I’ve been learning with demo for the last 8 months. A couple of weeks ago I decided that I was ready to go live with money that I could afford to lose.
That was when the virus outbreak was still mostly isolated in China and other Asian countries, and before the markets became risk-adverse.
I intend to swing trade based off price action strategies. I thought about waiting out the outbreak but know it seems unlikely to finish any time soon and I honestly don’t want to wait for weeks. At the same time I recognise that deciding not to trade is also a trading decision.
I do see entry opportunities on the charts but I just wonder if/how any traders, specifically price action traders, have altered their strategy and if you have any advice.
So if the Virus becomes a Global norm like HIV you will you ever trade?.
Remember you not trading the Virus, you are trading the market currencies, so as long as you see an entry it means your strategy is good to go, regardless or what’s happening in our day to day lives.
Funny, I am exactly in the same place. After long time paper trading I decided now is the time. But a large part of my wannabe trading is discretional and (annoyingly but perhaps a good thing) I am not getting any signals in this recent virus madness. I am sure there are pips to gain in this situation but since my rules are saying no go I have to stick to no go, or devise another set of rules and that would take a lonnnnnng time. But as @Dunitheinvestor I think suggests a good trading procedure either should be valid in any market climate or keep you out of it. Sorry I don’t think my post is terribly helpful but I felt compelled for being in such similar situation.
Good question. My strategy takes into account the ATR and uses a function of it as a stop loss and sets how much capital a trade could lose. Also I set up predetermined TP (profit) targets, though I may not wait to hit those targets, I mostly do. Now if the ratio of risk (trade loss) to reward (trade profit) is too low I don’t take the trade because it is not worth it on the long run. Right now it is working out that the reward to risk os too low, so my system automatically takes me out the market.
I have been lucky enough to have a good run of profits, now it is protecting me from losses. It’s a mathematical ratio, I can elaborate more if you would like, but the basics are risk to reward. The daily range of prices are too high for my system, even though the price action offers opportunities, they are not good enough for my tastes. I like big profits for small risk. Give me the steak and leave the chicken wings for others.
Go for it! Just start with minimim lot sizes. Go with 0.01 for a few weeks. That way, you are live, but completely manageable. That said, it is a crazy time to get in!
Risk management begins with preserving your capital. The current volatility is very unpredictable. You never know when Trump will hold press conference or when a Central Bank will hold emergency meetings to cut rates or any other crazy news. I’d suggest to wait or if you can’t wait, begin as small as possible with large stops.
Just for demonstration what’s now possible:
Especially the indices move for several hours and minutes in one direction consistently. If you notice that you can ride the wave on the upmove and downmove - only small stake!
And the party is still not over.
Buy I would not recommend that kind of trading to absolute beginners.
Upmove:
Thanks for all the advice! After being left unemployed due to the outbreak, I will be sticking to demo.
I’ve found a few viable and profitable trades by (1) widening my stop loss with ATR which increases my risk but keeps me safe from the volatile moves (2) focusing on higher timeframes (3) taking a sentiment-based approach whereas before I was mainly technical.
I have all the time in world now that I’m at home but I still can’t bring myself to scalp or day-trade, I just focus on swings.
starting live/real is not easy for most ,the markets are very volatile at the moment especially the indices with big moves or exceptional swings in a day.This can provide alot of profits for an experienced trader but can be a poisoned chalice for the novice
bro, its comforting to know someone out there shares the same story as me. I just want to share mine and encourage you.
Having been recently furloughed @work, I’m still stuck with demo trading for the past 1week. I’ve made over 11 trades now, all are correct and winners, however I use just 0.01 PS as I risk just 2% of my capital, nothing more. Since my demo capital isn’t much either, I set my stops moderately, mostly using the high of the trading if i’m shorting of low when buying. my entry points are were I give much attention too and you too should. there are many methods of choosing an entry point, but I choose to use 1 or 2 pips off the close of the previous day, that tells me that the market is essentially willing to buy higher or sell lower than the previous close. Trader discretion is however needed here. Most times, the price would initially go against me, but having a low PS and moderate SL keeps me calm, even with demo capital.
And again, I start trading by 8am GMT+1, by that time, the trend for the day has already become obvious, so I just key in with the market and take whatever its willing to give me.
Hey GM.
I also been with demo for 8 months and not comfortable going live but feels little it’s the time.
Do you believe during this pandemic is the right time?
T.O.
one characteristic of the forex market is that you can trade both sides of the direction ie there is never a “perfect” nor " wrong" time to start.
Having said so, you need to understand that during times of regional / global crisis, sentiments may be fickle and volatile. ie one moment USD is gaining across, next it is dumped.
forex trading in my opinion is all about proper money management, technical analysis, fundamental analysis and understanding the current sentiments + undertones. ie you dont really depend on when or what but rather yourself, your skills and methodology.
It’s certainly not the most transparent opinion right now. I can see that all traders are divided into two groups. Some of them see great opportunities for earning now, others do not understand how to navigate in this strong movement and just observe the market.
