Question for experienced traders

Beginner Questions
1

In order to try out the V-trader platform, I just opened a demo account with CMS Forex. After doing this, I discovered that CMS is offering a free $50 micro account with no deposit required. So I decided to open one. Hey, it is free after all. Now I know that this is a marketing tactic and I realize that the amount of leverage in 1 microlot when weighed against $50 is extremely high. But I have an experiment in mind for which I would like some input.

I have only been trading forex for a little over a year. I have a small account with Oanda in which I trade weekly volatility breakouts. I cannot employ this type of system with this new CMS account. The drawdowns with mechanical breakout systems can be deep and the leverage on the CMS account is way too high for this kind of system. So what I want to do is employ an approach that utilizes small stop losses and high probability trades. My goal is not to turn this $50 into $10,000 — although that would be nice! What I want to do is learn how to trade PATIENTLY and wait for the best set-ups. The challenge will be to see if I can successfully keep this account from blowing up.

I would welcome any input from some successful traders on how you would approach this experiment. What set-ups would you recommend? What time frames would you focus on? Would you focus on a single, low volatility pair? Again, ANY input that the more experienced traders are willing to share should be helpful to me and any others that are attempting to learn.

Thanks in advance to any of you willing share your knowledge.

2

First of all, I would learn to read the fine print on those “free” $50 dollar deals.

You will need to deposit $500.00 of your OWN money within 45 days of the initial signup, or they will close your account, and should you have any, keep ALL your proceeds.

Do focus on one pair for a while. It keeps things simpler for now. Although somewhat volatile, working on a pair like the E/U or G/U insures lower spreads, and since liquidity on those two are sizable, it keeps slippage at a minimum.

Time frames depend on what you need for your system. It sounds like you have one in place, don’t reinvent the wheel, just work on bettering what you know.

You’re on the right track with the patience comment, just keep that mindset, and you’ll be fine:)

3

The $50 dollar account aside, this: "What I want to do is learn how to trade PATIENTLY and wait for the best set-ups. "

This implies that there are some A1, can’t be beat, never lose set ups, that if you just knew and traded correctly you’d almost always win.

You need to stop thinking like this if you ever want to be serious trader.

Yes, there are high probability set ups. But, if all you ever do is wait for the perfect storm you are never going to trade and never going to make money, because that perfect storm often doesn’t work out.

There are no, “perfect setups,” what the market did last week when x & Y happened is no guarantee it will do it again. It’s a just a tendency for something to happen, which you can speculate on about the outcome.

A trader is a speculater, a speculator is a gambler. You see a set up and bet that x will happen after y. You need to get away from trying to find the, “perfect set up, " or " never loses method.” And just realize that in order to make money you dont have to have perfect set ups. You just have to have good money managment, be right a reasonable amount of the time, cut losers short and let winner run so they outstrip loser.

I probably sound like a jerk saying this because it’s not at all what you asked, but looking for the, “best set ups,” “best method that never loses,” isn’t the answer.

P.S. small stops, even on high probability set ups, is a sure way to lose very often.

4

Master Tang:

Thank you for the quick reply and pointing out my oversight. I was downloading the demo at CMS when I saw their $50 promo and thought “what the heck”! As a result, I didn’t read the fine print.

Also, I appreciate the encouragement about patience and the pairs that you recommended.

5

ThePhoenix:

You don’t sound like a jerk at all. I said that I would welcome any input. My purpose in posting this question was to learn how an experienced trader would “approach” this type of experiment. What I understand from your reply is that my approach (small stops, high probability set-ups) is not realistic. Thanks for the input.

6

There is a simple but effective strat you might like to try in demo for a week? I should point out I trade 1-3 days and 1-2 week trades typically but occasionally if lifes slow adopt this.

GU 5m or 15m TF and 20:2 boll. I look for PA to step outside the high/ low boll and wait for the breaking candle to close. I enter on the new candle change of colour at the high/ low boll band and trade towards the center boll. On 5m TF TP = 10 pips. 15m TF = 15-20 pips. Stop equal to TP (R/R 1:1). Trades only taken on a level’ish Boll with a spread of 30-40 pips across the high/ low Boll. Set up occurs around eight times a day (London open to New York close) is average. If PA starts climbing the Boll walls forget it! :smiley: