Hey, I was hoping to get some people’s advice on my stratergy that I use.
I know this is a forex forum, but I use this stratergy purley on the UK Stock Market Only!
My trades are a combination of Price Action, Volume, Support and Resistance, and using the stochastic. I’d off been using the stratergy for 2 weeks on friday, and so far I have made 9% on my account using it. My target is always to make 1% a day.
Anyway, I work full time, so it is hard for me to do Forex, so I focus on the UK Stock Market.
The thing is, I usually always get out of trades as soon as I’m on the 1% for my day. Even if it could go further. I do this because 95% of people who go on the stock market fail. One of the reasons people fail is because of GREED!
I’m doing my best to control my emotions and not get greedy. I just want to hit my 1% target on a daily basis.
So far, my startergy has been great, this week alone I’ve won 8 out of 8 trades. However I’ve never really been in a position with this stratergy yet to test a losing trade. This is my concern, if I get stop lossed out of a trade I will lose between 1-2% with my stratergy. If I’m winning though, I take the 1% as soon as it comes, with this sort of trading I most likley need this stratergy to be winning 90%+ of the time, to be working for me in the long run, as my biggest fear doing this is seeing a winner turn in to a loser.
Do you think this approach will become a problem in the long run or not?
(Sorry it’s about the UK stock market, I don’t know any other place to post this)
It’s always a good thing to have a minimum risk reward of 1:2.
That way each win is worth atleast 2 losses.
Losing 1%- 2% Everytime but winning 1% makes losses harder to recoup?
And after a 2% loss you gotta make more than 2% to come back to what you were before the loss?
If your strategy works well for you and is successful, go for 1:2.
You’ve doubtless heard the well-known trading dictum “Cut losses short and let profits run”? One of the (many) reasons it’s so apposite is that another almost equally well-known trading dictum (“Nobody ever went broke taking a profit”) conceals the reality that many people [I]have[/I] gone broke taking a small profit when they should have held on for a bigger profit.
I’m afraid I do; yes.
But it doesn’t matter what I, or you, or anyone else thinks: it matters what returns and profit factor your first 250-300 (not “your first 8”) trades show. Until you know at least that (perhaps from a demo account?) it isn’t time to start thinking about position-sizing.
I think this statistic may apply to leveraged products. However, non leveraged long term stock market investment is not the same. People who invest or even trade in stocks, have a higher chance of success, since stock market investments is mostly non-leveraged, and since it is mostly bullish in a the long run. Not to mention the existence of investment institutions, pension and insurance funds that are considered the grounding of the market, without them the markets would be much more volatile, as is the case in some emerging markets.
