I am a beginner in Forex trading. I was introduced to Forex via the phenomenon of Forex robots. After doing some research, purchasing virtual private server (luckily I had some money online earnied through an ad on my site, so I didn’t invest any of my hard earned cash) and testing Forex Megadroid on EUR/USD with Advanced Droid Tactics, using FXOpen’s MT4 platform, I came to a sad conclusion that Forex robots don’t work or give ridicolously small profits. ADT author claimed that Forex Megadroid can give around 10 % per month, but my careful testings (I respected everything said in ADT), I was around 0 % of profit in around 30 days, or slightly below (from 1-5 %). After some 30 days I started manual trading on my 50 000 $ demo account, together with Megadroid (but I removed Megadroid few days later and switched fully to manual trading), with lots of 2 (leverage 1:100), usually scalping without stop-losses.
In first 40 days I made like 6000 $, including experimenting and losses from Forex Megadroid, and this month I’m around 11 000 $ of profit (only manual trading), over 20 %. I spend from 1-2 hours trading, usually through 5 minute visits.
Maybe there is a holy grail forex robot out there, but I don’t care about them anymore. Manual trading works for me. I’m not sure if I’m a natural talent or deluded…but these 40 + 25 days tell me that with 50 000 $ I could make a fortune (or living if I would chose that tactic) on forex market. Unfortunately, I can only afford myself around 1500 $ starting cash, and depending on the level of agression I’m comfortable with, I’ll need about a year to get to the stage of being able to make a living from forex. So I’ll need a lot of discipline in this first year, but I’m very confident at this point and optimistic in my forex future.
I was hoping for a tip or suggestion from a more expert trader…like in the sense if my expectations based on current experience are too high or something…
well at least you’re on the right track now by putting the control back into your own hands rather than an algorithm unable to discern the nuances of the market.
I started with $1,500 in a live account a few months ago and blew half of it pretty quickly before pulling the rest and deciding to prove consistent profits on demo before going live again.
A lot of experienced traders will tell you that you’re kidding yourself if you trade demo as it’s nothing like the experience of trading with real money and the emotional rollercoaster that can go with it … I completely agree that profits in demo will not necessarily translate into profits live, however I can guarantee that losses will. If you cannot profit consistently in a demo account then you will certainly not change your fortune by adding emotional tests on top.
After closing my previous live account it took me 2 months and 2 demo accounts before finding a strategy that I could use to make consistent profits and ironically, it was when I threw away all my indicators and mechanical strategies that I actually started making some consistent and significant profits. Now all I trade is candle patterns with support, resistance and trend lines on daily and 4hr charts.
As far as realistic returns, this will depend on your appetite for risk and how you look to manage it. I would suggest that with $1,500 that you trade a maximum of $1 per pip. This will allow you some room to breath as far as having trades in a negative position. Ideally you will aim for 2-3% risk on any given trade … a lot of people tend to look at their lot size and adjust their stop loss to suit the risk ie. “if 2% of $1,500 is $30 then at $1 per pip I need a 30 pip stop loss”. I would propose that the smarter way to manage the money would be to define the stop loss first then adjust the lot size ie. “the distance to the swing high or swing low is 100 pips but I think that the move is going to continue, if my stop loss is 100 pips away from my entry and my maximum risk is $30 then my lot size needs to be 30c per pip”. Admittedly, you’re wins are not as large but you will remain in the trading game for a longer term. As your account grows, so will your acceptable lot size.
I myself after trading my demo account with consistent profits for 2 months have set myself the task of turning $50 into $1,000 which I believe that I can do in under 12 months trading 10c per pip which I am outlining in my blog.
Not sure if that answers your post, but I hope it helps anyway.
I am convinced that I can trade profitably with my approach. I’m not sure what people mean when they say consistent profits. It can mean different things on monthly or on daily basis. I think too many people are obsessed with tight stop-losses and cringe on high loss trades. If you watch my report list you’ll see I had few losing trades over 50 pips (20 $ per pip), and I didn’t sweat over it. I think there was one even over 100 pips.
