Hi guys…
I am posting here just to get an idea from the more experience or profitable traders if I’m on the right way as I’ll be trading with a more considerable amount ( at least for me ) this time !
Just to give a little intro about my trading journey so far, I started around 2 years back, still a newbie and struggling with basics a bit :). Started with demo… was overwhelmed… so far have blown two accounts of not much value but did get a feel of the overall emotional process and I believe I learnt alot. All this I wasnt trading consistently, like when I blew my first account all this forex stuff disheartened me… but the attraction (or may be the revenge) brought me back. After blowing my 2nd account, I was away from it for a long time but still used to do demos once in a while and used to read forums, articles and watch movies about trading.
Any how, I started a third account after quite a while… trading purely on bare charts… candlesticks… employing the simple strategy of trading with the trend and proper money mgmt… but again couldnt practice it properly… blew half of my account… then I thought why not try BEING PATIENT this time… trading with the trend on daily charts with less stress worked for me !! This was the first time I ever made any money out of forex (though just $17 ) but this gave me confidence.
As I was going through my trading statements, I realized that if I could just keep my losses short and accept them (Mark Douglas way ) , I can automatically be profitable in the long run because everytime I replaced the bigger losses with an average one, I was profitable. (Please comments on this )
Any how, my trading plan now is to risk no more than 2.5% per trade and take trades with the daily trends when candle sticks like dojis and engulfing bars (from S & R levels) show me the money. Not gonna risk more than 5% (meaning two trades) at one time. Risk to reward should be atleast 1:2 preferably 1:3… the bigger the better. I am not gonna employ scaling in or scaling out… But if there’s any clear indication that the trades gonna go against me (at the end of the day candle) I plan to close it with a small profit or loss. I believe as long as my R:R is good enough, even if I hit 50% I’ll be profitable. Basically I’ll rely on probability. Plus, I’ve noticed that daily charts signals are much more reliable with very less noise. I dont have any particular targets (in $$$), though I doubled my last account within like a 1 or 1.5 months. I believe it depends on what the market has to offer at that time. My motive is to just achieve consistency and be profitable in the long run !
I can understand its a long story but I would request the more experienced and profitable traders to comment and basically encourage me if I’m going the right way !
Just wanna add one more thing… I’m not planning to calculate the $$$ to risk every time I trade. I’m gonna go with a set risk till I reach a set point. Like with a $100 account, I would keep on risking $2.5 till I reach either $75 or $150. Once I reach one of these, I’ll calculate the $$$ to risk again. The reason behind this is that I believe I’ll be relying on probability and the series of profits or losses are not guaranteed. Also, in a range, I dont think it would make a big difference, may be it can go to 3.5%. I believe the most important thing is that the amount that you’re risking per trade should be acceptable for you and not hurt you. It should not make you emotional.
Also, Please comment on the history of trades and advise me if I’m on the right track. Ignore the trades before january as I changed my plan then. This is the first time I was profitable. But the odd thing is that I went from 100 to 200 in like 3 months ! One thing is for sure I was risking too much… like 10% on average ! New Microsoft Office Word Document.pdf (292 KB)
Don’t risk more than 1%-2% per trade, 0,5% even better.
Your starting deposit in the account the same you plan later live.
This is a huge novice mistake. $10000 in demo and then $300 live… are you kidding me? LOL
At 1:1 and 50% you’re not profitable… this mathematical expectation is 0. You’re not losing but not winning. If your strategy is not profitable, CHANGE IT RIGHT NOW.
In my first time in a demo account I went from $1000 to $3000 three times in a row, before going live. It’s a great training.
I’d have to agree, better to stick to 1% of account balance (or less) as your stop. I do like the RR your employing though. 1:2 RR is really the minimum. 1:3 is better. You can have a strategy with a win rate of less than 50% with a 1:3 RR and still be very profitable over the long term.
Thanks for your reply. With all due respect I think you didnt read my posts properly or maybe the way i wrote gave the reflection of a complete newbie. I never said anything abt demo… I traded with smaller accounts just to get the real feel of it as demos are just good for getting the very basics right. They cant teach you the emotional part which is really important. The statement that ive posted is also of a live account. I was risking too much as i said earlier but with this new account ill be risking around 2.5%, some might say that even that is too much but then again this 2% thing is no hard n fast rule as long as you are comfortable with the risk.
And abt the r:r i never said 1:1 !!
Appreciate your response.
Thanks
Forgive me for pointing out the obvious but if your going to risk 2.5% on each trade and have the possibility of two trades running at any one time, your exposure will be 5%. Unless of course you open the second trade when the first is already in profit and you’ve moved your stop inside the trade? I appreciate your comment on risk appetite however, its not uncommon to experience 2,3,4 or more losing trades in a row even with a proven and time tested strategy. To take a significant percentage draw down from a small amount of trades can rock your confidence to say nothing of the number of positive trades required to restore the account balance to its previous high.
Yea thats exactly what i was talking about you are right abt risking low but since ill be trading the daily charts, the max ill be doing would be around 2 trades a week and at times they would be running the next week as well. Since frequency of trades is low i thought of risking a bit more. I have traded that way in the statement ive provided. Please let me know how you feel abt those trades except the avg 10% risk that i took.
Thanks
Honestly? If you plan on trading the daily I feel your leaving pips on the table from your relatively short duration trades. Try putting up a Zigzag 12/5/3 and a 6/3/1. I’m not suggesting for a minute you trade off this. Just to give you an idea of the time you might look to stay in a trade and the likely pips to be gained in a daily chart run.
I like the R:R targets; close the loosers early and let winner run. One thing you need to set is a $$$ target. Trading is about making money. After all your are investing money not pips/points.
Thanks for replying. Actually I was thinking setting a $$$ target per month is not very feasible as it depends on what kind of opportunities are being provided to you according you strategy. It might hinder your trading in some way, like if you’re not getting the set target and the month is abt to end, you might end up rushing into trades. So isnt it better to just keep your losses in control and take what the market is offering for the time being.
If you are a beginner in Forex trading, your account risk should be as small as possible. The main reason is not that u cant trade and shouldn’t risk money in Forex trading, but because beginners do not have enough statistics on their system or trading method to optimize their account risk per trade. You don’t know how often you lose, how big your drawdowns are, your longest losing streaks, etc.After you have gathered enough information about your trading (i suggest a year’s worth of trading), then you can begin to adjust your account risk per trade to your risk comfort level.
In general, i do not suggest that anyone risks losing more than 1% of his account per trade. and 5% at all times.
You’re probably gonna need to adjust your set risk more often if you’re trading smaller accounts. Every $$$ counts!
May I ask, how is having a set R:R affecting your trade ideas? I sometimes miss profitable trade ideas just because they didn’t meet my R:R requirements.
) this time !
) but this gave me confidence.