&l.
Later on, when I got confident enough, I started writing a blog myself on Algotrading to share my exprience.
What trading rules do you use or are generally considered best practices in financial speculation?
Personally, the most important one is risk management which mainly rolls around keeping the effective margin below 1:10 ratio. Calculating the effective ratio is straightforward:
- Sum all the lots you have opened.
- Multiply with 100,000
- Divide with your equity
for example, assuming we have 1.5 lots open, it means we control 150,000 units. If we have an equity of 1,000, the effective leverage is 1:15… getting risky.
In my blog, I dedicated a full entry on risk management tools I use, if you’re into algorithmic trading, it might interest you as well.
How can I be a forex trader?
Start by learning what is trade all about and start trading a demo account to get a feeling about it. From educational point of view The School of Pipsology is our free online course that helps beginners learn how to trade forex. If you’ve always wanted to learn to trade but have no idea where to begin, then this course is for you – School of Pipsology.
What is the best free trading course?
School of Pipsology is a really good start, I used it myself when I started trading. It is build as different levels starting from the basics of pip definition all the way up to advanced indicators and risk management topics.
“The School of Pipsology is our free online course that helps beginners learn how to trade forex. If you’ve always wanted to learn to trade but have no idea where to begin, then this course is for you.”
If you want to learn about FX Algotrading, I have several articles in my site Ilan Tree – FX Trading 2.0 about this topic as well adics a dedicated course.
What should I learn before starting trading as begginer?
You may have a look at School of Pipsology as a starting point, to understand the basics of trading Forex, right from the pip value.
Once you grasp the knowledge of manual trading, perhaps you will have the interest to move to automated, then you may check Ilan Tree – FX Trading 2.0 course for understanding how to do with MetaTrader and MQL4.
What is your favorite trading (forex, stocks, crypto, etc) platform and why?
I only trade FX actively, the other products like stocks and crypto are done passively. I do so from several reasons:
- Liquidity – FX is a very liquid product which is always available for purchasing and selling.
- Spread – is minimal and can be close to zero.
- Volatility – active and moving quite a lot compare to stocks.
- Hard to manipulate the price compare to other products.
I do my trading solely with expert advisers trading on my behalf 24/5. I interfere only when needed, otherwise, I let them run. While with the other products, the market times are changing and available around certain hours.
What percent per year do you make with automated trading strategies? Is it possible to create a profitable strategy based on something as simple as RSI or moving averages crossover?
I am running several strategies in parallel on EURUSD, all have a different reutrn per month but more importantly, they are not correlated.
In general, I am aiming to have between 1–5% return per month. I keep the strategies as simple as possible, but the risk management is the complicated thing. So, for example one of my strategies is using internal bar strength indicator as a signal, but the strategy risk management makes it a profitable one.
This strategy for example – Investment – Ilan Tree is based on bollinger bands. So, you may as simple as you want, but the risk management will be the edge to make your trading a successful one.
I currently use a fix loss value as a border, if the P&L goes below it, the algorithm starts to close positions smartly and go bac into the reasonable levels.
Must every forex trader have a Myfxbook account?
No, it’s absolutely optional for you to have an account in Myfxbook, it is mainly used to track your performance and show case to potential investors but it’s not a must.
I personally don’t have an account there as I show case my performance in my personal website.
What is your experience of Darwinex, in particular the slippage on connecting your account to a trader?
I use Darwinex brokerage services since two years and so far I can warmly recommend it. The slippage is perfect, their execution is flawless and there are many financial benefits.
I have my own strategy running over their platform, you may see it in my website.
What are the various sources of capital for a sole trader?
There are couple of sources:
- Own capital, using savings and/or money you don’t mind putting in risk.
- Loans – least recommended if you’re not having a winning strategy which can cover the loan.
- Rebates and awards from your broker – personally I am trading with Darwinex who offers rebates on the trading commissions and a competition for the best 48 traders.
If you have a strategy you want to automate, consider writing a code which does what you do manually, then you can minimize the emotional risks involved with trading, see here for some coding examples.
What strategy do you prefer for Intraday Trading, trend following or setting a target and exiting it when the target is achieved?
I always follow the trend and let the winners run, the losers closed. This can be achieved by having a stop loss which progress with the trend or an algorithm which checks every X minutes the current status and makes a decision on what to do next.
See my blog for some ideas how to automate your trading in case that something you thought on doing.
How generic should algorithmic trading be? Should it fit in many pair forex or only one it is okay?
It’s a matter of taste, some make it unique to a specific pair but have the risk of over fitting their algorithm. So, when a new information comes, their algorithm fails miserably.
I do as generic as possible so I am able to run it on multiple currencies. Having it simple makes it easier to track the algorithm and understand what went right or wrong.
Are there any trading platforms that run on Linux?
You can even have MetaTrader running on Linux if you follow this article- Install on Linux – Getting Started – MetaTrader 4 Help. I did so myself on my Mac and it works flawlessly.
Does a college degree matter to be a trader? I find all the stuff in my high school class as irrelevant to Forex, stocks and crypto trading.
No, there’s nothing you can’t study online nowadays including trading. There’s so much material available online which can focus on forex, stocks, trading etc.
Personally, I taught myself programming expert advises which are algorithms running in MetaTrader and trade the market on my behalf. I share what I learn in my website and you are welcome to visit and educate yourself.
Is Forex trading easy or difficult?
It’s all a matter of practice and knowledge. Nowadays you can learn a lot online and get equipped with the right tools to succeed. I am in it for years, started manually and now it’s fully automated.
First, you need to decide what are your goals with trading, if it’s to become a millionaire or financially free, I chose the latter as it is more realistic.
As the first step, visit a good website to learn it, something like Learn Forex Trading With BabyPips.com, and then, once you did some trading in demo and real account, think about automating your trading.
What broker provides an international trading account in euro?
The broker I work with and prefer over all the others I used offers it – Darwinex.
You may see examples for algorithmic trading in my website if that’s your goal in trading – www.ilantree.com.
What do you think about online forex trading platforms, and what platform is best and most safe to trade with?
It depends on your needs and legal situation, I personally use Darwinex.
How should I start creating my own trading bot with no foundation in coding?
You can learn MQL programming online, or register to an online course like I am leading.
Is quantitative trading as simple as coding TA rules/strategies into MQL and creating an EA? Is there more to it?
There are many things to consider like:
- Finding the right broker
- Finding a winning strategy
- Managing the risk
On the programming side, I am leading a course to educate beginners on writing their own expert advisers, check it here.
Does Algotech trading work and how?
Yes, if you have the right strategy in hand and you are able to monitor and intervene when things go out of control you can make a living out of it.
It’s a combination of having a good strategy and the right broker, for me it took several years to find the broker and the strategy. I trade mainly with Darwinex and I publish my strategy performance for interested investors.
If you’re interested to learn about Algotrading, I have my own course with the following syllabus. It all depends on you in this field, it’s not easy, but super interesting.