My philosophy (a note that I’m not calling it a strategy) is:
conservative lot sizes and aggressive/“risky” trading approach
when leaving the market (for an hour or two) setup tight take profit levels and don’t setup stop loss levels
market is too unpredictable to base all trades on constant risk factor (you will miss a lot of profitable trades because applying a constant risk factor on your trades)
I try to avoid indicators and mechanical strategies because I truly believe that then you don’t [I]see the forest from the trees[/I] like that. Also, I’m not a fan of resistance/support theories because resistances and supports are constantly broken, in all time-frames, so in the very basis they can only teach where and how to setup STOP-LOSSES to reduce your risk. To me it’s about relying on your gut on 15 minute charts, having in mind the overall trend movement and global news, of course. Risk, on daily basis, but be wise enough to give up on losing trades against a trend if you see that your hunch was wrong (note my negative trades). Allow yourself not to have a profitable MONTH, but don’t allow yourself to end up a certain monthly period in negative. A 0 $ profit or any profit per month is acceptable…if appearing rarely, of course. Two months in a row with minimum or no profits…then you need to change something in your strategy.
As I said, I don’t trade with stop losses, and I really think that they are unnecessary if you keep and eye on the market on hourly basis and trade with conservative lot sizes. Of course, don’t leave open trades over night.
And yes, I do plan to start with 0.1 lot sizes with my 1500 $ live account (1 $ per pip).
I’ll aim on trades ending up in profit from 5 to 30 pips, 10-20 trades per day.
if more trades on lower time frames works for you then good luck
Personally I trade of 4hr charts, similar thing no indicators or stop loss.
Can I suggest that trading $20 per pip on demo “no sweat” will have a profoundly different effect on your psyche in a real situation … especially when you’re down 50-100 pips. Glad to hear you’re starting off at $1 per pip though.
I was trading with 50 000 $ demo account and lots of 2.00. That means, 2500 $ is 20 times less, so lots of 0.1 are optimum for my stategy for a 2500 $ account. As I’m starting with 1500 $ I’ll need to be a bit more conservative and careful for the first 2-3 months, but I really don’t want to trade with less than 0.1 lots.
well, before i can give you some specific advice I need to know how long you’ve been demoing
-more then 3 months, same system and consisten results, it may be time to start live
-less then 3 months, and or, inconsistent results, you’re probably better off testing some more before risking your hard earned cash
some common misconceptions about FX trading
-you need a 50k account to make a living off of forex
-wrong, earning 40% a month on a 1k account and youll make plenty (compounding the account)
in fact, with a 1k account, earning 40% a month, you can turn a 1k account into 200k in 14 months.
so your 1500$ would be plenty, maybe youd want to make it only 1000$. the extra 500 wont save you much time anyways.
the hardest part will be earning consistent results. so before live trading id suggest that you really test your strategies for months. (im still testing some of mine and its been over 6 months, though i have others that I use now)
also try opening a smaller LIVE account soon, with just the right amount of money, not enough that it would kill you to lose it, and not enough so that you can trade it carelessly. This will give you a headsup on how emotions and have a negative impact on your trading performance. And you can always add to the account later if your doing well.
If you have any questions just ask and goodluck trading.
I will be starting off with a similar amount, $2000. I just started and I am a complete newbie but I think that I may have selected a strategy that I would like to go with. So I will be testing it for a few months and if I am consistent, I’ll be going live.
Are you sticking to trading only the one pair? Also your goal of 5 - 30 pips, is that per trade? 10 - 20 trades/day @ 5-30 pips will be pretty nice! Best of luck to you!
I’m not sure I need to demo test my strategy for more than extra few weeks from now because I make about 10 trades per day. Maybe we should all think in number of trades you test your strategy with, than the amonut of time you spend testing it.
I minimized my monthly profit goal compared to the number of pips and trades my strategy allows me just to be able to control risk better and not feel forced to enter a trade each time I close an old one.
1500$ and not 1000$ because I can afford it and because it gives me slightly more breathing room in the first two months than 1000$ would. Let’s say it’s a psychological thing. Emotions management.
