Apologizing in advanced for my poor spelling and grammar.
I have been studying and using FOREX on a demo account with Pepperstone (broker) MT4 (platform) for the last month. Before this i had no exp at all! The last 5 days i have been consistently Making upward of $500.
Before i open a live account someone please tell me this is to good to be true and what i am missing. There is no way i could imagine myself making that sort of money while i am such i NEWBIE!! I Still have so much to learn. So my Question is What am i missing?
You are probably trading too big position sizes.I mean 500$ is 50% gain a day,thats just crazy.It may look well but you could not sustain that level in the long run and eventually taste the bad side of the huge position size, let’s say -500$ / day, how would that one sound like?
Unless you take like 1000 trades a day and win almost all of them, otherwise you take i guess 5-10 trades with huuuuuuuuuuge risk like 10% or more,which is unacceptable.
So i advice you to take trades with no bigger risk of 2% of your total account.Here is a nice post where I explain it in more detail,simulating how much % you lose of your account with a certain account risk % level: http://forums.babypips.com/other-trading-tools/56062-account-risk-drawdown-statistics.html
Thanks for the reply mate!
Today i went long at 97.770 and took my profits at 98.310 and made just over $600. Im assuming i must have risked to much of my $1000 for that to be a reasonable trade?
Hey jmahon2012,
seems like you are on a good winning streak.
Just to bust your bubble, lower the lot size to 0.1, this should reduce you $600 to a mere $60. Secondly forget about the dollar value and focus on the amount of pips that you can consistently make. If you can achieve >50 daily for a month, you have the clearance to go live.
Not exactly, but realistically you can’t have such a large lot size for a live account of the same size.
The idea is focus is to focus on the number of pips rather than demo figures.
I think it’s better to learn risk management in forex if you really don’t know it. Never risk more than 3 % per trade. Also don’t increase leverage too much.
What are the “and indicators” you are using.
What time frame or frames are you using for your trading plan.
What are your trade rules.
Do you set take profit and stop loss if so, how do you come to those figures
What happens if you go live and lose the $1000.
If you could answer these questions, some of the advice above might change
As others have pointed out, chalking out a strategy based on the $ is never a good idea, try to work out how many pips you would like to make, on any trading day and streamline your strategy to that.
In addition, practise good MM, undertaking too much risk leads to account being compromised…
oh yeah…remember myself blowing up my first live account with lack of risk management. However, you might be just very lucky, and if it’s so…than go ahead. By the way, if I were you, I would try my luck with another broker. It sounds just too sweet.
You are a newbie and you need to learn couple of important things from now. There are lots of newbie initially make this mistake while practicing demo trade with virtual money. They like to trade with lots of money and want to see the result! This is common mistake but highly threatening. You need to keep one thing in mind that when you trade in real market you would not probably trade with lots of money. If you are a very rich person then it is completely different story. If not then be realistic. Take small amount of leverage and see how it works. 1:100 is very high at this stage and it is obvious that you would have to face to face with unpleasant reality in near future if you continue in this way.