I am in Richmond Virginia and I did some stock trading every now and then when possible but mostly long term like holding stocks for couple of years or so. Not day trading or even swing trading. However did lot of reading on Candlesticks and Technical trading. I read about FOREX and I really wanted to learn and try to be a decent trader if possible. I have given my plan below please review and recommend corrections if necessary.
Objective is to not to lose money and have as many successful trades as possible
Second objective is wait for right time and indicators to enter and exit trade
Third objective is to build a system based on indicators, candlesticks and oscillators to find entry and exit position.
Last and most important to create a plan I can live with and work with and able to control emotions and use the trading plan as my guide
So far I have done the following
Completed Trading for Living Book
Read several books on Candlesticks and technical analysis
Completed babypips tutorial
Working on building a plan based on RSI, MACD Candlesticks
Questions
I would like to trade on a virtual trading platform for at least 3-4 months trying my plan --> Any recommendations on a particular tool ?
Comments on overall plan and if I need to do anything more?
I will go though the forum to find broker reviews.
I plan to begin real trading when I have a success rate of 80% using my system, is that realistic or too high (or low)?
I plan to use around 20K as starting capital, is that too much or too little?
Well done swadwekar. Much of what you say sounds standard and reasoned out.
The tips I would offer would be -
start with the simplest TA-based methodology you can - price only preferably, or price plus one MA. Where and why it doesn’t work will tell you what to add and what these things need to achieve.
add an indicator (including another MA) or another time-frame chart only if it will solve an identified problem and you can’t already get what it tells you from your current chart
use a fixed stop-loss to manage capital risked per trade. Place the stop with TA - at the level at which price is now more likely to go in the other direction.
think about an exit strategy for the winners. Improve this with a pyramiding or scaling in/out strategy.
don’t chase win rate (or r:r) or change strategy based on these data. Keep your losses small but after that profit is the only important metric.
Thanks and Yes , I am doing some reading on risk management and capital management / planning. Also trying to write down a plan for managing money for example how much money to put on each trade, when to cut losses or how much is the tolerance etc.
Hi @swadwekar and welcome to the forum. Your points sound quite reasonable, for sure you have put a lot of thought into your plan. I would advise you to practice on demo for at least couple of months until you figure out if your strategy needs some changes or improvement. When choosing a broker, make sure that its demo conditions are as much similar to the live as possible so you would know what to expect. I would suggest to not use too many indicators and time frames at once because it would be better to keep things simple in the beginning. Choose one instrument (stock or Forex pair or whatever you decide), explore it and experiment with it.
As for the starting capital and this is my opinion of course, it could be a bit too high. Perhaps in the beginning, when going live you could decrease it. Otherwise, when you plan to invest a certain amount of money in trading, you should always be prepared of losing it as we all know that many factors could contribute to such events. Once you gain enough experience and knowledge, you could increase your investment again.
At the beginning 20k is too much. Don’t invest mich money unless you are making consistent profit in live trading foe a good period of time. All the other plans seem ok. With time you will understand the rest. Focus on being skilled. Wish you all the best.
I think you have a good plan even though I don’t agree with some of your points. Firstly, I think 20k is too much for a start. Rather start with <= $500 and then increase it a few months after consistently & profitably trading your plan. Secondly, I wouldn’t recommend indicators for anybody who wants simple trading life - currently using price action trading (profitably) with just fib tool, 2 MAs and S/R levels. Thirdly, it’s not about the success rate, rather the risk / reward. Lastly, ensure that you have a concise trading plan. In my case I am trading D1, trading 8 pairs, checking the charts for about 30 minutes a day and it seems to be working for me. Goodluck!
Thanks so much for taking time and sending those tips. I will follow your advice and start small. I will definitely remember the risk reward advice and follow that. Thanks for sharing tips on trading plan. I need to build it.
Welcome to the largest currency market around the world. I think you are going right. But you should start practicing demos and it will help you to evaluate the effectiveness of your trading plans. And I think mini accounts is best for you and 20k is bigger capital. Try to work with smaller investment first. Best of luck!
Try demo
find your most suited trading system,
Find your most suited timeframe
Min 3 month demo
Open bonus account, ( i use fbs 123 , and profit in this bonus account ,im use it for starting capital at cent account)
I plan to use demo for 3 to 4 months. I will do a quick research on the forum and see if I can find couple of names for demo account candidates. Thanks so much.
Try applying a miving average to the RSI. The moving averages should be applied to previous indicator’s data. The moving average should be at least 75% of the RSI value. For example, if your RSI is 14 then the moving average value can be a 9. Try that and look at major turning points on a chart
Good decision, but I request don’t trade in demo at random , most of the traders don’t trade in here seriously and they get nothing from here. Just focus in demo and trade with your knolwdge that you have acquired. Good luck.
If you are not trading from a US address, FINFIX in Finland is the best broker on the planet. From the US the best one is FXChloice. 20K is a perfect start if you can afford it. Don’t forget a fool proof money management plan. Your #3 objective of basing a entry/exit plan on RSI, MACD, and candlesticks would be my last choice but if you can make it work I am for what works. Gary
