I'm a newb

Beginner Questions
1

I have been trading a mini-account at FXCM for 45 days now with some success. Prior I was using the same methodology for about 30 days in an FXCM demo account with success.

Basically I am just using some very simple technical analysis on one minute charts, making certain that I don’t go against trends that are evident on the longer term charts.

I started out scalping the market for 1 pip returns during the demo and for about the first 15 days of real trading, but I have since started letting my profits run and this strategy has suited me well.

I started the account with $500 on May 8, and it’s now $1126.

This type of return scares me. I don’t think that type of return should be sustainable, therefore I must be risking too much or something.

I started out trading with a lot size of 10k with 50:1 margin. After crossing $1000 I moved to 20k with the same 50:1 margin.

I don’t set a stop, I basically watch all of the trades that I’m in constantly. I also rarely exit positions early. I typically wait until the market swings back in my direction in the event that my technical analysis failed. My maximum draw down was about 38% from June 6 - June 8, but I didn’t close my position. I just held on to it. My position rebounded on June 9th netting me a large profit.

I have on occasion entered into a second order on a position when the trade went against me, in order to lower my net position and marginalize the amount of time that it takes for the market to rebound in order to make the trade profitable. This I understand is risky because the market could feasibly sink even lower.

What do you guys think? Any advice?

2

No stops and waiting for the market to come back to profit? How could that possibly go wrong? :rolleyes:

Take a look at the charts and see how far against you the market could go. The answer is WAY, WAY, WAY against you.

You’re playing with fire.

3

Agree, you could get (stay) lucky and triple your account but from what you are describing, it looks like a blowout could come at any time. Way too much position size for your account size as well.
I’d suggest moving to FX Solutions or MB Trading and trade a micro account. The results will not be as spectacular but you will learn as you go with way less risk of blow-out. Just my 2 cents, since you asked… :cool:

4

I should stick with the 50:1 at 10k with my account size?

If I only have 10k in at a time, with $1,000 in my account, my required margin is $50. Therefore I’d have $950 that could be used to move. So the market would have to move a whole 950 pips against me to blow up the account right? I don’t see that happening too often looking at the charts.

5

Are you quite sure about those figures?

You are gambling quite well, confidence is a wonderful thing,
over confidence though? Come back when your account size
is $10 0000.

6

Listen to Johns advice. You are road kill just waiting to die. Sorry to be harsh but any fool can make high profits by taking high risk but high risk means exactly that, whether tomorrow or next year you are gone. Did you know that American banks lost more money in 1982 than they had made in their entire history - think about that and read all you can on risk. Taleb is a good place to start

7

I believe MBtrading no longer has micro or maybe its just me who no longer can trade them since I used them quite a lot… but there are other companies such as Alpari and Oanda…

Yeah you are risking way too much, all because you have the power to leverage does not mean you should

I trade like this… I always figure out how whats my maximum risk on any trade and it is always less then 1% of the total account… then I calculate how many lots I can trade (this is why I like micros since I can trade ex 1.5 mini lots)

if you keep on trading like this you are going to give all your profits back to the market and then some…

8

I don’t have the option of trading smaller lot sizes or lower margin with FXCM.

9

To Deron :

You are still learning and congratulations for trying. :slight_smile:

I have been on this forum a while now and I see that you have had the best experts and veteran traders post back to you namely Rhodytrader, Daydreamer65 and Tonymand. (There are others but they have not posted).

Rhodytrader, beat me to it by telling you that you need a stop loss, confirmed by Tonymand.
Daydreamer65 has told you that your leverage is too high.

These people know what they are talking about.

In addition, I am going to tell you to get out of the 1 minute time frame - you are only trading noise, not trends.

I am a retired school teacher, therefore, know about the psychology of learning.
I know that there is a people who do not take advice - they are unteachable.

They pay a terrible price - self destruction.

[B]See to it that you are not one of those!! [/B] :eek: :frowning: :eek:

10

Wow, Tony, you do come up with some interesting facts!! :slight_smile: :slight_smile:

Banks are not so smart after all !!

I will remember this for future reference!! :slight_smile:

11

I was also surprised Tymen, its from Talebs book and really brings home the lesson of risk.