Hello,
I just registered here at baby-pips, after reading through “The School Of Pipsology” last night. I figured the forums would be a great place to get advice. I just made my first trade last night, and it seems to be going well.
Welcome to the forum.
Can you tell us a bit of how you trade such as timeframes, sessions, etc…?
Hello! I’m using the 1D chart. I don’t think sessions are going to affect me though, since I plan on holding my trades for multiple days.
How much do you like to risk per trade?
I’m also curious what trade you made.
Risk? I think I risked about 1/8th of my account. The trade is short EUR/USD.
Are you using real money or just demo? How long if you demoed?
1/8th seems a bit much, but you posted in here saying you wanted advice. Not sure what your goals are, but maybe you should reduce risk to around 1-2%. E/U is taking a dive so it seems to have worked out for you this time.
I played around with a demo and made 1,000 into 1,380 in 2 months. This is real money, but only 250 dollars to start with. The risk seems ok to me though, since its such a small ammount of money that I am starting with.
It isn’t. You’re risking 12.5% on every single trade you make. You need to have a better working understanding of risk management. There is absolutely no reason why you need to risk so much because a sound strategy coupled with low monetary risk will guarantee success over the long term.
When starting with 250 dollars, am I correct in assuming that 1% risk is 125 units at 1:50 margin? because 125 units isnt a whole lot to trade, is it?
It’s not a lot to trade, but neither is $250. It’s all relative. Slow and steady wins the race. As far as the amount of units to trade, you have to figure it out yourself, but 1% risk just means that if the trade goes the opposite way which you traded it, the most you can lose is $2.50. Usually people go for 1:1 risk to reward where you can make $2.50 if it does go in the direction you predict.
When you see other patterns which give very strong indications of market movement, then you can go more than 1:1 so you will lose less and less often than you win.
If you are using Oanda, they make it easier to figure out just how many units you need and how much you are risking in $.
Thanks for the solid advice. Where is the tool in oanda?
It’s not a tool persay, although they do have a PIP/Profit Calculator which I never use. I was referring to when you enter in your trade. On the bottom of your order window, it will say something like
1 PIP = xxx USD
Take Profit = xxx USD
Stop Loss = xxx USD
and these values change according to the amount of units you put in.
I use a simple excel sheet I made which figures it out for me once I know how many pips I am risking.
For Oanda,
Units = (Dollars willing to lose) / (Pips * 10000)
Your way ahead of me, I don’t even use those stop losses.
“Never enter a trade without a stop-loss”
This should be a rule taped in a prominent position of every traders’ computer until it is inculcated mentally.
Forex is about slow and steady, try 3% risk if you feel that 1% is too meager.
Cheers and good luck
xXTrizzleXx
In my own humble opinion, the poster who advised you to only risk 1 to 2% of your trading capital per trade was giving you good advice. I’ve been trading various instruments for 22 years. I never risk more than 2% of my trading capital per trade. It’s a good rule and will keep you from blowing out your account with just a few bad trades in a row (believe me, it will happen). Don’t develop bad habits just because it’s only a few hundred dollars. Bad habits are easy to form and hard to break. Trade smaller lots all the way down to micros if need be until you build up some experience. Most traders think money management is more important than good entries when it comes to long term success.
Happy Trading
Looking at my current trade, If i set a stop loss, It would have most certainly be hit, but with no stop loss, I am profitible.
I am trading micro lots (1000 units). with 250 of capital, is this high risk? I have to admit it is a little confusing to me.
It is easier to express your units in terms of USD/pip. For instance 1 pip = 1 dollar or something like that. For Oanda, 1000 units is 1 pip = $0.1.
Always, ALWAYS use a hard stop loss, even if its 1000 pips away (assuming no margin call). If your house catches on fire or you get attacked by a rabid t-rex, there is no way you’ll have time to call in an order. A stop loss is protection from floating loss that can lead to a margin call.
It seems you are ill-prepared to be trading live. You need to work on understanding the fundamental stuff about Forex.
Good point. However, It is impossible to be attacked by a rabid t-rex, since only homeothermic animals are susceptible to rabbies.