its hard to side with whether increasing my risk by 1% or to stick with the 2% max rule only. What are your thoughts?
The risk management need to be combined with your methodology and win rate. If the win rate is high, I don’t mind to risk 2% each time.
The 6 - 7 pips SL needs to be supported by a very good win rate. That means your eyes are sharp enough to catch market movement. Your RR should be at least 1.5. If you can achieve this, no problem.
I suggest you start with demo first. When you can repeat your performance within 3-6 months, you can start with live account.
To be honest, the performance you are mentioned is belong to more advance trader. Beginner usually has difficulties to trade with your specification above.
When I trade with single entry, the minimal balance will be 2000. My risk will be max 1%. My RR is 1:5 at least. My win rate is around 55-60%.
For your case, I think you need to focus with your trading methodology first. Try to find out your win rate and optimize it before thinking about risk management. Your risk management will be useless if you don’t have good trading methodology. 
yeah about the 6-7 SL how short are yours usually? I feel like 6-7 SL is extremely tight. What happens if you plan to LONG the EUR/USD and where you take your buy order there’s a retest which stops you out, however, then it suddenly follows your direction. don’t u think having a larger SL may be beneficial in terms of profitability and WR? What are your thoughts.
My trading methodology/plan usually follows as this:
Draw up S&R
look for round psychological levels and any news/fundamental analysis
Identify any trends
identify specific candlesticks that may show lack of sentiment whether it be a long/short.
do you think that is okay I have more steps but these are just basic.
I agree I tend to go for a 1:1.5 to a 1:2 RR 
Hi @tomo22, Mine can be around 5 to 10 pips. All depends on instruments.
For example, EURUSD. It has structured movement. So, I can put 5 pips as SL. XAUUSD, I need around 8-10 pips. GBPUSD, it takes 10 pips. But when market is volatile, I needs 20-30 pips. Even the win rate is high, I will skip the chance. NZDAUD it takes 3-5 pips.
When I got SL then later market reverse to my TP, just let it be. Learn to accept your losses. It happened usually due to technical against fundamental. Look at current price movement, most technical go against fundamental.
Your SOP is good. The problem with most trader, they tend to draw different SnR. You have to look for Higher Time Frame (HTF), HTF will give you market structure. Once you get the strong structure (also will get strong SnR), then you go to Lower Time Frame (LTF) to find momentum and movement that move according to structure on HTF. Most instruments show structure at H4 and D1. So you have to have strong skill on these TF.
I never find a trader can survive in trading by using one TF only. So Multiple TF ( MTF) skill is compulsory and an absolute requirement.
5 - 10 pips sounds a lot better. I somewhat agree with the TA and FA that they don’t usually work together. However, I have had some instances where my TA and FA have aligned perfectly and worked together, but most of the time they don’t. What is SOP, H4 and D1? I agree with you HTF is definitely a must for drawing up trend lines S&R etc… i usually like to look at daily, 4 hr and sometimes monthly to get a good outlook of the market.
i have another worry I’ve been told by family that you can make more by investing in the S&P 500 than forex trading. I’ve heard the 90% of traders don’t make it etc… all that stuff. Im pretty young I’m only 18 and just started this 3mo ago. I wanna hear from you your experience in trading since I assume you have been doing it for a long time. This may be a bit personal and you don’t have to answer this but have you made profit over time? is day trading your job now? can you become ‘wealthy’ off this? I know this isn’t some get rich easy thing and I know it takes years but I’m not going to give up until I can reach that stage where this becomes my job. i just want to know if this is possible if I don’t give up?
Hi @tomo22, I didn’t expecting you were that young. But the good thing is, you have a lot of time to learn and if you are consistent enough, you can be legendary trader in 10 years. I have been trading forex since 2005. My basic trading got from stock market since 1999. Most traders become expert after 5-8 years trading actively. So, this is the good news for you.
The generic SOP is only find SnR on H4 and D1 chart. From here you can see market structure. You can rely on Price Action or SMC, they both are about the same. the SnR at H4/D1 is external structure. From this external structure, you can find the small structure in lower TF. You trader internal structure is safer. External structure is wild, you can observe how XAUUSD, USDCAD, EURUSD and GBPUSD are hitting their external structure. Risk will be higher but more opportunities.
In term of safety, yes, they are correct. But if you know how to trade, CFD is the way better. But remember the risk is higher 100 times. My performance when I trade using 2k, I can double into 100-300% / year. But when I change my mode into crazy, I can make 100-200% / month. But in my crazy mode, there is certain month I will loss all my balance. 
Using my money management, in the end, I am still making profit.
I suggest you to start using demo account. Try to have consistency with your methodology. Don’t bother the profit, only start with 0.01 lot. If you can have consistency in within 1 year, you can consider small account.
Your question about my profit, yes of course I have been making money. My primary income is from CFD. I am trading stock, crypto and bond as well, but CFD is biggest one.
Trading is my daily job for now. I am managing fund of few institutions.
You can make money and have a good living from trading. But if you want to be wealthy likes Paris Hilton, you won’t. You need to run business for it. You can have profit from trading and start a business from your profit. The key is focus and plan. Nothing will happens, unless you make a plan for it. You are 18 years now, try to make a plan, execute it and monitor it. When you 28 … you can be as wealthy as Paris Hilton.
Let says you want to have a good living from trading, you need a big sum of money to do so. As for me, I need 80k to generate 6-11k / month from trading safely. As you can see, this 80k is not a small money. You can setup a company using 80k.
Another option, you should learning automated trading, learn programming will be helpful. I’m a software engineer. I got my master degree from Wollongong, I learned a lot of trading concepts from here, and I have been making a lot of trading concept that are been using in many investment firms.
@TYGMedia what does SMC mean?
also, are you saying internal structure is better than external? I like trading externally (4hr daily) I find that drawing from an external point of view is a lot more accurate in terms of TA ( S&R). I am a bit confused about this part.
I have never used real money in CFD I’ve been demo trading the entire way using a 0.6 LOT size and using appropriate SL.
Thankyou for the insight and advice I really appreciate it
Hi @tomo22, SMC is Smart Money Concept. I don’t really use it. But it’s helpful to identify market structure for beginner.
There is nothing better. Knowing internal/external can help you to identify next move. Analyze 4H / D1 can help you to find out strong SnR. It will be material to know our limit and maintain risk in trading. LTF will be useful to limit our risk. You need to learn a lot first. Do lot of demo, try to record your analysis and you will see where is the part you can have good win rate.
As a beginner lot size is not important. Strategy and methodology is number one priority for you.
@TYGMedia I prefer to use an external structure rather than internal. I will give internal structure a go using external as guidance. I find that the majority of my wins have been from external analysis whether it’s trading off S&R in combination with certain candlesticks and sometimes chart patterns.
when you say internal what LTF are speaking about 2hr, 15min, 30min etc…
thank you
@tomo22 Demo is your friend. Are you worried about risking a $2k account on 5-10 SL? Sounds too tight to me? You said you were trading for 3 month?
Maybe your broker has fractional units when placing your entry order so like less than .01 lot, or 1000 units. Might get more breathing room.
@Thebeezneez i love using demo. No im fine with SL at 10, however, 5 just seems too close to me. I feel that it doesn’t give enough room. I could try a lower lot that may be true. Ive never traded live I always use demo
@TYGMedia hi ive taken in your advice in looking at internal structure. I can see where your coming from as it would offer more trades. Do you think this is worth implementing or sticking to my usual external structure and taking trades off that?
Hi @tomo22, glad you can see how external and internal cooperate. 
I will aware how external and internal structure are, because it will cut slim my SL. I have been trading this way for almost 20 years, and the result is good. The same method is also applicable to crypto in some extends.
