Hello to everyone,
I would like to ask a question on pip values to aim for, I am thinking of opening an account with oanda, I have used their platform and others for many months now, whilst reading and learning all I can. If I open an account with 3000$ then with a leverage of 50:1 and using sensible money management techniques, I calculate I should be aiming for 50 cents a pip. Is this about right or am I being overly cautious. I would like to stay the duration, and not blow it all in a few misguided trades. I cannot afford more. A divorce left me homeless, bankrupt and without my business 3 years ago. Oh, by the way, have just read a posting on ages, and I am 47, guess that makes me a pensioner by your standards. I am willing to learn from all ages, so advice please. Sorry for rambling.
Hello to everyone,
That depends on your style, but I assume your using < 1%, since your trading with $0.5 a pip, and you seem like you know something about money management from your last post. But I would demo first at least to get a system, because you want to minimize your losses in the beginning when you start. If you go in without a system that’s just like buring money, even if it is a small amount in comparison to your account. I blew out my first account because I only deposited like $300 and traded $1 per pip. The amount you risk per trade will determine how long you can trade until you blow out your account. The way I see it is it is better to be overcautious then partially cautious. But, that amount would most likely keep you in the game for a long enough time. Since your going live you will experience butterflies in your stomach everytime your enter or are in a trade, but you probably experienced that from the horseraces right. As far as I’m concerned that is a reasonable amount to start with. best eh!
when you decide how much value to put in every pip, you have to take in to account how wide your stop loss is gonna be. id say never to risk more then 1-1,5% of your account on any one trade. if you think that for any given trade, a 30pip stop loss is appropriet, then divide 1 or at most(according to me) 1.5% of your account with 30 and you will end up with the maximum value per pip you can trade without risking more then 1-1.5% of your account. remmember that you dont have to, and maby should not, trade that big amounts all the time.
if you give your trades very large stop losses, 0,5usd per pip can whipe out 10% of your account. and if you trade with very tight stop losses, maby you could trade bigger lots without risking all that much of your total account.
Thanks for the replies, yes money management is something i am comfortable with, and butterflies every time a horse runs is not unusual, but gets less as the betting bank gets bigger, however I maintain that a small amount of fear keeps me from being reckless and betting the bank on an odds on favourite, I know is going to romp home.
I know the forex market is more system and analysis based than my normal business, but would like to try…
Thank you both once again
I think you’re on the right track, Chris. Better to start a little conservative. I think your gambling experience will pay off here. You can apply some of the same game theory and bet management tools in your trading. Best of luck.