I find myself in a position of bad choices. I mad LOTS of noob mistakes. My vary first trade was to say the least a vary good one “IMO” 105 pip at 1 dollar a pip. Soon after I got ****y and lost 200 of my 500 dollar balance. Just yesterday before the EUR/USD made a 100 pip a climb I bought a sell instead of a buy. “oops” I know vary noobish! Though such things were expected.
My question is I have 3,000 to put into a forex account and believe that my broker maybe scam “fxsolutions” after having researched more. I do not want to risk losing all my savings and would like to know more about managed forex accounts. Are they legit, profitable, costly, is it possible to say consistently withdraw 1,000 dollars monthly from such a account after having established it.
For a more location oriented question. Does anyone have advise as to how a us citizen pays taxes on forex generated income?
i dont know how regularly 30% roi per month will happen. especially to whcih degree of risk that needs to be taken.
it is possible to get your account traded on your behalf. i am just entering that part of my forex development. with regards to tax. it is possible to open an fx ira. and you can actually fund the account from your exsisting ira or even 401k. and that move across would be without penalty. as long as the money is in the account, it is tax free.
The idea is to establish the account for 4-8 months first. Estimate a 20% ROI is achieved.
$3,600
$4.320
$5,184
$6,220
If my calculations are right, not all that good with math so might be wrong. In 3 20% sessions I would be able to withdraw $1,000 a month. If 20% is achieved. My ultimate goal is to buy a house with forex earnings within 5 years.
Does anyone know where to find information about having a pro trade for me? My reason for this is I have a micro account already to learn with and want to earn more.
Do yourself a favor a trade a micro account of not more than $100. It sounds like you are very fresh to trading, dont have any sort of trading plan or concept of risk managment or moneymanagment. Thats just a recipe for losing $3000.
Either learn or develop a trading plan. Then test it on your live $100 micro account. If you can’t compound that and build it, you can’t compound an build 3K.
Don’t let greed and or being exciting about making money trading fool you into trading large amounts.
Any sort of trading plan you have has to have: A good risk/reward ratio. At least 1:1 or close to it. A good win/loss ratio. You WILL lose trades no matter what method you use. The losses have to be managed, and you should have more winners and the winners should be at LEAST as large as the losers.
Don’t risk ANY money until you’ve developed a method with a recorded win/loss ratio and average winnner, average loss. Use a sample size of at least 20 trades. From that you can figure if your method is profitable or not.
You need to know how make a good entrance a good exit with profit or loss, and above all else you need to control your risk. If you are risking more than 3% per one trade, it’s generally accepted that you are over leveraged. If you risk too much per trade your losses will cripple your account and you will forever be trying to make your money back instead of trading into profit.
If you can profit 3% for every winning trade and win often and compound it, you can make some very good money. Do yourself a favor and put together a spread sheet that compounds 3%. Put in whatever the size of your account is. You’ll see that if you have a good method that wins often and the wins are equal to or better than the losses, you don’t need to overleverage and make crazy stupid trades to make money.
You lost 40% of your account in 1 trade!!! Imagine if that was your 3K how pissed you would be. You have no risk control/moneymanagment in place DO NOT trade anything larger than a $100 micro account until you understand these things and can do them.
P.S. I am not familiar with your broker but mine, (IBFX) is a very good one for mini accounts.
P.P.S. 1K a month from 3K is possible, but for a new trader extremely improbable. That is approximatly a 33% return a month. Pro’s who are considered awesome day traders don’t do that. (without compounding that is) That is Huuuuge return and frankly you aint gonna do it before giving up your 3K account. Trust me learn to COMPOUND (after you actually learn how to trade) that is where good traders make real money.
I’d like to add you are trying to figure profitability and equity curve on just what you are hoping to achieve.
You can’t build a trading method like this.
[B]You have to find your trading edge FIRST[/B], have it proven over a sample size of trades. Then you fit your expectations (equity curve) on what it’s shown it can do.
Otherwise you’ll be trying to force x%/win in pips out of trading methods that can’t produce them and ruining the edge.
I am a new trader and just starting to become profitable…I haven’t really taken a huge hit on my account yet because I don’t overleverage. Just 2% is all it takes. Trust me it adds up. Just do some calculations to see what I mean. I also don’t have a big account right now, but after being profitable for a full month consistently (almost every day), I am finally thinking about adding capital.
I would recommend making a similar plan…hold off on whatever you consider to be a large account until you make profit consistently. 95% of all traders lose money, but nothing is impossible. With dedication, anybody can make it work. It is not a get quick rich scheme so if you want to buy a house you are gonna have to have some SERIOUS dedication.
