I started this thread because I want YOUR advice! Up until a few weeks ago I played online poker for a modest living but after the shut down I was turned onto Forex
trading by a friend. After some due diligence on my part I feel I am ready for the real thing. I just opened an account with Forex.com with an initial deposit of 2,500, keep in mind I used to gamble so I know all about risk. That being said I need all the help I can get and would appreciate a response to any one of these three questions to kick off this thread
Between the Euro, Yen, and British Pound. Which are you going to be focusing your trading on?
Which of the two strategies would you recommend. Making quick trades (30 minutes max) using a hit and run type strategy so to speak, or make long trades using trend lines.
Any advice as to what it takes to be a successful trader?
If you want to add anything else that might help please do so. Thanks
I think you are a poker player and thus will go for hit and run! Tell me I’m wrong? LOL!!!
In all seriousness though you’ve asked the right questions but we don’t know how you wish to play this out? Most newbs go for the shorter TF’s and minimal pips X big’ish trade size re account. Stats prove this to be a loser . Pro traders look for trends and ride them out over the longer term… your call?
Thanks for the response R Carter. You could say most gamblers will tell you to get in and get when you turn a profit. Although my style is focused more on MTT’s (multi-table tournaments) where 10% of the player field makes money and 1% of the players take about 80% of the total prize pool. Watch the World Series of Poker and notice how much pay discrepancy their is between 1st and 9th money. My point being I am a more refined player that plays for long term success.
“Most newbs go for the shorter TF’s and minimal pips X big’ish trade size re account. Stats prove this to be a loser . Pro traders look for trends and ride them out over the longer term… your call?”
I haven’t made a call yet as to which approach I want to take. Here is an approach I am considering making- Look at a currency pair like the EUR | USD. I feel the Euro would be doing much better in a couple months than the dollar. Would you approve me buying a 100k lot in Euros just because that is how I feel. Or would that be newbie like.
That bet would be well beyond newbie like… 100k lot with a $2500 account is way too large of a position. 25 pips against you and your account is already down 10% before you pay for the spread.
Keep your feelings out of your trading, stick to strict guidelines and you’ll do much better. Not to mention the EURUSD just made a new lower low, if it makes a lower high, then the uptrend will either have ended, or it may be going into consolidation. Fine for day trades, or scalps, but you wouldn’t want to put all your account on one long position.
My recommendation would be to do a lot of research on risk management, and once you have that down demo trade an account for a while before putting that $2500 up. That’s not a whole lot of money, and it can be taken away really fast if you aren’t extra careful with it.
Thanks for your input RC24. Just a few things that aren’t very clear to me in your post so bare with me. I understand 25 pips is 10% of my account but what exactly do you mean when you say, “your account is already down before you pay the spread?” From everything I have learned I am only down 2 or 3 pips at the moment of the trade. When you say stick to strict guidelines. Would a few possibly be: focus on no more than 2 currency pairs at a time, set stop loss at 15 pips, etc. I will research what your talking about with the EURUSD and risk management in the meantime.
I am agree with RC24, 2500 is a huge amount and a newbie should avoid a large amount of money. You should first start with a small amount. Have some experience of market, you seems to be experience less in the field of Forex. It is a place where a multimillionaire can fall and become a beggar and a beggar may become a multimillionaire :). Risk factor is so much here so you should first research the market, take advice from experienced person before investing a huge amount.
If you want to be a successful trader then always remember these golden words: Experience makes a person perfect. Read the articles on Forex, surf Forex site and thoroughly read the FAQ section of it. Whenever you come across any doubt straightaway clear it from any experienced person. Always update your information on Market conditions.
I appreciate your thoughts hbarkar but everything you said I already know. Here is a general idea of where I am and where I want to be. First off 2500 is not a lot of money, not a little, but not a lot. I know the Forex market just about as much as a newbie could know before he is no longer a newbie. The school of pipsology has taught me the basics. I have about 60k in my demo account already after two weeks. I need to start making money now. Essentially post something if you would consider it helpful.
The problem with setting a stop loss at 15 pips is that the market is always changing. Volatility is constantly changing, even throughout the day as we move through different market hours. Set up an ATR (Average True Range) Indicator on a 15 min chart. I did this and am looking at the last 24 hour time frame of GBPUSD on a 15 minute chart to give you an example. The low is .000774, and the high is .002113. That is an indicator of the AVERAGE true range of the bars, smoothed over 20 bars. The actual true range of some of the bars to bring that average up is a lot more than that. Setting a 15 pip stop loss might work fine during the less volatile hours and give your position some room to breathe, but when volatility picks up, you can get squashed in a hurry. That example is based only off of a 15 minute chart, if you plan on taking longer term positions like on a daily chart for large gains, you won't even see a 15 pip move on a daily candle.
I think hbarkar misunderstood me in thinking that I said 2500 is a lot to start with. You are going up against institutions placing GIANT orders, and remember that 90% of the time, they grow larger by eating up all the small uneducated accounts out there.
I have been trading for a few years now, but have only recently started trading Forex. I have never seen a thread like it on any forum, but what InnerCircleTrader has posted on here is priceless to a new Forex trader. Check out his thread, watch the videos, do as he says, and write it into a trading plan that suits your style. Then, follow your trading plan and don't deviate. In addition to studying his thread, check out https://www.bsp-capital.com/documents/turtlerules.pdf which are some really good risk management guidelines to use in any time frame.
I'm really not trying to be an ass when I say this, but to be honest, you probably shouldn't trade a live account just yet. There is still a ton to learn. Do the work before you risk your money and you'll be in a lot better shape than the other way around.
If you were a successful gambler then I’ve no doubt you’ll be a successful trader as you know all about the risk management.
My only concern is that you mention you have only been trading (demoing) a few weeks. This really isn’t enough unless you have a real natural flare for it! It would be fine moving to real account if you are only going to be trading really tiny lots to begin with so loses are minimised.
Get a sound strategy and stick to it through good and bad!
OK so I have a lot to learn is the vibe I’m getting from most of you. I don’t get experience in a book and I have to say I can only read so much before I am annoyed. I naturally have a good sense of when I believe I am an underdog and or favorite. Considering all of your suggestions here is my strategy- using 10k lots I will scalp 10-30 pips/day, $500 is a loss I am willing to take for the sake of learning, then revert back to demo trading and trade again in a month or so. If losing 2500 over the next 6 months teaches me to make 2500/month in two years then so be it.
I can’t say I’m suprised… I’m guessing its the way your wired? No offense meant and I hope taken? I do know of someone personally that trades as you intend. They started out with far less than you and in three years are making very large numbers indeed. Its a simple strat and he only ever shoots for a single trade of 20’ish pips a day and out win or lose no exceptions. I might also add that he’s [B]EXTREMELY [/B]disciplined in his aproach! We meet up most Fridays and he mocks me for trading the longer TF’s and I in turn berate him for his cavalier attitude… all in all, healthy banter and a good few beers! There is no right or wrong way to do this when all’s said and done as long as your consistantly profitable?