this is the Forex Q&A podcast this is VP
professional Forex prop trader here in
the United States answering your user
submitted forex trading related
questions every Monday morning now if
you have a forex trading related
question that is on your mind don't ask
me I don't answer them anymore what you
should do instead is go to no-nonsense
Forex on YouTube scan over the videos
because chances are your question has
already been answered somewhere on that
channel but if it is not you go to the
no-nonsense Forex discord forum link
will be provided down below in the show
notes and on YouTube as well so on the
no-nonsense Forex YouTube channel we
have now introduced you know depending
on how you look at it three to four
different markets for you to trade and
all of them I suggest you trade them
just a little bit differently than the
ones you had learned before so we have
4x of course that's what the majority of
the channel is about then we have the
spot metals market then we touched into
oil which is more into those kind of
other commodities markets you could also
lump it in with gold and silver because
those are commodities as well and then
we just learned last week how to trade
indices our way now this is a lot to
learn in the span of two years
especially because there's a lot of back
testing and forward testing and then
real life testing still to go for many
of you so I strongly urge you all to
exercise a bit of caution here I had it
a bit easier in the sense where I really
didn't have it easier because I didn't
have a channel like this but I learned
all of these at completely separate
times and I shouldn't even really say
learned I just pretty much decided to
trade them at different times in my 10
year career so there is very little
overlap I have a feeling however for
many of you there might be an overlap
going on right now and if you are trying
to put your algorithms together and have
still yet to really get into the forward
testing stage in forex for example it is
prob
not a good idea as much as you're going
to want to it's probably not a really
good idea to progress into any other
markets until you are at the very very
least in the forward testing stage of
your own algorithm when it comes to spot
Forex if you haven't gotten to that
point yet and I have podcasts on back
testing and on forward testing so those
of you who have listened to those
podcasts or read those blogs should know
what I'm talking about
but if you are not to the forward
testing stage yet you really don't want
to spread yourself too thin at this
point and try to get a grasp on other
markets even though though as far as how
we trade them there are a lot of
similarities it's still not a good idea
this material unless YouTube does
something strange is going to be up for
a very very long time there is no rush
here it is and always will be I think in
your best interest to just take one of
these markets and get to a point to
where you're really happy with what you
have there before moving on to anything
else I think there's a real danger in
spreading yourself too thin here it's
the whole phrase inch wide mile deep now
you can snicker at that phrase all you
want but it's true and you should follow
it when it comes to learning how to do
something new for the first time
especially something that affects your
money like this does now I'm also the
guy who says you should have your money
in a bunch of different places and I
believe that however this is different
this is technical trading with a very
defined process to it that most people
have never ever seen before and need to
learn and test and do all the things
that many of you have already done now
if you're already in the forward testing
phase with Forex for example well then
because we trade the daily chart and
time is always on our side as a result
then of course you can go move on to
other markets that I think
is the most appropriate time to do so
and I know there's people out there who
are like alright I'm just not having a
whole lot of success putting together my
Forex algorithm with any kind of real
results behind it maybe I'll have more
luck in metals or in indices I don't
think this is the right way to go I
think you're just not being patient and
I'll bet I'm right look at it this way
once you were able to put something
together that works really well in the
spot forex market especially if you've
been back testing it and then for
testing it over the course of 2019 which
has not been a friendly year for forex
traders if you can still crank out
something good here putting the same
thing together for any other market that
we've talked about or we'll talk about
is going to be a lot easier out of all
the markets we spoke about spot forex in
my opinion is by far the most difficult
but that's the key traders get good at
the things that are difficult embrace
the things which are difficult get over
them and conquer them because after you
do that no matter how long it takes
after you do that everything else which
comes your way becomes a lot lot easier
no matter what it is it is the 4xq a
podcast and this is an interesting
episode because this is something when I
was conceptualizing the entire channel I
had you should have seen it a bunch of
colored index cards laid out all over my
floor and each of them was a different
video I had planned to make so I was
doing this before the podcast really was
even a glimmer in my eye and in order
not to make a mess all over the floor I
went ahead and wrote all those down on a
big piece of paper and put him in a
Google sheet and something that was on
the index cards but just somehow did not
make it to the big piece of paper or the
spreadsheet was what we're going to talk
about today and I had almost completely
forgotten about it up until the indices
video and I had brought something up
there
that people jumped on ride away and it
was my fault for not explaining it
further you have to understand there are
a lot of times where I put examples up
on my videos which I don't feel need a
ton of explaining because I feel like
it's very obvious and a lot of times
that really is the case you know there's
two or three people that just don't
quite grasp it but for the most part for
the sake of keeping things under three
hours long you know I don't explain
every single concept in every single
example to tea there are other times
where it certainly would have been in my
best interest to go a little deeper on
the example I just gave now early on in
the indices video I try to put something
out there to get people excited as to
the potential getting really good at
index trading can provide you with and
so I put up a slide that said okay if
you are able year-over-year to pull out
a 10% return in forex trading which is
good that is for somebody who is trading
and making money all by themselves ten
percent is really good that's not going
to get you in that elite status where
people are gonna want to pay you to work
for them but 10 percent to where most
people who do it themselves lose their
ass and to where a lot of people who you
have to pay can't even crank those
numbers out ten percent is good and then
if you replicated that in metals and in
indices and then I said with oil just
because it's it's really one pair I
guess that you're trading WTI slash USD
in my case let's just say that's a 1.5
percent return so when you add all those
up it becomes a thirty one point five
percent return which is absolutely
extraordinary
and almost unheard of in the financial
world yet extremely doable I mean this
is not a fantasy this is real life for a
lot of people people who have gone
through the forward testing phase have
already seen how these returns are
possible you have to be really careful
when talking about results like this
especially when they're high
because then all the sceptics and all
the people that have never tried to do
it themselves are going to try to jump
all over you but many of you like I said
have already seen 10 percent returns
yourself in the forward testing phase
and a few of you have actually
experienced this in the real life phase
when it actually counts which is
different than the forward testing phase
believe me so my example wasn't that
crazy what people did not understand
however is what we are going to talk
about right now and I'm glad I saved
this till later because this would have
been way too much to throw at somebody
in the risk video for example because so
many people who saw that video have
never had any kind of instruction on how
to put together an actual risk profile
in their lives and that's why that video
has made such a difference in the way
people trade what I'm about to tell you
right now would have done nothing but
complicated so this is good that we
ended up forgetting and we did wait this
long to talk about it so let's say I
want to trade spot for X and spot medals
and nothing else and I have twenty
thousand dollars of trading capital that
I want to use now I realized that
putting my money with two different
brokers is probably a smart move just
for safety purposes so I'm gonna trade
ten thousand in a Forex account with one
broker and then another ten thousand in
a metals account only with another
broker just to keep myself diversified
so ten thousand with broker a and then
another ten thousand with broker B and
that equals the twenty thousand dollars
that I have to trade with now here's the
part where I think people get confused
let's say I have a really sweet setup on
the euro/usd to go long and I don't have
any other trades forex or metals on my
radar so I'm going long and now I need
to calculate my risk so in order to
calculate your wrist you need to know
how much you have in your total account
so in this case what number am i using
ten thousand
because that's my forex trading account
says no it's still $20,000 like it
always was just because I put half in
one broker and half in the other broker
doesn't mean I cut my overall risk in
half like that I traded the exact same
way as if it was all in one $20,000
account me splitting it up 10,000 here
and 10,000 there has nothing to do with
how I calculate my risk it was 20,000
the whole time and whatever the sum of
those two accounts is whether it's
higher or lower than 20,000 over time
that's going to be the number I use to
base my risk off of I am and always was
trading a twenty thousand dollar trading
account it just happens to be in two
different places and because of that I
had to put ten thousand and one and then
ten thousand in the other so on that
Forex account that shows it has only ten
thousand dollars in it what is a two
percent risk on this trade is it two
hundred dollars no it's not it's four
hundred dollars because this is not
really a $10,000 account it's a twenty
thousand dollar account
I'm just being safe and splitting up
