I’m new to trading on the Forex and would like a little reality check from some more experienced traders before going ‘live’ with real money.
I have been trading on FX now for about 2 weeks using Forex practice software. I’m very disciplined in that I take very small profits at a time and try and stay below 35% of available margin. So far, with 5k in my account, I have managed a little over $400 per week without any losses. I have had tickets where I’ve had to leave them open over night just to return the next morning with them closed out with a profit.
My questions are:
Is it realistic for me to assume that if I keep trading with my current strategy that I can take home a small weekly profit as I have been doing without incurring a lost?
When I leave a ticket open sometimes it will drop to values well below what is comfortable for me loosing - if I were to take the loss (I know that I have been lucky so far in that the prices have gone back up to my TP points over night as well). So, how do I protect my self? What is a reasonable stop loss? If I set them at 5 PIPS, for instance, 9 times outta 10 its going to ping that stop loss before it gets to my profit.
Any advice or comments from anybody would be greatly appreciated.
Do not open a live account!! You’ve been lucky so far, but it’s just a matter of time before you lose all your money.
You cannot keep trading without a stoploss! We can’t really tell you what a reasonable stoploss is, because we don’t have enough information about your trading. There’s not simply a “magic number” that makes for a good stoploss.
I suggest you reread (or read for the first time) the Babypip’s School. It also wouldn’t hurt if you could give us more information about your trading strategy?? It sounds to me like you are gambling, not trading.
Thanks for your reply! I am already trying to get as much info as possible via internet and library. This site is a great resource, as well, and I plan to use it in the future.
Basically (very basically) I set my TP at 1 PIP and don’t expose myself to too many units at a time. I look back on the previous data for the day and set horizontal lines at points of interest. I add a study which tells me when the price averages over a short period of time (usually after drops in price) then I buy when it indicates an upward trend. 9 times out of 10 I reach my TP. The odd one, the price will continue downward after the average.
I try not to gamble (although any investment is one:)).
No offense, but that is not trading, it’s gambling. There’s no way to use any kind of technical analysis to predict movements as small as 1 pip.
The problem with “small TP / no SL” strategies like this is that they work very well for a while, until you hit a small losing streak and wipe out all your money. What good does it do you to double or triple your money when you’re going to lose it all in a few trades??
i understand that most people need to experience this themselves before they’ll believe it, and that’s fine. As long as it’s a demo account keep trading for a few months and you’ll see what I mean.
No offence taken! After all, this is a newbie post, I expect some constructive criticism
So, making trades for movements as small as 1 PIP is bad? I’m not going for huge profits, obviously. My TP point is so close to the buying point that one ‘+ movement’ in the price is almost certain to reach my TP!?
If you were going for a 1 pip TP with a stop loss of 100 pips it’s true you would win about 99% of the time. The problem is that you’d need a 99% win rate just to break even, because when that losing trade does hit it will wipe out your previous 100 profitable trades!!
You’ll never make any money in the long-term with a strategy like that.
You’ve got a good point there… I apologize for pointing out your flaws but not offering any advice.
I’d start by reading about all the different trading systems being discussed on the Babypip’s forums. You’ll find all the information you need about trading strategies right here! The ones I would suggest, in no particular order, are: