Hi Everyone.
I used to trade forex a few months ago using the forex.com Trader Platform and have lost about $750 in total, by putting in $250 at a time.
However whenever i practice using the $50’000 demo account, it was harder for me to lose and most likely never run out of margin and easily win with $50’000 rather than $250 because of the margin limits.
So i wonder if i had really deposit $50’000 real money into the forex platform, would i be able to win that easily just as i expierienced using the Demo account?
Would it be a good idea for me to deposit $50’000 right off the bat to start? Getting just 5-10 pips a day would be good for me.
Any advice will be greatly appreciated!
If you deposited $50,000 and only traded with 1% on each trade, then making “more” money would be easier, because you would be using bigger lot sizes, but if you are not getting a margin call, and not making money with $ 250 dollar accounts, and still using the 1% per trade rule, then it would make little difference that I can see…
Try using micro lots, I have a micro account started it with 200$ using .01 lots. it has doubled in its first moth, working to double it this month again using .05 lots. just dont open too many trades at the same time, one or two is enough. I Hope this help.
Jado911 - That is pretty impressive, can you share what your trade plan is?
You are relaxing your money management criteria, going from .01 to .05
Why, is it because you are more confident with your trade plan that you can become a little more aggressive?
NO, a larger account does not guarantee winning. You can have the same amoutnt of winning/losing trades with a $5.00 micro accound as you can with a $500k account.
You lost your live account because either A: you are a bad trader or B: you were trading far to large for your account size, Or C: both.
I would bet it’s mostly due to B with A mixed in their in the form of you don’t really have a solid trading strategy.
If your account is $250 how much are you risking per trade? Or, how much is each pip worth. IMO, try dragon33’s money management and trade with a micro account.
Basically divide your account by 400 and that is the pip value you should be trading for the day. If your account goes up, recalculate the next day and compound. If it goes doen recalculate so you are only risking x amount. This is also based around -20 pip stop loss, so work your own risk into this.
Also, start a trade journal to document your trades. Document everything, why you got in, why you got out, how you felt, if you obeyed your trading rules or not. I’ve found a well tracked trading journal points out your own trading faults very easily and makes them correctable if you are honest with yourself.
Don’t put 50K or any amount of money into an account that you are not fully prepared to lose. Would go into a deul with an expert swordfighter simply because someone gave you a larger sword?
That�s great information you wrote. There are no guaranties at all with the size of the amount, you just have to looking for a broker with good reviews, that�s all.
A broker with good review!!! That doesn’t guarantee you won’t lose your account. You can still trade your account away with bad trades even if you have the most reputable trusted broker.
The idea is to have a risk strategy to manage the money proportional to the amount you put in and I agree a larger account doesn�t guarantee you will earn more
A trading journal? Would you mind explaining how would that work. Please don’t get me wrong here, but I’m really curious how is that going to help make your trades more profitable. Now in regards to the amount of your initial capital on your live account, I think it depends on how your trading plan is, you see if you have one, it really doesn’t matter. I fact it doesn’t matter at all, as long as you have your analysis well developed and you know that your strategy is going to work.
I guess nothing can guarantee you won’t be losing your shirt. Unless you have a good plan, and risk management strategy therefore the question will be which one will be a winning strategy?. So even you open a $500 or $20000K if you don’t know how to trade them, they are worthless. So let’s focus on what’s important.
Each trade you place record it in a word processing program. Write down things such as: why you got in and out, did you follow your plan or did you change it at the last second. did you stick to your stop loss. If you won why do you think you won, if you lost why do you think you lost. Record emotional state. This helped me identify when I was chasing price, not following my plan and reacting to emotions instead of trading my strategy.
BUT theres also a little problem ---- if you havent a clue as to what youre doing, the larger account with larger margin “cushion” will keep you alive MUCH longer, as it takes a true pro to make a small account work in this present whipsaw marketplace.
a pro can easily double a 50K account in a month, if not less, but its a whole lot harder to do that with a 500 - 750 account, although myself and other pro’s have done it (if you know what youre doing)
its not a matter of size (well, for 10% of the population, it is !) but of WHAT you do and HOW you do it.
but in the abstract, YES — opening a 50k account will keep you alive LONGER and you just might possibly come out ahead over the very long haul !
enjoy and trade well
mp
[B][I]It is impossible to defeat an ignorant man in argument.[/I][/B]
Tottally incorrect. With the ability to trade frational microlots you can limit your risk very easily. 1-5% is still 1-5%, it doesn’t matter how large or small the account is. It doesn’t make it any easier to grow the account or keep it alive longer. As long as you trade a size that is appropriate for your account, and only risks a small percentage of the current balance, you can have a huge cusion regardless of if you a $100 account or a $100k account.
I started a little $100 micro account and am risking 5% per trade, I’m up 40% in about five days of trading. If this is any indication I don’t think size of the account has anything to do with how hard it is to double it. I trade 5% of whatever my current balance is for the day. So, if if I’m up i’m compounding. I recalculate every day, and if I lose 3 trades in row in one day I either quit or recalculate down.
I’m a total noob, and in no way a pro. I’m using simple money management and tips from a few different systems.
If someone doesn’t have a clue what they are doing they will blow out any size account rather quickly. Someone who doesn’t have a clue wouldn’t even be using money mangement or use the concept of only risking a small percent of their account per trade.
I have to call you on this, because I think it’s total BS that noob traders shouldn’t trade until they have Xk to trade with live. Undercapitolization is only an issue if a trader tries to trade huge lots with a small account, which obviously won’t be able to weather any type of draw down and cause margine calls when the trade simply breathes.
All a large account will do is induce and magnify all the negative/positive feelings new traders have to learn to not allow to generate in themselves and effect their perspective of the market.
I’m currently trading at .35 cents a pip. I’d have to be hit for a -400 pip loss in order to blow my account. My usual stop loss is -20 pips, depending on where the trade is. With TP of 20-30+ depending on where the trade is at. I currently am pretty consistant winning 7 out of 10 trades. So, do you think I have plenty of cushion?
Yes, I do. % wise I have the same cushion I would on a 100k account. The actual monetary value I make or lose is just considerably less, but it’s the same percentage of a whole.
IMO, even if 1,000,000 of your own money isn’t a big deal to lose a noob trader should start and learn from a micro account and work their way up. If you can work a micro account up to a decent size, and it wasn’t done by trading huge lots and getting lucky, then that is a good indication that the trader is developing skill and a real edge.
I don’t know about you but I’d like to have skill and an edge before I opening a 50k account and trading serious money for the first time.
Hey MP,
I definitely respect your opinions. I was wondering why, at the end of the day would the number of dollars in your account matter, if you always trade on %.
In the math I am using (not always the right math by the way), trading on a a $50K account is no different than trading on a $500 account accept instead of trading 1 lot multipliers, you trade .01 lot multipliers. Do you think its is mostly psychological? Another words, risking $100 is easy but risking $10000 on a trade makes anyone think twice?
You answered your own question. Mathmatically if you stick to your money management it makes no difference. When trading higher monetary values it’s easy for a trader to project on the market thier fears and expectations, instead of just seeing what opportunities are their and taking them with out preconcieved prejudice.
I have posted a signature often that simply reads - - - - -
[B][I]“in theory, theory and practice are the same — in practice, theory usually blows up !”[/I][/B]
IF, IF, IF, IF, IF ---- lot of ifs in all this, BUT while one can certainly increase a small account into a big account, its the old saw of “it takes money to make money”, or more real — Donald Trump would have simply been a slumlord if his father hadnt left him a few million, which was easier to increase then a few thousand !
while ive been trading for 20 years, i cant say i know “everything”, but i have made more mistakes than all of you combined on this thread, but I REMEMBERED THEM !
This “Remembrance of things past” has been my saving grace and what i pass on to the newbs here — nothing to sell, but a lot of past information to give away !
most of this is really addressed towards newbs and demo’s for which i wear a pet peeve (similar to a ferret, but smaller !) and that is how they open 50K demos and do almost decently yet when they open a 500 dollar real account, they blow it in a week !
the mistakes one makes on a 50k account will let you get away with murder often, but a 500 dollar account (and HOW many newbs REALLY FOLLOW proper money management until they lose a lot ?) reigns you in tighter !
the simple fact is that newbs WONT always follow good techniques of money management, and where theres a lot of room in a 50K account, you dont get much in a $500 account.
ITS NOT THE THEORY THATS WRONG, JUST THE HUMANS WHO TRADE THE SMALL ACCOUNTS !