I’am the typical newbie I guess, I am still at the pipschool, I started traded last week on demo account, and this monday just started a live account with hotforex.
I started by create a trad plan which I am still trying to figure out, Thanks to the luck I guess I triple my capital of 150$ in 2 days with a nice pip peak this morning.
I am based in London, and the first rule of my trading plan is to trade between 8am-9am and 9am-12pm then
1pm-4pm.
I try to stick only to eur/usd and gbp/usd. I use MT4
I use a 500:1 leverage and I started with 0.5 lot, I try to use H1 and 15min, but I see myself looking at M1 chart and enter my order from there with market execution and not pending order.
This afternoon I was up 500$ before trying a Usd/jpy >.< I should never had done this around 5pm I blow my account in the space of a eye blink.
Well I m trying to learn from my mistake, so any advice would be much appreciate.
Now I am back 70$ and I will try to rebuild my capital which i want it to be between 1000-5000$
firstly I want to be a trader, and I should have started with that, to be my own boss, and self-employed, I want to be able to pay my bills, and sustain myself in general.
I ve got a little problem with how to draw Fibonnacci retracement. that’s a example how i think it should be but i guess I am wrong, what chart is more suitable to draw the Fibo rules ? M1 M5 M15 M30 H1 ?
I don’t use fib so I can’t help you with that, but maybe try going back to the demo account for a little bit longer until you figure out a definite trading plan. It takes people many many many months/years to be pro at this, so don’t except to be perfect straight away.
A good idea would be to look back and try and figure out what you did wrong. Did you read the chart wrong? Are you keeping an eye on economic data and news?
I believe you should’ve put the fib 100% at 130.220 instead of 130.235. Maybe a few pips lower. Or maybe an extension from way earlier in the graph, which I would bet the 127ish level would’ve lined up where you put the 0% for the retrace. But I’m a total noob, so yeah.
Look up fractals. They’ve helped me with spotting fib levels.
So there are a few things that I picked up on that I would like to cover with you.
Firstly the amount of leverage that you are using. if you are placing 0.5 lots with a £150 dollar account that means that you are in fact betting £5 per pip. While there is a tremendous upside to this (as you saw by tripling your account) it won’t take much to get wiped out with that kind of leverage (as you can also bear witness to) with £5 per point the market only has to move 30pip in the wrong direction for you and you will have killed you starting balance. [B]Even if you have a lucky spell of a few consecutive wins you wil get wiped out sooner or later[/B] A good rule of thumb is to only risk 1-2% maximum per trade.
To work this out look at your chart and decide wheere you want to trade. work out where you want to put your stop and where your entry price is going to be (be it a market or pending order). Work out the difference in pips between the two levels you have determined. Once you have determined where your stop is going to be then you can work out how much per pip you should be willing to trade.
e.g. example buy order.
Entry Price = 1.35650
Stop Loss = 1.35450
Pip’s at risk = 1.35650 - 1.35450 = [B]20pips[/B]
Current account balance = £150.00
Maximum risk per trade = £150 x 2% = £3
Amount to risk per pip (remember that risk is limited to 20pips with your stop loss) 3 / 20 = [B]£0.15p[/B] or 0.015 lots
This is essential risk management to ensure that you stay in the game long enough to make money. now £0.15 per point doesn’t particularly sound very sexy but that in essence is what you can afford to play with if you only have £150 in your start up account. Remember that if your stop is further away then you will have to reduce your bet as well.
With regards to your fib chart it depends what you are trying to do with it. placed where it is it looks like you are trying to measure the retracement made by the pair. So the way I would apply this in real time would be to say to myself “ok so this pair is currently going up, I think that the general trend is going to go up, but before it continues there is going to be a retracement (a short term down turn) what i want to do is to enter the trade after the downturn has happened so that when I buy in I will have the OTE (Optimum Trade Entry)”.
One way to measure this is with the fib tool so I trace a line from the lowest low to the highest high of the initial movement ( I would suggest that on your graph the lowest low is actually two candles to the left of where you have placed your low point) This will then draw a set of lines on the chart and on occasion (not always) price will bounce of one of these support lines. What I do once the fib lines are on the chart I look to see if there are any other forms of support that support a fib line (i.e. was there a recent high around that level, is the major trend line from a higher timefram intersect one of these fib lines) If there is already other existing support on these fib lines then I will wait to see if price reacts to it when it reaches the fib line and if it does (i.e. it is unable to push through and bounces off) then I will place my buy order and keep my fingers crossed.
there is no avoiding blowing an account I guess! been there did it and had to adjust my way of trading! remeber its not how much you can make in 1 day 1 trade so take it slow and easy! if you ask me for 150 .5 is quite big? unless you are pretty sure that the trade will go you way but you should follow what dafttrader said! but dont lose hope and keep it up! best of luck
been there did it and had to adjust my way of trading! remeber its not how much you can make in 1 day 1 trade so take it slow and easy! if you ask me for 150 .5 is quite big? unless you are pretty sure that the trade will go you way but you should follow what dafttrader said! but dont lose hope and keep it up! best of luck