Hi guys and thanks for taking the time to read this.
So around 5 years ago I started learning to trade. I got pretty good at reading charts but always seemed to lose money in my demo account so never actually got the chance to trade live.
Last year I gave up, I tried so many things to become profitable asked so many questions but just could not find a way.
So two days ago for no reason at all it hit me where I went wrong.
My grand plan was try to use £100 a day over 5 trades, So £20 on each trade.
SO if for example I created a entry order and had a 50 pip s/l I would divide £20 by 50 pips so and that would mean I would need a pip value of around £0.40
Out that 5 trades if I lose 3 and double my money on 2 then I’m £20 up a day or £100 a week.
Sounded great at the time but last night I realised on bad days when I trade 5 lose 5 I have just wiped out an entire week of gains in that single day.
My question is how do you give your self the best odds and how do you chose your position size?
Ive been reading through so much since last night and nothing seems to be making sense, sometimes trying to unlearn something is harder than learning.
I advice you to trade in live account is never could be same as demo
And 50 pips is just 5 pip , the market in blink of eyes take your cash and good by to you son
Here is list of things to do :
Read a lot really and fast
Go to beach
Go to casino
Go and watch turtle
Go and open live account
You have 1 month to do this rather than that you are loser forever in this.
Not 20% £20
The strategy isn’t important, as its the money management/postion size side of things I have had problems with not the strategy and I doubt trading live is really going to help if I cant be constantly profitable in a demo.
[QUOTE=“stainerthetrader;765797”] Not 20% £20 The strategy isn’t important, as its the money management/postion size side of things I have had problems with not the strategy and I doubt trading live is really going to help if I cant be constantly profitable in a demo.[/QUOTE]
Ok you right, sadly i couldn’t help …
By statistical analysis of what will be safe, and enable your account to grow, given various parameters of your method and edge.
The second half of Van Tharp’s beginners’ trading book, [I]Trade Your Way to Financial Freedom[/I], will help you [I]enormously[/I]. (You might even manage to find a free PDF copy of it, if you look around online.)
The combination of underdapitalisation and excessive position-sizing makes it close-to-impossible to profit. A good rule of thumb is [I]never[/I] to expose more than 2% of your account to risk at a time.
Even with $100 or so, you can open an account somewhere like Oanda with infinite position-granularity (i.e. you can trade tiny positions, upwards from $1 each, and learn and practice at the same time), or you can use a demo account while practicing position-sizing and everything else, of course.
Lexys. I got a question. After reading van tharp’s book. Undercapitalized is of the 6th variable. Truth is a I don’t have 200kusd. Merely 1000usd max to invest on live. With this amount as long as I treat as so and don’t over position it. I’ll do fine? Am confused because van is talking more about stock and commodity . not much of currency trading. Undercapitalized can be safe if we don’t have unrealistic goal. and of course without much capital . once could not do it for a full time. Part time is good though I think.
Yes, in principle, with spot forex, you can definitely start with $1,000. You just need to use small position-sizing proportional to your account-size. (That’s how I started, too). I suggest you use Oanda. They’re not bad at all, as counterparty market-makers go. If you try there, you can use [I]either[/I] Fxtrade (I recommend it) [I]or[/I] Metatrader 4 (I don’t recommend it at all, but that’s only personal preference).
Yes, this is true. But for the purposes he’s talking about, “trading is trading” and it doesn’t matter, really. As you say, a low capital account can be perfectly ok, as long as your goals match, proportionally.
Thanks for explaining. For myself I’m currently using fx trade to do entry orders only. I use mt4 to chart and do my technical analysis . also, am android mobile trader only. With mobile mt4 I get to use volume. Which is important to me. Perhaps could you explain why don’t you use mt4?
I do know a few successful people who use MT4, but like you, they don’t actually trade with it.
I see; yes. I wish I had realised, myself, at an earlier stage of my trading career than I did, how important and helpful volume is. I’m very much on the same side of the volume discussion as you.
A big mixture of factors, some of them historical; some of them personal; the fact that I know no really successful traders who trade from MT4; the fact that I intensely dislike anything to do with automation and I associate MT in my mind with EA’s which I think are a [I]dreadfully[/I] misguided approach to trading and a [I]real[/I] “enemy of education” … so all my prejudices are showing, as well as my “perspective”. Also I strongly prefer NinjaTrader, for all the reasons explained here. All of this is opinion only and has very little to do with the conversation, and shouldn’t be taken as “advice” (but I strongly agree with you about volume!).