Day Trading & Forex Forum

metaron

Hi folks,

Heres just a little bit of advice, something that I wished I'd been told to do when I started forex trading.


Problem #1 Forex novices trade too big relative to their account size.

This problem is compounded especially if your first several trades were winners which they usually tend to be(because your mind has yet to become fearful of the markets).

So at the very time novices should be trading small they are trading BIG.


Problem #2 Forex novices fund their accounts with all money they can possibly use.

This is connected to problem 1. I done it, I wish I didn't. Why oh why does somebody starting out with let's say 20k use that whole 20k for trading in an arena that can take years to learn when they haven't proved absolutely anything about their trading ability yet?

My advice is simple use just 10% of your available funds to LEARN trading. So if you have 20k place 18k of it into an ordinary savings account and just trade with 2k until you either:

1) Lose it all and are thankful it wasn't the whole 20k you lost. You still have 18k, you are still learning and you are still in the game.

2) Have doubled this stake several times over and have a justified confidence in your trading abilities(this will take most years). Then increase your account balance.


Please heed this advice if you are starting trading.


Best Regards

M

revival

Hi Metaron,

I fully agree with yr points. Furthermore, always start with micro or mini account before going for the standard a/c.

Winterbrook

Hi Metaron,

Couldn't agree more. I have just set up my real Forex account, never having traded anything but options/stocks before and funded it with $2500 to learn with. This makes it a micro account. The other thing is to also use small lot sizes as the margins can really sting. Made first two trades at .5 lots and barely had enough left to cover the draw down. Now working with .1 lots right now to get the feel for it.

Cheers

W

revival

Hi Metaron,

Yes, always start with 0.1 and gradually increase therearfter.

montmorencyt2w

Forex beginners could do worse than look here:

Help for Newbies. (Discussion Thread) - Page 2

(Start at the first posting...that link is somewhere within the thread).

Then also look through the "james16 Chart Thread" in the same forum - It is very long though. That should keep them busy so they don't waste money in the markets!


Regards,
M.

Alibubble

This is definitely good advice for new forex traders. Anyone looking to start trading should read these tips first before they mess up big time.

I especially like tip number 2. Don't use all the money in your entire bank account to trade. That is just plain stupid and a terrible idea for any trader, no matter how good they think they are.

Just be frugal and you will at least not lose too much if your trades don't go well.

t2wfx

This falls under money management and it's a lost art...

y0rk

when it starts what is supposed the best pair to win money