Ok heres what I have right now, I’m still hammering down my system but I’m thinking of throwing the IRS’s economy stimulus money I’ll be getting shortly into the forex. As I’ve said before on atleast one other post I use Oanda, So if I wanted to I could trade $1.
But this is the way I should look at it, vs the way I do.
The way I think your encouraged to:
You find a trade, you realise you need a 30 pip stoploss on this perticular trade, your balance is 300, sticking to the 1% rule you can only risk $3. I think its a 1,000 contract.
Now thats all fine and dandy but I’m expecting 20-30 pip stoplosses on my trades and 40-75 pip returns. now with a mini lot 10,000, its 10x what was previous so a 30 stoploss = $30 or so this time. I’m ok with that. I’m even ok with putting in 30-120 or so dollars a month if need be. My trades dont come very often (Have only had 2 not go as planned so far)
Given the fact that I cant put alot of money in at once whats the harm in putting a little as needed? BTW: I’ll probibly be adding money reguardless untill I get my account balance up to $1,500 to $3,000 or so. Then I will follow the 2-5% rule. and later the 1% rule.
I was told that I may bankrupt my live account, but I’m not going to keep trading less then $200+stoplosses. So I’m basically started off with $100 ild let myself loose before I’ld stop myself, put more money in and trade again (also giving me time to figure out what the heck just happend…
BTW I look at each trade as if I’m paying the stoploss, for the possibility of breaking even… – with the hopes of getting a profit.
Thanks for any points of view I may want to consider
I’m a bit confused. You started off talking about Oanda and risking $3/trade on your initial $300. Then you got talking about mini lots and $30/trade.
There’s no problem with planning to add $X per month to your account. I would, however, trade from Day 1 exactly as you plan to do so in the long run. Develop the good habits. Use the low balance as an opportunity to learn with a low tuition cost. You’re not going to get rich off a $300 account, so don’t push the risk level just because you can always add more. It tends to lead to bad habits.
As I said before, I’d trade from the start exactly the way you plan on trading in the future. Don’t increase your risk just because you’ve got a smaller account, otherwise you might find that your deposits each month may not grow your account balance as quickly as you’d like.
I trade with O. & started with a $1k acct. I risk 10% because the 1.5-2% that is usually advised is for the big traders who have millions to risk (bank traders, currency mgrs for hedge funds, derivatives, etc). And spending a couple of hours on the computer, winning 1.5% which equals a dollar three eighty is like watching paint dry. 10 consecutive losses on a 1K acct using 10% of avail margin would still leave me with $348.68. But I would take up golf after the 5th loss & use the $590.49 to buy a senior season public course pass. My 2 cts. d.
Sounds like in your mind set that you have already prepared for failure. If so, why not just keep your capital and not lose any. If not, why not try to be a successful trader which will take some money management to stick around long enough to beat the learning curve. I know for a while you will have to watch the paint dry. It is the price you pay.
This is probably why most new traders blow out thier intial accounts. Too much risk on each trade.
I started my account initially with $500 and have stuck to the 1-3% rule of thumb for the most part.
But as I only trade 1 pair, and have developed (still on-going) a good sense of trust with my trading strategy, and am developing a good feel for the currency I trade, there are times when i will trade a higher percentage of the account but not very often.
Too bad the stars dont come into alignment everyday, but when they do, sometimes its worth to take abit more risk.
Now that comes down to:
-believing in your trading strategy
-following your trading plan
-learning from experience
Not to say it works everytime, but i believe this is one of those things you learn as you go along. I imagine traders (succesful) with years of experience, know exactly when to up the ante or not.
Base on the title of this thread i’ld say no. If you are only strating with 300 then 3 bad trades like that and your account would be wiped out. Take baby steps and build your account. I personally wouldnt recommend a SL over 30 pips with that starting balance.
I agree with that your risk to reward is a little off. i think you should lower your SL and if yuh keep a 100 pip TP follow it with say a 50 trailing stop
You cannot arbitarily raise or lower stops to suit the size of your account (or for any other reason, really). That is the path to sure destruction.
Select stops based on what your strategy defines as where they should be, not some number you pulled out of thin air. Then set your position size based on your stop.
I used to set my stops at 20 pips no matter what. Then I figured they were a little to tight after being kissed a few times just to turn around. So I gave them an extra 10 pips.
I don’t do this anymore. I figured just using a number to better the risk / reward was just plain dumb and pointless.
Now I set my stops at an area that I know I was wrong on the direction. This could be any variable number of pips. Sometimes it is tight and sometimes it is loose.
