I’ve been studying an excellent long term stratergy that I’m very interested in deploying live. The longer term stratergies in general (trend based) seem more reliable and so the risks seem less.
Still, even though large pip gains are possible, the stop loss needs to be set at a reasonable distance so as not to be triggered. This often means that those large pip gains still only equal a 1:5 risk/reward return. So, when allocating 2% of account size, a winning trade over many weeks will still return 10%.
So then, are the longer term stratergies for those who have vast amounts of money to trade with? ie, the banks? A bank can afford to wait many weeks for a return, as their investment will have been much larger than a lone trader sitting at home?
All thoughts on this are welcome.
Many thanks,
Cord
(PS, I’m on my 4th 12 hour night shift, so apolagise if my grammar is poor).
It’s still the same for a bank as it is for you - it’s a proportionate gain on your income.
Long-term strategies require patience - obviously - but not vast sums of money. If you’ve $10 or $1,000,000 you’re still only trading a set percentage of your account with proper MM.
But… because of the length of trades, it takes a long-time to work out when (not if) a system has stopped working. Bear that in mind and good luck!
Regardless of the timeframe, if you’re setting your SL farther, you’ll need more money in your account to handle the margin draw down. I’m preactice trading on daily charts right now. My R/R is only 1:1, but that is compensated for in other parts of the system. I started practicing on a $1000 dollar mini account and did well the first day. Took some losses the second and got margin called on 3 trades that drained my account on the third day. I went back and re-tested starting with $2500 instead and it did fine. I ended the week up over 300 pips. Since then I’m up over 72%. Bottom line is trade with as much as you’re willing to lose and be prepared for that, but don’t just assume you’ll lose. If you’re trading a smaller account, trade smaller lots. I’ve read many places that you shouldn’t trade a standard account with less than $10000, but in my practice, I’ve concluded that I won’t do a standard with less than $25000. That’s just the what the system I’m using requires to work right. The more you practice, the more you learn.
"Regardless of the timeframe, if you’re setting your SL farther, you’ll need more money in your account to handle the margin draw down. "
Not true if you’re practising proper MM.
You simply trade less lots so you maintain a set percentage risk on your account.
Admittedly, only Oanda and spreadbetting companies handle microlots to allow you to fractionalise it properly (as far as I know). If your broker doesn’t allow you to trade smaller than 1 lot, then get more capital or a different broker.
Very much so… I vary my MM from .5% to 2% max based on my grading of a trade I am going to enter. Higher the risk, less %. As I only trade off the Daily and Weekly charts it is all the same % no matter what.
It is off topic but when you don’t have the money stay out of larger tmf, you can’t win!
Myself lost many accounts trying to win on those tmf. Guess what it was nothing for me. Now i’m trading 5m tmf because i like to place more then one trade a week.
you can see my results on this board with proof of my account.
With micro lots it isn’t a problem any more such as Oanda or some of the others. I am usually able to hit on ‘average’ about 3-5 trades off the daily and about 4 solid trades a month of the weekly.
I used to trade lower time frames as 5min… but found there was way too much noise for me to trade. My ratio for me was terrible and lost 2 accounts but thats great if you can get it to work for you.