money management HELP!

[VulcanClassic]

I've been wondering why most people fail in this, so maybe I wouldn't step on the same landmine. This is a perfect example.

Looks like a soon to be member of the 98% club. Hopefully not, if he can quit overleveraging.


Jeff

[Revsly]

Different things work for different people, but I found that I really disciplined myself by creating my own trading book in excel and access, with both booked trades and planned/test strategies. It really helps me realize how much I am risking on a single trade, and keep note of where my stops and profit targets are (even if they are mental levels). I've found it much easier to let winners run and cut losers short using this method.

To be fair, my trades generally are a little under a week in and out so it may not be the best if you are a day trader. Also I'm sure some people would hate this method, but after some initial failure as a new trader, I decided to make a change, and this has helped me plan out my trades, realize when I am wrong, and understand what other opportunities I am missing out on and its been very successful so far (of course I don't have a large enough sample size to say I could continue this return level). That's what works for me, though I am rather good with money and risk management to begin with.

Also I've been trading with $1,000 initial equity, so it is absolutely not impossible to trade currencies with little cash. I trade with Oanda, which may not be the best broker, but it works for me because of my small equity and the fact that their spreads are the same for a $1 trade or $100,000 trade. I also don't trade on news, only fundamentals and technicals, so it works out (I've heard their spreads are wide during news).

[theunder18kid]

so how are u going with only 1000? I mean it is really hard for me cause I trade really really really really really really really volatile pairs...... the GBP/JPY..... even though I manage to win most of the times I still dont think I can trade with 1000 to start with since my stops normally are 100-200 pips and also I'm not a day trader since I had some bad exp trading daily.... I trade daily charts on a weekly basis. I think maby u guys are right, maby I should get micro lots since I have to risk 20% of my equity at a time with only 1000..... which seems to me like really really really really really really really stupid. but hey everyone has that winning feeling and that lucky feeling about stuff like this.... maby I should start being real thanks for the advice guys I'll check if my broker will allow me to trade micro lots

cheers

[theunder18kid]

the bad experience with the fx market made me think a lot more, but what I found is that newbies talk nothing and the pros talk logic. anyways I kind of got carried away cause I didn't really think that the money was that important, its kind of like I didn't really consider fx as something important. When I did the loosing trade I KNEW I was doing the WRONG thing, but somehow my inner demon just got me and I thought to my self " if I loose then I loose, but if I win I win big!" whereas now I think about it if I loose I loose exactly the same amount as I can win(my r/r is 1:3) at the time. anyways that day was really really stuffed cause the AUD fell like 300 pips in like 3 secs? it was like I did the wrong trade and after 3 mints I thought about it and went back to chance but it was too late..... how come us humans do these kind of stuff, and how come I want to make the mistake again knowing it will have the same outcome? I mean as albert einstein said "to do something wrong is experience or something and to do something wrong again expecting different outcome is stupid or something" I'm going to make the same mistakes yet I STILL CAN"T STOP MY SELF FROM THINKING THAT IT MIGHT BE DIFFERENT.... EVEN KNOWING THAT I WILL LOOSE, its 100% gamble but yet I STILL WANT TO DO IT??????????? WHY??? THATS the question I dont understand...... good thing is I still haven't got the money so haven't risked it yet. but thanks for the micro lots solution it really really logical and useful. and btw I'm like really young so maby its that get rich or die trying thing I got.....lol. anyways thats again for that micro lot idea its really really useful, maby u saved me 1k lol....

PS:I still want to risk 20% ROFL DAM MY BRAIN AND MY EXCITEMENT FOR MONEY. ROFL funny thing how we make mistakes that we already know and experienced, I mean me sorry lol. guess I'm just not mature enough ahaha

[theunder18kid]

Originally Posted by Trade It

Were you profitable in demo? If not then why are you trading live? Also sounds like you need to change brokers.

Sorry to hear you lost all your money. Forex is not get rich quick.