Unless your method can give you consistency, for me this is the only choice.
Actually, I have been looking around for other methodologies since 2020 by joining many trader’s forums, like babypips. So far, I only found 2 promising methodologies. So, for your own safety, i suggest you to use price action and keep aware of internal and external structures.
Example:
We have external structure on EURUSD as bellow
By knowing the limit above, we look into the internal of H1 chart. We have bellow:
From second picture we know exactly our war map. So we can put 2 positions as bellow:
As you can see, the SL were less then 10 pips. The RR were between 5-8 times. By risking 1%, you will earn 5-8% each trade. By havng 8-10 trades / month, reaching 25% / month isn’t a problem. You need to sharpen your skill only.
Note: my apology for mentioning alcoholic things to you before, since you are 18 years old. It will be inappropriate things. 
Lets have lammngton instead 
okay this helps. However, what is your methodology in trading? i see how internal can provide more trade line ups, but how are you using s&r here? for the second trade I don’t see any levels of resistance, I wondering your setup/method.
hahah in Australia the legal drinking age is 18 so its okay
also I was going to ask if you had any books in mind for trading?
also just some life advice I’m finding I have a lot of free time and I want to use that free time into doing something like improving my trading game. what things would u recommend me do as a beginner to improve
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I’m using Price Action in analysis. But there are certain patterns I’m looking at. Different instrument, different patterns.
I’m using SnR. SnR are not just a line. They are areas. You can see the dark blue box on the picture. They are SnR. If you read the detail about Price Action, there is market range. Market range will define a good SnR. However, most people don’t understand how Market Range in Price Action.
I recommend book from Al Brooks and for pattern analysis, I use econometrics. Here is the book.
As a beginner, these are point to develop:
- Prioritize to build your discipline.
- Learn to identify external structure with price action or SMC. I observe these two work fine.
- Learn how the movement in internal structure according to external structure. It’s not 100% accurate but it can be predicted.
- Learn to identify the first moment price is going to switch from trend to sideways and vice versa.
- Learn how to analyze market from higher TF to lower TF.
- Try to implement different entry strategy base on analysis above, knowing what is breakout, pullback and reversal.
Above are the must to have basic for beginner.
okay thank you this helps alot @TYGMedia.
another question. I want to make more money and I know I have to be extremely patient and discipline with this. Do you have any suggestions that I can do to make more money?
Hi @tomo22, This one, I can’t really give an advice. You need to follow your passion. As you are still young, you can plan your future. I remember my past in Australia, when I was a college student. I worked as shopkeeper, dishwasher and meat packer in factory. I was also a freelancer software engineer. I did whatever to make extra money.
The point is, we have to assess our condition and skill. Don’t be afraid and shame to pursue our dream. As long as we don’t break the law, we have the skill and our body fit to do the job then we can go for it. Then until we have enough capital, we can do whatever we want.
I am not from a wealthy background. I had done a lot of business, was scammed and went bankrupt few times. Live is tough, but don’t let it messing with our future. We need to be persistent and have dedication with what we do. As long as you do it properly and run it carefully, the result will be good in the end.
If you asked about extra money from CFD, there are many. You will know when you have enough skill.
thanks man that helps alot. Recently i haven’t really felt fulfilled at all I feel like I’m not doing enough with my time. I currently have a lot of free time and spend it learning trading asking questions and backtesting yet, I always feel like there’s something more I can always do.
I have a job and study full time at university. I just feel almost upset at myself because there’s always something more I can do and it drives me crazy that there’s people out there who are doing more and are better than me. probably isn’t the best place to talk about this stuff but any words or advice would help.
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I think you should not rush. Study more analytical material, read blogs, watch videos. Each trader is individual, as is the path to success. Leverage on Forex is not the main thing, the main thing is how we apply knowledge. For example, my results improved when I completely started trading using technical analysis. There is also something to improve, but it is already better
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what are your big indications to tell the difference between pullback,reversal and breakout