between two brokers just in case for
some weird reason one of them goes
belly-up that's it
this was a twenty thousand dollar
account from the start and it still is
so it's gonna look like to the untrained
eye that you're actually trading 4% on
your $10,000 account but you're really
not because you know what you were
really trading is the sum of the two
please tell me this makes sense I've
done this in the past to where like in
my mind I don't know if I've really
explained it that well because this is
what makes sense to me and then in the
end it's always worked out really well
most people are like yeah that made
perfect sense and then I worried about
it for nothing because I really do want
you guys to grasp this because if you
don't do it this way and you treat both
of those accounts like their own little
separate entity then you are you know
assuming this is the results you
got get 10% on the one get a 10% return
on the other and end up making 10%
overall when you should have gotten
twice that you ended up splitting your
risk up for no reason
split your account up into two different
ones just to be safe from a broker
standpoint but trade your account like
you had never split those two up in the
first place because the example I gave
in the indices video is what would
happen if you traded all of those
instruments through one account and even
still it might not be totally accurate
because your balance is gonna go up and
down but it's pretty close but unless
you're a madman and you are trading
everything out of one singular account
you're gonna have to split it up and
you're gonna have to make sure you don't
make the mistake of splitting up your
risk at the same time because then
you're not going to get the results you
want so if you do end up putting your
money in two different places
remember this podcast it's gonna look a
little strange at first but you will get
used to it now if you understand this
there might be a little hurdle in your
way
once you try trading this way and that
is a matter of leverage so this was an
episode eight of the podcast I will
actually link that one down below
leverage really the way I think most
people should look at it is just how
much margin do you have to trade with we
the way we do things the way our risk
profile goes we don't need a lot and so
I always said twenty to one was just a
set it and forget it type thing no
matter what your trading put it on there
walk away never worry about it again the
chances of you running out of margin are
so small with a twenty to one leverage
that will probably never ever come up
now if you are trading this way the way
I advise if you're splitting your money
up into two different brokers in this
scenario and only in this scenario
should you probably go ahead and raise
it to thirty to one or if you can forty
to one yet
understand if you have the risk profile
that we do at no-nonsense Forex it could
be five hundred to one it wouldn't
matter we would trade exactly the same
but when we are doing what we are doing
with these two different accounts and
trading what on the surface looks like a
ten thousand dollar account like a
twenty thousand dollar account which it
actually is there may be a point in time
where you start getting thin on margin
so you're gonna have to allow yourself a
little more but this is a very easy
thing to do so in a nutshell you're
gonna want to trade your account like
you have everything that you trade in
one account but in my opinion putting
all your eggs in one basket like that
and by that I mean in one broker because
as safe as most brokers are these days
you just never know splitting your money
up into two different brokers is
probably your best move but that doesn't
mean you just automatically split your
risk the same way there is no reason for
that trade a twenty thousand dollar
account like a twenty thousand dollar
account no matter where the money is
located and if you have aspirations to
become a real money trader but just
aren't there yet and you're in the demo
phase do all of this on demo so once you
transition into real money it won't be
that weird
it'll just be commonplace and it'll be
the best of everything because then you
can see how well you would have done in
each market your trading and you'll be
able to see your overall return across
all markets at the end of the year and
you'll be getting good and proficient at
trading with two different brokers and
getting to know the ins and outs of each
one so you're not fumbling later when
it's actually crunch time it's the best
of everything but just don't make the
mistake of splitting up your risk as
well because if you do your results are
not only gonna be a lot less accurate
they're good enough being a lot lower
than they probably should be now if any
of this is still unclear to you or
you're just a more visual learner like I
am I will make a blog just for this
episode you can find that
down in the show notes and in the
description as well like I said before
when I was doing all those index cards
this was originally going to be a video
and instead of just audio so I'll give
you some numbers to look at as well but
more videos and more podcast still to
come traders the amount of markets you
are going to be able to trade is
actually going to go up we're gonna add
an at least another one on so just make
sure you're not spreading yourself out
too thin inch wide mile deep go get it