Ofcourse I was profitable in demo, I made 350k with a 50k practice accoutn in 3 months, thats 7 times my money... I'm not stupid, it just that I have a problem with money, it really gets me excited. and yes I didn't do money management well, and yes I think that 350k was fluke, but hey money gets u excited right? I thought I was gifted at that tim because profiting 7 times in 3 months is something hard to do, and also I SWORE to my self(didn't say that there is a consequence if I broke it) that I will only trade 10 mini lots MAX, but hey I traded 50 that day and lost everything. and also maby it wasn't fluke since I made the money on 6 diff pairs, is that luck or WAT rofl. anyways I know all the stuff some of u guys are talking about I just umm read my last post haha. thats again for that micro lot idea it really helps, hope more people can share ideas like that haha thanks again and why trade forex if you dont want to get rich quick? I mean a business takes more than 1 year to become stable, forex might be the same but a business is really really really really really umm realistic where as Iprefer the imaginary world of forex. and yes I know its not imaginary but somehow I think it is. and no its not because of that I lost all my money lol. there answered all the questions. haha thanks again for the idea, it is really really useful, thanks blackknight

[Revsly]

Originally Posted by theunder18kid

so how are u going with only 1000? I mean it is really hard for me cause I trade really really really really really really really volatile pairs...... the GBP/JPY..... even though I manage to win most of the times I still dont think I can trade with 1000 to start with since my stops normally are 100-200 pips and also I'm not a day trader since I had some bad exp trading daily.... I trade daily charts on a weekly basis. I think maby u guys are right, maby I should get micro lots since I have to risk 20% of my equity at a time with only 1000..... which seems to me like really really really really really really really stupid. but hey everyone has that winning feeling and that lucky feeling about stuff like this.... maby I should start being real thanks for the advice guys I'll check if my broker will allow me to trade micro lots

cheers

I've been starting off rather cautiously, until I get a firm grasp on the market. I've been generally risking anywhere from .25% to 3% of my equity on any one trade, I use pretty tight stops at levels I consider significant. If I get stopped out, I reevaluate my original hypothesis. If I still believe in it, I may wait a little then reenter the trade. For example, I was short hte dollar today and got stopped out of many of my positions (while in class haha), but looking at the reaction to such favorable news, it seemed to me as if the rallies were going to fail, so I got back in at better positions that I was originally in. After trading equities with a small account, I've really learned to appreciate risk, and hopefully it will pay off.

I'm up a little over 15% so far this month, which isn't going to be the tripling, etc of the account that you had in your practice accounts, but with the way I've been managing my risk as well as coming up with solid strategies, I think I can perform pretty well consistently. The more confident I become in my strategy (and the more I realize my weaknesses) I think I will risk a little more equity on each trade. But so far I've been able to maintain good returns with little risk. You never know, but hopefully I can keep consistent, which can be especially difficult when I have so much else to do in school.

I would still really recommend switching brokers if you have to risk essentially 20% on each trade. That's pretty extreme. It's a good way to double up quickly, but it's also a great way to lose it all quick. I like the flexibility that trading smaller lots allows, since you can take a big position if you feel strongly, or can enter piecewise until you are more confident in your analysis.

^^ My 2 cents.

[Trade It]

Originally Posted by theunder18kid

Ofcourse I was profitable in demo, I made 350k with a 50k practice accoutn in 3 months, thats 7 times my money... I'm not stupid, it just that I have a problem with money, it really gets me excited. and yes I didn't do money management well, and yes I think that 350k was fluke, but hey money gets u excited right? I thought I was gifted at that tim because profiting 7 times in 3 months is something hard to do, and also I SWORE to my self(didn't say that there is a consequence if I broke it) that I will only trade 10 mini lots MAX, but hey I traded 50 that day and lost everything. and also maby it wasn't fluke since I made the money on 6 diff pairs, is that luck or WAT rofl. anyways I know all the stuff some of u guys are talking about I just umm read my last post haha. thats again for that micro lot idea it really helps, hope more people can share ideas like that haha thanks again and why trade forex if you dont want to get rich quick? I mean a business takes more than 1 year to become stable, forex might be the same but a business is really really really really really umm realistic where as Iprefer the imaginary world of forex. and yes I know its not imaginary but somehow I think it is. and no its not because of that I lost all my money lol. there answered all the questions. haha thanks again for the idea, it is really really useful, thanks blackknight

Yes money gets me excited. I wouldn't be trading if it didn't. I would be running my other business full time if trading was not making me money, consistently. If you treat forex like a business, it is not get rich quick. If you treat it like Vegas then YES it is get rich quick.

Not to sound mean or rude but you really need to change your attitude about Forex trading. Unless you have money to gamble away. I just don't want to see you keep losing your money thats all. I can only imagine the accounts you're gonna margin call with the ''imaginary'' attitude you have toward trading.

