When do I start

Beginner Questions
1

My fellow forex traders-

It has been more than a month that I have been able to protect the initial capital of 5000 USD on my demo. Not only keep it, but grow it by about 10 % to 5550 USD.

Before this period, I did not use any indicator to trade-I had no idea even about simple concepts like EMA or MACD etc. Now with the help of this forum and distinguished members like MP I have been profitable and learnt advanced trading concepts.

I am in a dilemma though- I have promised myself that if by February 15th 2009, I am able to grow my account to 6000 USD I will open a live account with an initial cap of about 3000-4000 USD.

Can y’all throw some light on if there are parameters that decide when a trader is “qualified” to go live. Are two months of consistent profitable results enough or do I need to practice more? There is no hurry as long as my 9-5 gig is working (which is shaky in these days :slight_smile: ) but I feel that real the money the more you learn.

Any inputs are well welcomed.

Again Thanks mucho!

1Tex

2

IMO, as soon as you have an edge you can execute repeatedly on demo, you should start slowly on a live account. An edge is a trading strategy that gets you a good win loss ratio, like 15/20 An edge says that when you go in a trade and execute properly it is more probable the trade will go good for you.

I see people who demo and backtest for months and months and even years. IMO, this a huge waste of time unless you are so unskilled you have never learned anything about trading and developed a repeatable edge.

Once you have a definable, repeatable edge it’s time to see if you can make it work in the real world.

Everyone says over and over that experience is the most important thing. Well, demo trading gives you exactly 0 experience. Demo trading isn’t even the little kiddie pool.

Also, there is no reason not to start a micro account with a very small size, as your first account. With brokers that allow you to fractionalize lots you can start very small and easily manage your risk and money management. Undercapitolization is only an issue if you try to trade lot sizes to big for the account. With the fractionalizing you can effectively trade very small accounts and learn to trade live without risking much.

If 3-4K is nothing to you and you wouldn’t care if you lost that amount a few times a row, sure start their.

I started my live micro account with IBFX with $100. I can fractionalize lots all the way from .01 cent to $5.00, all the way to the second decimal.

Once I compound it enough I’ll change the account over to the next account level up. I was tempted to start with a few K, but then I thought if I can’t trade a $100. and compound without first losing my account, I’m sure not going to be able to do any better with a few K.

I don’t subcribe to the, “never ending demo training,” way of thinking because I’ve found that with just about everything I’ve tried in my life the best and fastest way to learn it and become good is to do it for real. Learn the lessons that doing it for real will teach you quickly. I’m not saying jump in with a huge account and try to play with the big boys in the deep end of the pool. But, at least a small live account. Though, only when you think you have put together a repeatable edge with a good win/loss ratio.

3

Yeah did not think of it that way…a 500 micro at 1 pip = 10 cents is same as a 5000 mini with 1 pip = dollar. Come to think of it as 500 dollar fee for some real life training :slight_smile:

4

while setting “deadlines” for something like forex is a bit silly, Phoenix’s common sense solution should give you some “on job training” that may well work for you.

SMALL account and just see what happens !

youll find out soon enough if external factors come into play or if the “psychology” of real money alters your trades.

while 500 may be larger than what i consider “small”, if one can grow a small account in this day and age, one can probably grow a larger one also !

remember what you learned about managing your money and how much risk to expose yourself to and go dunk your head for a while since youre so hot to trot !

hope it works well

mp

5

Hmm…so if 500 is large for a small, then I will open one with say 250 :slight_smile: It is small change I earned today, working half a day at my high tech, left hemisphere churning job :wink:

My Grand POA is that I will trade micro lots–one pip = $0.10
So kind of maximum exposure that I will have (based on my style) will be about 10-12 dollars per trade. If all goes well, I will upgrade to a mini.

Let us see, let us see where this road takes me. Afterall what is sexy about making 3 dollars a day at the rate of about $1/Hour but as you said, if small can be cultivated then the large shall pose no major prob-huh-lems :slight_smile:

Thanks guys, and have a good weekend. I dont know about any of you in the feezer in up north but its lovely weather we are having today in fort worth (a balmy 70 degree) yummy!

1tex

6

Good original question 1 tex and good replies. I hope I am in the same dilema soon.

7

Sandpipper-

yes you will be. I can only give you a word of advice-chose forex for all the right reasons and not the wrong ones- while it may prop you up and gain a large % for you it may also make you go broke- so give it a solid foundation.

Before you go live even with a small amount- develop a strategy-i leanrnt this the hard way. As a matter of personal preference, and opinion I believe forex can give you about 1 % return a day- aiming any higher could be just overkill.
I wish you best!

1tex

8

in a past life i would be packing to be heading somewhere south, and that includes all the way DOWN there past the equator, but now my life is here and my daughters will not allow me to become a snowbird, living the winters in florida and the summers up here (i live 3 miles from them, after all) so one buys the best of eddie bauer, stocks up on grub and single malt scotch, decorates the hovel as best as one can and waits for robins and buds on the trees.

was funny when we used to go to LA or florida in the winter — the crew would get off the plane and strip down to t shirts while the residents would be wearing coats down to here, especially the LA’ers !

oh well

the McGivers keep me warm at nite !

mp

9

ok this is too funny- no offense to any one but you got to read what chubspips replied. This is so funny Lol

http://forums.babypips.com/newbie-island/18783-really-stupid-idea.html#post85630

10

Probably you can factor in all other, and yet be ready to move-but the thing I doubt will hold back is the McGiver sisters. :slight_smile:

Btw, now why dont you unshroud the mystery about whether there is a mcgiver sister or sisters :slight_smile: because that will be double the warmth no???

:eek: