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Top 5 Trading Tips

Mark and Cameron give their top 5 tips for trading the markets.

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Cameron Malik All right guys. Here we are in the Maldives having a little bit of a break. So about seven years ago, Mark put out an amazing video of his top ten tips of trading the market, so we thought we’d just update that with Magnetic’s Top five trading tips. So Mark, what’s our first top five trading tip?

Mark Austin:

Tip number one is that too many individuals focus on catching the big move in the market, and really the markets only trend 20% of the time. So clients should be focusing on just capturing the small movements in the market, little is often, and it all amounts up.

Don’t focus on catching that big move, it’s a lot of wasted energy. (Tweet this)

Cameron Malik:

And what would that be Mark, in the FTSE, how many points would you be looking for?

Mark Austin:

So, 15% ATR is generally what we look for, which is 15% of the average true range, over a five day period. So typically, on the FTSE that’s around 10 to 15 points on average on a typical day.

Cameron Malik:

Yeah, and if you were trading something like the DAX you’d be looking for about 20 points, 15 to 20 points is a good amount of points, or if you’re out in Australia you’re looking for about 8 points on the ASX.

Mark Austin:

Tip number two is all about stops. So, a lot of people lose too much money in the markets by putting their stops in the wrong place, and they need to recognize that markets are there to maximize trade. So the markets will go for typical levels, or very easy levels where people put their stops, because the market needs to facilitate trade and maximize trade. By doing that, it clips stops.

So what we do at Magnet is we use a method called acceptance. That is actually allowing the market to accept over a one or five minute period, over a key level, or below a key level, and then if it accepts, you come out of the market. That avoids us getting spiked out of markets, which happens so often.

Cameron Malik:

Yeah.

Mark Austin:

So often you will see someone put their stop at at a … For example, 7,000. The market comes down and hits 7,000, maybe just below it, and then it rallies. We just see this over and over.

Cameron Malik:

Over and over, well see the market … Yeah, as you say, just hitting 10 points beyond it. Everybody’s stopped now, and then the market goes up to do what it is. But this method, we’re never ever gonna have a stock that’s visible in the market, and we won’t be tapered out of the market.

Mark Austin:

Sure.

Cameron Malik:

So, a very good key thing, and we teach that at Magnetic Trading; of what true acceptance is in the market.

Okay, so what is our top tip number three?

Mark Austin:

Tip number three is find yourself a mentor. We obviously started the same place you did, trying to work out how to make money from markets, and I must confess in my early days I spun my wheels like anyone else and made lots of mistakes. It wasn’t actually until I found a real mentor and surrounded myself with real professional successful traders that I actually took my trading to the next level.

The key message here is that try and find a successful mentor who’s gotten a proven method of making money out of the markets and extract as much knowledge from them and help as possible.

Yeah. Sure. As you say, you’ve got to find someone that has been there, gone through all of the problems, knows the rules. It’s like if you’re going to go to the Himalayas you need a guide to go there.

One of the most important things is actually asking the guide for their trading status. It’s like, “How much money are you really making out of the market? Are you making true returns?” You don’t want to fall into another marketing scheme on the internet. You want to get real trade advise with us or with other people, but real traders that make real money out in the market, who also have clients that are making real money in the markets as well.

Cameron Malik:

Exactly. Because if your mentors aren’t making money in the market then you ain’t going to make money either. So make sure that whoever is teaching you has a proven track record and has a proven ability to make money out of the markets.

Mark Austin:

Sure, and speak to the people that are trading with them.

Cameron Malik:

Okay. So, tip number four.

Mark Austin:

Tip number four is, focus on one market to begin with. Too many clients start off trading and they become a jack-of-all-trades, so they do a bit of forex, they do some indice traders. Even if they do indice trading, they’re doing the DAX, they’re doing the FTSE, they’re doing the ASX. Whatever it is, but just focus on one market, and really master that market, because once you’ve actually mastered one market, and you’ve got the ability to make money, all you need to do then is increase your leverage, which we’ll talk about in a second.

Cameron Malik:

Okay, so reaching your leverage. So that is actually Tip number 5, is increasing your leverage.

Mark Austin:

Leverage guys, this is a really biggie. And it’s realistic expectations of the market.

Somebody will take a trade and maybe they made a 1% move on the footsie and maybe they made 100 bucks or 100 pounds or whatever. But you just spent a couple of hours to make that 100 pounds. It’s just not enough.

So to make trading meaningful you got to be trading a decent stake. Now a decent stake in pounds is 10 pounds upwards. If you’re trading under 10 pounds, you now you’re not going to be making enough money on these day to day trades. You’ll be looking to over trade and that really leads to loses in the long run.

Cameron Malik:

Yeah, sure. And a lot people don’t actually think about if you were to want to be trading as a business, as a lifestyle, well you got to think how much money do you really need to make from that and how much money you’re going to need to have to trade with.

We average ourselves three to five percent a month. Some of our clients average a lot more than that, maybe 10% of their own smaller accounts. You got to work out what that is.

And yes, if you’re trading very small volume, you’re never really going to get there. You got to work out what’s the right leverage for you to meet your financial goals.

Mark Austin:

Okay guys, hope you enjoyed that. That’s our top five magnetic trading tips for 2017.

Cameron Malik:

Direct from the Maldives.

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