3 Question........

Hi rudi,
I've gone through many of the feedback emails, and I found a few questions that were being asked over and over again.
Here are 3 of them and my corresponding answers.
Go ahead and read on, I hope that you'll learn something from it. :-)
(Question 1)
When looking for a good trend to trade let's say the 1 day chart says to Buy and the 4 hour Chart says to Sell. Now which one do I choose?

This is a really good question. If you are a beginner trader, I would recommend that you only Buy when the day chart and 4 hour chart (according to your example) BOTH indicate a buy signal.

This serves two purposes:

1) You get a better winning probability on that trade
2) The profit potential would be greater

2) Such situations take time to develop, and this is a great way to train your trading discipline.

This being said, if the day chart says 'Buy' and the 4 hour chart says 'Sell', you may also enter a Sell trade. However, this is generally only recommended for traders who know exactly what they are doing. This would be a higher risk trade, and once your profit target is hit, you must quickly exit that trade because prices are likely to soon turn against you.

Personally, most of my trades are of the former type.
(Question 2)

What is a good stop loss number that you use?

This is another good question to ask.

My answer is: It depends. I don't use a fixed stop loss.

Most of the time, my stop loss allowance depends on the prevailing volatility in the market.

For example, before the credit crisis, a stop loss of 20 pips for the EUR/USD pair may have been perfectly reasonable. When the crisis hit however, with the increase in the average trading range, a stop loss of 20 pips would be hit far too easily, especially if you are a beginner trader. (Note: I'm referring to trend trading here; not scalping)

In such a situation, I would typically increase my stop loss levels to cater for the increased volatility.

I cover 2 very specific stop loss placement strategies in the "Candlesticks Made Easy" E-book. If you're interested to learn more, you can check it out at http://ForexCandlesticksMadeEasy.com
(Question 3)

Should I use a limit orders or market orders?

Again: it depends.

If you are a beginner trader, market orders would do just fine.

As you gain more experience and start becoming more profitable, you can then start using limit orders to enter into positions with greater accuracy, profits and lower risk.

All right, that's all I have for you for now... I hope you've learned something new from this email.
Take care, and I'll talk to you again soon.
Best regards,