[theunder18kid]

umm revsly what I wana know is how is ur profits good? I mean if u make 100 pips with 3% risk thats like 30 dollars... for a $1000 account..... which means u must use a micro account? and also dont tell me that a 15% increase is good in a months cause for a 1k account its not, why dont u make money off a job first and then start trading forex with a good solid account? when I say I risk 100-200 pips my profit targest are like 400-1000 pips, I trade the GBP/JPY btw, and also you seem to sound really smart with ur safe trading and stuff, I can't be like you because I'm still young, u seem to be young too "while in CLASS" what year are u? I'm still in high school, and also trade it please read my post carefully, I SAID I KNOW I"M DOING THE WRONG THING. AND BY THAT I KNOW THAT MY ATTITUDE IS WRONG. ur like a mom that tells plp to do stuff even though they know it........ anyways good to know that someone is almost as young as me, I wish someone was like under 18 like me and then we can be trading buds haha. anyways I've being trading for a year and I am profitable so I know all that general stuff about forex, no need to repeat that I NEED TO CHANGE THIS AND THAT. THANKS AGAIN TO BLACK KNIGHT FOR HIS GREAT IDEA OF MICRO LOTS, it is a REALLY REALLY good IDEA!! thanks, hey btw are u like the owner of knightsfx.com? btw I usually use a id called knightofsx33, so hey maby I can be a knight like u? haha thanks again. btw can plp stop assuming that I'm stupid and I'm short of common sense.... plzzz post more posts like blackknight his awsome. just sharing thoughts dont need to be a smart ass and say stuff thats really really stupid...... oh ye btw if I was gona try and be a long term profitable forex trader I would be investing 10k and risking no more than 1% of my equity, and I would definitly not be trading GBP/JPY. I'm just trying to gain experience here so please dont say stuff like I'm gambling my money away and stuff....... read my last post it say plzplzplz post useful stuff.... or something like that.... and thanks I know ur trying to help but ermm if my post answers ur question plz dont ask again......... lol gl trading and THANKS AGAIN BLACK KNIGHT UR AWSOME!!!

[rhodytrader]

Originally Posted by theunder18kid

umm revsly what I wana know is how is ur profits good? I mean if u make 100 pips with 3% risk thats like 30 dollars... for a $1000 account..... which means u must use a micro account? and also dont tell me that a 15% increase is good in a months cause for a 1k account its not...

He's absolutely right. A 15% return is a good monthly result. Do the math and figure out what that is on an annualized basis. Then figure out what your account looks like in a couple of years if you make those returns consistently.

... and also you seem to sound really smart with ur safe trading and stuff, I can't be like you because I'm still young,

That's a load of crap and you know it. Age as absofreakinglutely nothing to do with good trading.

ur like a mom that tells plp to do stuff even though they know it..

Maybe your mom does that because you're like a bad trader - you know what to do, but you find a way not to do it.

btw can plp stop assuming that I'm stupid and I'm short of common sense....

It would help if you didn't write long, run-on, stream of consciousness paragraphs with btw every other line.

btw if I was gona try and be a long term profitable forex trader I would be investing 10k and risking no more than 1% of my equity, and I would definitly not be trading GBP/JPY. I'm just trying to gain experience here so please dont say stuff like I'm gambling my money away and stuff.

You say you're trying to learn to be a good trader, to gain experience, but you're acting in the exact opposite fashion. By essentially gambling, as you are now (and you seem to admit to doing so) you're reinforcing bad trading habbits which are going to be hard to break when you decide it's time to be a serious long-term profitable trader.

[VulcanClassic]

Hey Kid,

I posted this once, changed my mind and deleted it, but after reading your post in the 5% thread, here goes;

The only way your youth could work against you is that you think you already know everything. When I was a teenager, you couldn't tell me anything I didn't already know. Now I realize I didn't even know what I didn't know.
It's wise to listen to people that have gone before you and learn from their mistakes.

I believe that you need to stabilize your emotions somewhat. This is evident in the way you idolize BlackKnight and slam TradeIt. Polar opposites in your mind. They both told you the truth but you didn't like what one told you so he's now the "bad guy". In fact, I don't know if you actually heard BK because you're still talking get rich quick, I think. (I'm not quite sure what you were getting at with that rambling post.)

Anyway, I hope you don't get your feelings hurt and have a successful future in Forex.