I’ve known about forex for only about a month. At first I was trading on the demo accounts with 50k. After several “bankrupted” demo accounts, I finally started to get the hang of trading. I learned about things like MAs, MACD, candlestick patterns, trends, resistance, support, breakout, pullback, fibonacci, etc…
I was able to turn 50k of demo money into over 100k in a few days, so I decided to try it with real money but turned out that trading with 500$ is much different than trading with $50k. I got to around 850$, but then I lost it all in frustration. After that I went back to demo accounts again and I started doing well again on demo. So I deposited another 350$ and lost it again…
Now (well not right now because it’s weekend) I am trading on a demo account again. Because demo accounts are all 50k I had to first do several losing trades accounts to get it down all the way to around 500$ because that is realistically how much I will be depositing when I can be confident in success. So now I am at around 890$ and seem to be doing well… I don’t know why I always do bad on real accounts but fine on the demos. Probably because I get all intense and whenever I see even a little profit on the real account (even just 5-10 pips) I close the position, while on the demo I often just open a trade, put my limit and stop-loss and leave the computer alone for a while. Anyway that’s just my little problem and I need to deal with it in a good way next time I trade with real money.
But I am kind of afraid to trade real money again. I don’t know if I am ready. What would be a good way to see when I am ready to trade? I am thinking something like. Getting my 500$ demo account to around 3000$. If I can do that on 3 demo accounts 3-5 times in a row, it probably means I am ready to trade real money. I am not in a hurry anywhere, I can take whatever long time I need to practice on demos (I learned from my 2 mistakes of trading real money too soon). What do you guys think?
That question there is definitely a self fulfilling one, where there will not be some sign or specific task that you must complete before you know that you are ready. On the other hand sheer experience is one of the best indicators somebody can have on their side. It seems like you have emotions that need to be checked before doing anything serious. These emotions will always be there but through experience you learn how to control them through the confidence you get of observation. Long periods of watching those candles go through there motions will spark pattern recognition and confidence in knowing how to play those patterns for your benefit.
[quote=Lakontis;105866. Probably because I get all intense and whenever I see even a little profit on the real account (even just 5-10 pips) I close the position, while on the demo I often just open a trade, put my limit and stop-loss and leave the computer alone for a while. Anyway that’s just my little problem and I need to deal with it in a good way next time I trade with real money.
quote]
No, its not a little problem it is THE problem. Until you can deal with this you will have great difficulty in profiting in the real world. Everytime fear causes you to close a winning trade you are breaking one of the cardinal rules of letting your profits run and making all your demo time irrelevant
I would go back to the drawing board and take a look at your system, chances are your not following your rules, or maybe you don’t have the rules you need set in place to follow to begin with. Especially closing trades too early. That’s a bad sign. You need to follow your system to a T in order to tell how effective it is, otherwise your running in circles and you will never grow as a trader.
Definitely take a step back and re-evaluate your system. It’s easy to get a few big wins on a demo account and have it cloud your judgment. But, if your not managing your losses correctly, and aren’t following your system to a T, to how much % of your account you invest in each trade, to your reward:risk ratio, to how tight your stop losses are, to when to enter a trade, to when to exit a trade, etc. You need to have these “rules” set in stone before you go into the market. And you need to follow these “rules” to move forward, I can’t stress that enough.
Re-evaluate your system and your goals, and start from ground zero. Once you have a system you can follow to a T in a demo account, and you are very confident in following that system to a T, you can then try trading live again. And when you trade live this time, trade small amounts, this will allow you be more flexible with your stop-losses, takes the emotion out, and work your system that way.
A month is not a long time. I know people who spend months and even sometimes years mastering their routines, it’s not a quick process, it takes a lot of time and a lot of sacrifice.
Right now your gambling bro, and that’s not good.
Don’t worry about your current losses right now. Your going to lose in this market. But if you never learn to grow as a trader, and you keep making the same mistakes by gambling, your losses will put you in the ground, believe that.
Don’t worry about your current losses, put them behind you, and just STOP what you are doing, don’t open another live account until you are ready. But you must STOP what you are doing right now, just STOP.
Take a big step back and go back to the drawing board. One month is no amount of time to go from just learning about Forex, to trading live. Try a year!
Don’t be another stupid gambler trying to get rich quick, because you will go broke. Don’t be another failed statistic.
Educate yourself.
What they said about emotions is very true. You absolutely have to be able to be objective about every trade and think in PROBABILITIES, not emotions and or how you’ll feel when you win or lose. You have to be able to accep the loss of a trade before you even enter it, or that along will start screwing with your head.
As far as technically when to start? You should develop your own system on demo first. Measure the win/loss ratio over a sample size of 20- 100 trades. 100 if a very short term 20 if a swing type trader. Actually though, in either case, 100 sample size is better, it just takes longer. Over this sample size you must always place your trades using the same paramaters. Otherwise the sample size is rendered null and useless. You have to either start over, or admit that you’ve changed your trading strategy and start over with the new parameters, or admit that you really don’t have a planned strategy and are just pushing enter.
For example: enter after stochs are in overbought and then head back down to neutral and an inside bar pattern appears or a hammer or shooting start. (Don’t use that just some BS i’m spouting off the top of my head) You get the idea though, use very spcific things for entry.
What this tells you is if you actually have a definable and repeatable EDGE. You should write down every trade in journal to make sure you followed your system, and so you can track mistakes. Some losses and wins will be because of user error.
So, lets say you follow a system and get 75 wins for 100 losses. That would be a great win/loss ratio. It would be very tradable provided your losses were not so big that they wiped out the winners. The easiest way to do this is to have your SL be the same as your TP, and tweak the system so you still have the 75 wins.
Noob traders will sometime do silly things like have a 10 pips SL and 100 pip TP. All that is doing is stacking the odds in the favor of the trade losing. It only has to move 10 pips against you to stop out, but 100 to see profit.
If you are patient, you’d be smart and run the sample size again a couple of time and see just how repeatable it is.
If you decide to try it live, first trade the smallest lot size you can. .01 cent a pip if you can. This way you can try the sample size again live, without much risk. If you stick to your system and find it’s working as tested in demo, gradually ramp up and compound your pip value.
P.S. some brokers do allow you set up demos at a particular money amount, as a small level. At my broker IBFX, you have specify micro account and set it up for the amount you want, otherwise it defaults to the 50k amount that screws so many into thinking they have the juice.
Just my two cents from another newbie…
The School of Pipsology recommends that you paper trade for at least 6 months before putting real skin in the game. I started 2 weeks ago. I too have made huge gains and then lost it for the same reasons. I find myself exiting winning trades too soon and staying in losing trades too long. I got one demo account liquidated last Friday after running 50K up to 125K in about one week and back down again in one day!
Psychology is probably the most important aspect to master of any kind of trading. The best trading method in the world will not work if your psyche gets the best of you. I recommend that you get a book called ‘Trading for a Living’ by Alexander Elder. He is a psychiatrist who breaks it all down.
Good luck.
Get A dry erase board, write down your system on it and place it somewhere you can see it all the time. write down the mistakes you repeat all the time. one of the things I wrote on mine "stick to your original SL"
along with other mistake I do like jumping on a trade before I get the go signal.
good luck to you
Jado
r u consistantly making profit weeks after weeks ? 