Am i on the right track?

Beginner Questions
1

Hello,i opened a Demo account recently,precisely on the 5th of this month,starting with 5,000$ and trade with 0.1 lot per position my total balance is now 5,700$…i just want to know ig i am doing this right…is my 0.1lot too much or too small

2

Hi @kevinberry,

The question you need to answer is this: What percentage of your account are you risking per trade?

For example, with $5000 in your account, $50 would be 1%, $100 would be 2% and $250 would be 5%. When you say you trade 0.1 lots, we assume you mean 10,000 currency units (10,000 euros, if you are trading EUR/USD, or 10,000 US dollars, if you are trading USD/JPY), in which case, you are risking approximately $1 per pip. Therefore, if you risk 50 pips, then you are risking about 1% of your account, and if you risk 100 pips, then you are risking 2% of your account, and so on.

Your goal should be to have a risk management approach that stands the test of time, and if you trade long enough you will encounter losing streaks. When that happens, drawdowns to your account balance can add up quickly if you risk more than 1% per trade. You may find this article helpful in understanding the rationale behind risking only 1% per trade: The Most Important Math in Trading | New Trader U

If you are currently risking more than 1% of your account per trade, then consider reducing your trade size. For example, instead of 0.1 lots, you could trade 0.01 lots or 1,000 currency units. Then you are risking about 10 cents per pip. With $50 to risk, that’s about 500 pips. If your trading strategy requires you to risk only 250 pips per trade, then you could increase your trade size to 0.02 lots and still be risking only 1% of your account.

1 Like
3

It depends…sounds great…but…

  1. Need to keep trading that system for at least 3 Months…a few days is not enough.

  2. What type of system is it?

  • Pips Per Stop Loss?

  • Pips Per Gains?

  • Trading On Lower (more volatile) or Larger Charts ( more reliable Long Term)

  • Indicators ( less reliable) or Candlesticks ( more accurate with fewer False Signals)

  • What are the factors you use to determine Entry, Targets, Stop Loss Placement and Market Direction?

4

Are you going to open your real account with $5000 ?

Forget the “Size” of your “demo account” - that’s just to get you “used to thinking in big numbers”

If you’re going to open a real account for $100 say, just trade the pot between $5000 and $4900, so when you get down to $4900 - You’ve “Blown” your account.

That way you won’t start thinking in terms of $700 a week and only have a $100 account to try to get there

Proportionally, you’d be $14 up at the moment off a $100 account, which is great -

Off a 0.1 lot account that’s around 700 pips which is great - are you trading multiple instruments at the same time. ? Surely that can’t be what they call “Scalping…” but is really just short - term trading.

Note $100 is just and example. Whatever size of account you intend to trade for real, “pot up” that much of your demo account and use the principle I explained.

[Edit - I would suggest that a system which nets 700 pips in a fairly normal sort of week would be likely to need stops which would make bets of $1 per pip quite risky. Obviously as others have said, we don’t know enough to be dogmatic about it - Unless you’re “Trading” Bitcoin of course :laughing: ]

5

I plan to open my account with 400$,am a student,very busy so don’t have time to be studying charts…i get my sugnals from a third party…plus i trade multiple instrument and normally hold them for three(days),the third party instructed me to only use 0.01 lot with good money management…tp of mostly 50 pip and sl of -100 pips…

6

i get entries from a third party…50-80 pips per tp and -100 pips per stop loss

7

You are not on the right track then… You should learn how to trade when you have time. Otherwise you’ll just lose your money, eventually.

100 SL and 50-80 TP? Kidding me? Your TP should be higher than the SL, mate. Seems like your third party fellow doesn’t know a thing about Forex trading… You lose once and then you will have to win two or three times to get it back, that’s frustrating…

Someone is telling you what to do with your own money… not gonna be a happy ending… :confused:

You should save your $400 and learn about trading later, trust us. Signal services aren’t trustworthy in the long run, they’re humans too behind those computers…

Don’t do it. Learn it when you have time. We warned you.

8

I really appreciate your trading lots size. By the way, what’s the winning ratio?

9

Baby steps… As long as you’re earning, you are doing it right.
Perhaps you could consult a mentor or someone who could give you professional advice.