I have no intention of trading with more what is already in my account. Actually after posting this thread I researched to find out what went wrong. My conclusion is I need to develop a system, test it, stick to the rules, and get back what I have lost. The simple answer to why I lost so much money is because I got greedy.
You’re too eager. Slow it down. Save your $3000 by first proving you can be profitable with your $100. Trust me on this. Sure you can afford to lose $3000, but do you really want to?
Listen to this, its all about risk management, and win/loss ratios… forget about pips, also daily goals I think are also crazy. Striving for a daily/monthly goal will make you enter trades that don’t fit your system. Have a goal of I will spend X hours looking at the charts, and trade if and only if the trade fits my system (that includes risk/reward ratio).
the fx360 app has a great article “Manage Risk Like a Pro”
From this you can see if your money management is correct you trading plan could loose far more trades than it wins, yet you still come out ahead.
I am a total newbie as well, I will start trading a $500 account in the next couple of weeks, but I have read / watched so many videos, and focused my “education” on strictly the “basics” like money management, price action, support resistance, trend lines, and fibonacci.
Also you need to really document the trades you make that way you can constantly look over your trading log for mistakes you made, or ways to improve your system / money management.
You should always have a stop loss when your first place the trade, this prevents you from holding on to a bad trade “hopping” it will turn in your favor. Proir to making a trade you access your risk/reward ratio, so you know your risk (Your stop loss point).
Last piece of advise would be to only risk 2-5% of your trading account on any trade. If you risk 3% you would have to have 33 bad trades in a row to loose your account. Really your mindset should not be about the gains, but rather mitigating your losses.
Johnny if you only take in one thought out of this entire thread this should be it:
[B][I]To be profitable in trading you need an edge[/I][/B]
Don’t worry about any perecentage or pip goals until you have a proven edge.
What is an edge?
[B]win/loss ratio[/B]: postive … you want upwards of 6 out of 10 trades to be winners. The higher the better. Edges with lots of losers, but large winners that make up for it, are very hard to want to keep trading.
[B]risk/reward:[/B] postive or even. At least 1:1. A good edge will have a build in way to let winners run so that you have a posibility of very large gains while locking in initial profit that equals intial risk. It will also tell you where it is reasonable to put stops and TP or lock in profits.
On the flip side if you have lots of winners, but the losers are very large you could still be losing money. This is why R/R W/L are very important factors in the edge.
[B]Money manament:[/B] What you will risk per trade. Generally that is 1-5%. You never know when the losses are going to come so risking more than 3% is… risky. Also, when and if you compound. For intra day with multiple trades I don’t compound/decompound until the next day.
The method or way you enter a trade, wether that is fibs or moving averages is NOT the edge. That is the entry/exit method and only becomes part of the edge after everything above is proven in the context of the entry method over a sample size of 20-100 trades.
Once you establish that an edge is repeatable within an acceptable margin of error, you can trade it and make money.
This is a HUGE thing you must understand. Most noobs lose money because they are looking for a, “trading method,” not an edge. They flit from one thing to another often after just one badly managed loss, looking for a can’t lose method.
I know, but 8 months ago I did the babypips school, and forums, and started demo trading, I kept trying to work a system with all kinds of indicators on my 15 minute chart. I stopped all trading due to time constraints, I now have the time needed to devote to giving this a serious go. This time as I was refreshing a light went on, and I truly believe the “basics” is all thats needed and to truly be successful over the long run, I need to trade the dialy/4hour or fastest 1 hour.
I think that most newbies go down the path I did, and go straight to the 5/15 minute chart with “the holy grail”, and end up blowing their accounts. All the pro’s you read about, have very little on their charts, trade larger time frames, and trend trade and or break out trade.
I am not saying scalping can’t be profitable, but I think over the long run its harder to maintain profits. I also think for a new trader to go straight into scalping with how fast it is, feels like gambling…
Who know I could be kidding myself with my thoughts, time will tell as they say.
Also wanted to add somthing that did not click for me at first, but if you only trade with proper risk-to-reward ratio’s say 1-2 + and your risk say 3% per trade, if your trade is successful, your account goes up 6%+ not 3%… I don’t know how it did not click for me at first but it didn’t, I wonder how many more this does not click for, causing them to increase their risk?
Here is my plan. Risk no more then 5%, find the edge, and I’ll be staying with short time lines 5-15 min. This is what I want to learn, the whole reason I started learning about forex is its something that I can watch all day. I have the time most here do not. I can literally watch charts all day if need be. I’ve also been re reading the school of babypips.com. To learn as much as possible before risking any more money. Besides the fact that waiting on a 1 hour or daily chart would drive me completely bonkers. Again thank you all for the advise/info and I’ll be sure to post my next few trades. We shall see how it goes.
