00:00Today I'm going to talk about why currency trading is so difficult and why it's so hard.
00:05So let's go ahead and dive in.
00:08So the first thing you've got to realize here, this is the euro dollar chart and this is a one
00:16cent range.
00:18One penny right here.
00:19You see this range?
00:21It will move from here to here.
00:23That's one penny.
00:25Okay, now what you've got to understand is that this range is one penny.
00:32However, you can see it right there.
00:35However, that one penny, I'm going to zoom up as much as I can here.
00:41But that one penny is worth $1,000.
00:47$1,000 for one penny.
00:50Okay, that is because of two things.
00:53One is because the currency market doesn't move a whole lot, right?
00:57One penny, you can see that it did move one penny, but that's not a huge move, right?
01:02I mean, hey, give me a penny.
01:05But what you've got to realize is that when I buy this or when I sell this, I'm going to
01:09sell this right now.
01:10Okay, now I sold one lot, one lot at one penny.
01:18Okay, now that one lot, if I go down here and I target 1,000 pips away, if I target
01:28one penny, that is $1,000.
01:32Okay, so now if I go down here, I'm going to make $1,000 with a penny.
01:36Now, the reason that makes currency trading so difficult is because traders have a hard time wrapping their minds around
01:46this.
01:46It's because of the small movements, and it's also because of the leverage.
01:51Because when you're trading one lot, that's actually $100,000.
01:57And so that penny is magnified, and it's not your money.
02:01It's the broker's money.
02:03And so you only have a small bit of margin.
02:06You only have a little bit of money in your account that it takes to use that $100,000.
02:13And so if the trade goes against you, your losses get stacked up really quick.
02:18And that's why currency trading is so difficult.
02:22Let's go ahead and take this further, and I want to give you another example here.
02:26And I want to show you now a stock chart.
02:30Okay, this is a stock chart of McDonald's.
02:34And this, if we look at this on the same time frame, that was a one-hour chart.
02:39This is a one-hour chart.
02:39And we're going to zoom up, and we want to look at one penny.
02:44One penny on a stock chart is so tiny, I've got to go to a one-minute chart here just
02:49to go see it.
02:50All right, so here's one penny.
02:52Okay, now if I go in and I take one lot on here, it's a much different thing.
03:00All right, so if I take this and I buy it right now, okay, you can see.
03:05Oh, I forgot it closed automatically.
03:07But if I buy it, let me do it again.
03:10We're going to add a stop loss here.
03:12We're going to add a stop loss.
03:14Instead of adding a penny, we're going to put our stop loss at $1.
03:19Okay, so we're going to put it $1 away.
03:22So it's $2.8980 is the price.
03:26So our stop loss is going to be $2.88.80, $1 away.
03:33And we're going to put our take profit at $1 away, $2.90.80.
03:43Okay, so now we're going to go ahead and do that right now.
03:46We're taking the trade.
03:47All right, so this is not even a penny.
03:50This is only $1.
03:51But you'll notice we have the same number here, $1.
03:55And look at the difference.
03:57It's only an $0.86 profit.
04:02Right?
04:02There we go.
04:03So 100 pips is $1 versus on the euro dollar, 100 pips is $1,000.
04:10Okay, so the point of this whole thing is that with this type of trading, when you're trading with the
04:17euro dollar, you're using an advanced leverage.
04:21It makes it so difficult, extremely difficult to be successful because of mindset, right?
04:31You've got to wrap your mind around the massive amount of leverage and how such a tiny move of only
04:41one penny equals a lot on the dollar side.
04:45Whereas stocks, you're not usually using any leverage and if it goes up a dollar, you make a few bucks.
04:53But in the currency market, if it goes a dollar, your account is definitely going to be either 10X or
05:00crashed, right?
05:02And so that's really a key thing that I want you to understand.
05:05And that's why in yesterday's video, when I said you want to target for 3%, that's really important that you
05:15are keeping your numbers in line.
05:17That's why currency trading is so difficult.
05:20So I'm going to be sharing a lot of other strategies, not all currency trading, but I got great feedback
05:26from yesterday's video.
05:28I needed 10 comments and I got the 10 that I needed.
05:33And so thank you all for that.
05:35And so I am going to be releasing that strategy tomorrow.
05:39But I wanted to just really hit this home because so few people understand how difficult currency trading is and
05:49how it's much more difficult than most trading.
05:52But with that same difficulty is a great opportunity as well.
05:58And I want to help everybody step past those obstacles into the opportunity that is set out in front of
06:08them.
06:09And I'm just really glad that everybody's here to do that.
06:13And so with that being said, thanks again for everything that everybody's done.
06:19And we can look at yesterday's video.
06:21Let's just take a look at that real quick.
06:23This is yesterday's video.
06:26You can see we've got a lot of good comments and I tried to reply to all of them.
06:31Looks like I haven't replied to – did I?
06:34Yes.
06:34No.
06:36I didn't reply to all – yes, I did.
06:40Reply, reply, reply.
06:41I want to reply to all the comments.
06:43But we got some great, great questions and comments.
06:46So keep that going.
06:48Keep that up.
06:49And tomorrow I'm going to release the strategy where we're going to be targeting 3%.
06:54And by the way, if you didn't get the PDF, I got some emails from people that didn't get it.
06:59This is how you do it.
07:00You click here and then it takes you into Telegram, okay?
07:05And then you'll have a Telegram right here.
07:07And then this is it.
07:08This is the button.
07:09And you can see a lot of people got it, but some people had a hard time getting it.
07:14And I also pinned it right here.
07:16So that's how you get access to the plan.
07:19And if you have questions about it, leave a comment on today's video.
07:22If you were reading the plan and you have questions, let me know.
07:27But again, just in summary, for those of you that are about today's video, just in summary,
07:35the currency market is difficult because it only moves one penny.
07:42One penny is $1,000.
07:44But in stock trading, a penny is just such a tiny amount.
07:49It's very, very little, right?
07:51So just keep that in mind.
07:54Get a grasp on your risk management, and you're going to do just fine.
07:59All right.
07:59Let me know in the comments what you think of today's video.
08:03And by the way, I just thought of this as well.
08:06Well, I'm going to be doing an entire video training on how prop trading works because
08:13someone in the comments asked about that.
08:16So I'm going to deliver.
08:17Again, whatever you guys ask for is what you're going to get.
08:21And I'm here to help you get to the next level in your trading.
08:25All right.
08:26Thanks a lot, and we will see you in the next video.
08:30Well, the next video.
08:30Let's go.
Comments