Am I on the right path?

Beginner Questions Trading Psychology
1

Hello Traders,

I am happy to be a part of Babypips community. This website gave me all the information I needed to start trading as a beginner covering wide range of topics. I gotta say it’s only been 5 months since I started learning about Forex and now I have much more knowledge in this field than the week I first started. I took time to learn everything I can from basics, risk management, technical analysis and so on, since I don’t wanted to jump right in and loose money miserably. It took me this long because I have never been familiar with financial markets before. I learned not only from this websites but from other sources as well.

Well my target is to make my money compound over time. I don’t have whole day to trade and dedicated 1-3 hrs each day for trading and learning. So all I wanna focus is bigger time frames like 1h, 4h and daily. I am not interested in smaller time frame like 1m, 5m charts since it takes much mental energy and active attention to trade those time frame. My focus is to have few but high quality trades each week. I’m very patient and is excellent in controlling emotions.

By doing some simple math it’s clear that even with 10 trades a week, 60% winning rate, 1:1 R/R ratio, 2% Risk of capital, it is possible to earn 200% in just 6-8 months(of course with a trading plan). Even some best case scenarios are attractive such as 10 quality trades a week(approx), 70% winning rate, 1.5:1 R/R, 2% risk makes big compound gains in the long run.

Well my question is this…

Am I thinking correctly? Since I am demo trading now and in the process of creating my own trading plan, I want to eliminate the noise and focus only on my expectations and exclude short time frames. (what I mean by noise is, claims about accumulating huge bucks in short time frames, and the advantages of trading frequently). I believe nothing comes quick stays longer. It’s better to compound money over time than to accumulate by trading many times a week. It’s better to have much promising but few trades per week than to have many, less promising trades.

My second question is If I only focus on 1h 4h daily frames it is possible to make a decent amount of percentage monthly? And how much % that would be in approx ?

Since I am on the journey to make consistent profit, it is better to work on something I believe have potential to grow money over time and omit every other things. This thinking will create a trading plan according to my goals. My thinking must match with the goals I have from trading. So I am back to my original question…

Am I on the right path ?

Sorry for the long post. I very much appreciate your comments on this post.
THANK YOU VERY MUCH.

2

I think, it would be better, if you apply all of your points on demo, since I am not sure about your trading skill, so it’s really tough to answer.

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3

Sorry to sound negative, but I really doubt it.

With my decades of experience and practice I can just about manage a win-rate of 70% with a 1:1 R:R.

I can only dream of that win rate with an R:R of 1.5/1.

I happen to disagree pretty strongly with you about all that, but it isn’t actually relevant at all to the substantive points you’re asking about.

A small minority of experienced, successful, retail traders manage eventually, after hundreds of hours of acquiring skills and thousands of hours of practice, to make 5% per month profit. That’s a great eventual aim for someone very ambitious and dedicated. But not many manage it.

Here’s a thread which will really help you:-

https://forums.babypips.com/t/pipcrawlers-thoughts-on-setting-newbie-expectations/17006

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4

Hello,

Here is my opinion:

1)Focus on capital preservation instead

  1. 1:1 r/r isnt ideal

  2. r:r > winning%

  3. 2% risk seems a bit much

  4. Its great that you can see the progress and knowledge you have gained after 5 months.

Now imagine the progress you’ll make and knowlwdge you’ll gain after 5 years… it’ll be like night and day.

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5

Anyone who tells you what you can make, can’t make, should make, and comparisons to what other traders make are giving you opinions. That aren’t worth anything. There are so many factors that will determine what any trader earns and they are so fluid there is no reliable answer to that question. But like any professional it takes time, commitment, patience and on going learning.

The only reliable answer that matters is design your strategy around protecting your trading capital so you can always trade. Next try to make the same mistake the least amount of times as possible. Understanding that you will make the same mistakes more than once.

Anyway that’s my opinion. Hope it helps
Gp

2 Likes
6

I appreciate all the points you have done. But when trading , 2% risk ratio keeping with consistency is not an easy task , because market moves at random most of the time and we can predict the real faction at all in spite of having good knowledge and experience.

7

i always try to manage my risk with real trading discipline, but when i use scalping strategy i fail most of time to sustain minimum risk ratio. because it contains huge risk than other strategies.

8

No disrespect meant, but these are totally unrealistic figures.

If you can do 500 consecutive trades with 1.5/1 R:R and a 70% win rate, you’ll be the best trader in history.

With a 1.5/ R:R, a steady 50% win rate would be a major triumph, and would secure you a very impressive and successful career and life-style.

Honestly, you need to read the thread to which LaughingCharlie linked (above).

Wishing you good luck, but on a more realistic basis than you’ve described.

1 Like
9

You are right, no way to ignore your opinion. Thanks for adding.

10

what is r/r by the way? And 1:1 ? Help guys newbie here #respect

11

dont want to sound rude. but dont listen to them

yes you can do that perf, its totally possible. but I think that kind of perf is only for full time traders(reserved for them), they can make even more.

if you are a part time trader or hobby trader , youll be winning less than that. and youll have difficulty to find setup on h4-h1 and entering into it. you must use D1 in your case, i think it will be better (imho)

understand that the difference between a full time trader and a hobby trader, is that one is professional while the other one is an amateur. for that reason there is a difference of performance between them, they dont play in the same league

my personal trading system as a full time trader lead me to a wonderful 25% average weekly performance during 6 consecutive months within demo account , alright. im not saying that anyone can make that, but im saying this is possible. yes i took enormous risk that i wont be taking in real. but the objective got reached. now i know that I can aim for a little bit lower perf like 10% per week easily with my real account

12

I have several advice for you to reach your goal:

Number 1: find a mentor, a real Master in the field. The one you know the others dont mess with him, the one you know he eat the market alive. he will be your teammate and help you fight the predators.you’ll have more probabilities to reach the goal you fixed(or at least close to it). choose him carefully, choose the best
Number 2: make the more charts possible and share it , even if you dont take it with demo account or real account for the moment. just draw the more chart possible and share it, youll feel the responsabilities and youll feel in obligation to be the best. be sure to be in a circle with top quality traders like this the competition spirit will force you to “walk or die”
Number 3: aim high in demo account , really high. like this youll be happy if you have a little less performance in the real account

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13

It is possible to gain a lot of knowledge by trading demo. Many traders can advance in trading by gaining knowledge through demo trading. Because it is never possible to make a profit without skills.

14

Agreed! Good skills make for a necessity to have success in forex trading. Without proper knowledge and skills, one can’t stand the pressure here.

15

True. But good skills come with time, patience and practice. So focus on developing skills with costant research and practice.

16

It’s a good thing that you decided to trade only bigger time frames. Smaller charts can be utterly misleading for a new trader. Good going!

17

When i am doing trading in the Forex markets then we have to understand that if we are looking at the bigger time frames then our chances of getting the profits are greatly increased.

18

Yes, but there are many other factors too, on which the profits depend.

19

Demo trading should be done first to acquire trading skills. Demo Trading Strategies can be used to develop a variety of collaborations.

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20

As a trader, i don’t want to confuse anyone with my opinions. I know how much time it takes to make a good strategy that pulls your profits up. I used to test strategies on the demo trades first and then execute it on live. Set your goals high for the demo and work on it. You will know later which way you have to work upon.