This is what I also follow. In fact, I never risk more than 2% per trade. I have had a hard time earning from my previous job and I can’t let it go so easily. 50% is a very high risk that @Brian here has been taking.
Exactly what I believe! It’s true that risking more will get you better profits. But that shouldn’t come at the cost of you risking everything you have. Trading is a risky business and you do well when you can save money to trade for a longer time. Trading today and not being able to trade for the next whole year won’t make anyone a profitable trader.
I would call you lucky because you have been making steady profits after risking this much money. But that doesn’t mean that it is how it should be done. You must think of trading for a long time instead of now or never.
50% is a big amount to be risked per trade. You are the first trader who has been doing this for quite a while and still trading. You would be really lucky with your strategy. But this is not what most traders would recommend. It’s risky and can destroy your career. Sorry for being rude!
I believe that’s what any smart trader would do. While we were learning, we read it several times that we should not risk more than we can afford to lose and that probably comes in the range of 1% to 5% per trade. Talking about calculating take profit and stop loss, the simple formulas I use are:
Take Profit = opening price + price change in points.
Stop Loss = opening price – price change in points.
5% per trade is way too high and the fast track to blowing your account. If you have four open trades at that risk it would be risking 20%. And believe me, consecutive losing trades are quite common as are profitable ones. I lost 13 different consecutive trades on one day that taught me a lesson which took me months to get back to profitable.
I would suggest the reading should have meant not more than a 5% daily risk maximum, which could be manageable.
I completely agree with you. As long as you can measure the risk, you can manage it. You should not risk more than a small percentage of your total capital. I think 2% is a good percentage to start with. This could mean that you can be wrong several times before you blow up your account.
I like all the suggestions given by other traders because they are proven and tested. One thing more that I would like to add to this is that as a trader, you will have to take the responsibility for your decisions and trades. Losses are a part of the whole process and you must learn to accept them. If you are losing, it doesn’t mean that you are failing. But you fail when you can’t take a loss quickly.
True that! I have seen many traders losing because of the wrong mindset. For every trader, it is important to work on their own habits and be honest so that you can acknowledge the times when your ego got or greed got in your way of making the right decisions. When someone says, you should control your emotions while trading, they have seen the consequences and are trying to help you so that you don’t make the same mistake.
It is a big mistake even though the risk is spread between different currencies. It is totally unsafe and you might end up losing all your funds in a single day. You should revise your trading strategy.
Ya mate, been revising after such heavy criticism i been getting, it’s obvious then that it’s not right. I need a mentor!!
A trader who accepts loss with grace is often the one who grows. While trading with turnkey forex, I learnt the importance of keeping a trading journal to objectify my trades and mention why I entered or exited a trade. This helped me determine how effective my trading system has been. I have also tried to go with the flow while trading with avatrade to stack the odds in my favor and take advantage of more profitable trading opportunities but never overlooked the fact that I can also make losses if something is not in my favor.
Is keeping a trading journal really worth the effort? All the extra work and discipline other than trading, it’s difficult to take out time and maintain all the data isn’t it?
@Fred I don’t think keeping a trading journal is all that important and especially for successful trading. I know a lot of successful traders who haven’t ever used a trading journal and still get pretty hefty payouts and on a regular basis.
You’ll blow it if you continue this way. Learn risk management sir.
And how do they keep a track of their trading performance or activities? I don’t buy the fact that they don’t keep a track record at all coz it’s impossible to trade new if you don’t get a cue from the past signals or indicators used or what mistakes to avoid.
I find maintaining one really helpful especially with demo account trading on ava trade. All I’m doing is calculating my monthly average return to decide when I’m ready to move on to the real account trading.
it might be a good idea to check out correlation regarding the pairs ,if your day trading or just opening trades a couple of days i wouldn’t recommend more than 2-3
Can you use it when scalping? Because I haven’t been able to utilize it. I’m placing an average of 15 trades per day following a 1-15 minutes timeframe, and maintaining a trading journal is something that hasn’t gone down well with it yet.
Check out with your friends once more. I am confused because having traded for 3 years with turnkey forex, I still need a journal to identify the indicators and strategies that gave me good results.
Also, now that I’ve started trading with xm, I still felt the need to use it to single out the techniques and strategies that delivered zero tangible results while trading with the former broker.