I’ve been reading these forums for about a month now and finally decided to join (after finishing preschool-14th grade in school).
I just want to ask a few questions and feel free to be as blunt with me as you want, I just want honest answers.
How much is a realistic amount of money to start with? I have close to $10,000 in expendable funds and would like to invest it (since chase’s .01% or whatever is cutting it).
I’ve been dabbling a bit on a practice account using the simple system described in the school and it has actually given me good results trading only EUR/USD and GBP/USD. Anyone else stuck with this? Or have you found that creating your own system yield much greater results? I do plan on creating a new system, but I want to test theirs out a bit farther and go from those results. I’ve found that trading in about 30mins-1hr intervals seems to be a good amount though longer sometimes keeps me more relaxed, the 5-10 min trades seems a bit too quick for me.
What brokers are you guys using? Any posts on comparisons of brokers?
Any programs you guys use to keep track of P/L or spreadsheets?
Thanks!
PS- has anyone used investools? I’ve heard mixed comments about them and was just wondering, some of my friends attended one of their seminar things (they didn’t fork over the other money for the other classes). They were showing me some of the charting software they have access too and it pretty much looks like stuff we could do on our own, just that they do it for you.
It’s not simply the amount that you start with, but also the leverage that you have, the amount that you are willing to risk on your account, and your profit goals. You can start with $100 as long as you’re trading nano lots, but your profits and losses will be in dimes and nickels and pennies. According to the pips school, $10,000 is the minimum amount to begin trading mini lots. The standard risk is 1%, so you’d be risking $100 per trade. As a newbie myself, I just don’t have the nerves to risk that much and would rest easier risking max 0.5%, but it’s up to you. You certainly have a good amount of principle, but it’s up to you to adjust your lot sizes and stops such that you’re risking a reasonable amount to make good profits, but not make you suffer significant draw down. Small profits consistently is the way.
Stick with one or two pairs. I can’t stress that more. You really need to “be” with a pair for minimum three months to get a feel for where it’s going, where it has gone, how the news has affected it, and also to see how trade setups unfold. The commentary by Pip Diddy is essential, and many other people trade these currency pairs so watch them, learn from them, understand their reasoning and embody it, and combine it with your own intuition for the price action.
If you have a strategy that is universal (i.e. support and resistance trading) then you can look atseveral pairs to see if there are any setups, but after a while it can be too much, so I would suggest you to max two. Definite stick to ones where you can get a lot of information on, such as analysis, other peoples trades with the pair, etc. Draw S & R lines, down/up trend lines all and more the make sense of the price.
I have found it’s best to start with a ready made time tested strategy. Why reinvent the wheel, when there are tonnes of strategies our there that work? Learn it, trade it, get a feel for it. Later on when you get more experience with the currency you can add additional information, such as Support and Resistance, COT reports, pair correlations etc., to guide your understanding of possible price action. Using an established strategy will also give you a higher probability that you will be profitable, which is a nice thing, because when you finally start taking your own strategy live you will be risking profits, which won’t be has disheartening to lose as your hard earned initial equity.
Indeed there are many many strategies out there, just as there are nuances to price action, but the most general common and firmly established ones, as I have seen are:
Breakout Strategies
Support & Resistance break or bounces
Some trade signal from a combination of indicators (i.e. ema cross overs, etc)
My point is, trade a system, then after a while you can tweak it to be more aggressive or conservative for your own trading personality.
Also as a newbie, I personal would suggest stticking to 4hr and higher time frames. Use the 1hr for a little more short term information. Lower time frames are a little too much, atleast it was for me.
Search brokers, and you will be able to find a lot of comparisons. I use IBFX, and I’m on a mini account although my equity only permits me to trade micro lots for now.
MT4 trade will do this for you, other than that I’m not sure, and will let someone else provide information.
If I were you, and I did this myself and found it very useful, open an account with $100 and trade lot sizes that equal about 10cents per pip before you try it with a much larger amount.
I considered it a test live account to practice trading live as a next step after a demo account to get the feel of trading live without risking too much.
If you do this you could set yourself targets and goals which if met would be a signal to depost more money and trade bigger lot sizes.
Also doing this will teach you disciplin while trading because with a small account of $100 you’ll see what happens if you get over confident and increase your lot size too much then hit a bad loss trade
Open an account with the amount of money you can afford to lose. What is that US$ 100, US$ 500, US$ 1000?. Don´t let that intial capital go less than 80%. If you open an account with US$ 1000, and after a month you have US$ 800, then stop trading, go demo trading and then add US$ 200, so now you have again US$ 1000, and start live trading again. Be prepared to blow your first account. Is very hard to follow a good money management the first time.
Find a system that works the best with you. How many time in the day you can be in front of your computer? Are a patient or anxious person? etc
