Turning Pro

Hi all clap

I know that some on here are full-time currency traders & was just looking for some advice. I have not done a lot of trading (except betfair) & am more of a fixed odds man. Though at the moment I am probably a bit of an amateur in terms of staking etc.

I know, being a seasoned betfairian, that I am really too niave to risk etc & really am looking to diversify my investments - hence to work on the currency markets. After developing a decent stratergy (not for sale) I am going to commit £1000 to it. I know it's not a lot but I would appreciate some help on staking.


There are no set Stop Losses, though I generally exit 1/2 at 50pips down, then the rest at 75pips. Each trade is customized to what I think. At the moment I am intending on trading 10% of my bank a go @ 10:1 leverage (in other words my whole bank). But with my stop rarley being hit (1 in around 15) & the average loss representing about .5-.75%, I see no harm.

My question - is this financial suicide? :-0

absolutely.... until you have acheived at least 6 months consistent results you shouldnt put a cent towards this. 10% per trade is a one way ticket to margin call. lastly you must always use stops and you should have defined risk/reward before every trade.

If you are going to work with £1000 with only few trades per week you should not risk any more than 0.5-1% to start with.

As the risk is so low the trurn will be low as well.

The question is it worth it to put in all this work for such a little return in money terms not %.

This amount of capital is not for day trading and important to keep in mind the massive cost of spread with betting houses.

Baldur

ofurbaldur said:

If you are going to work with £1000 with only few trades per week you should not risk any more than 0.5-1% to start with.

As the risk is so low the trurn will be low as well.

The question is it worth it to put in all this work for such a little return in money terms not %.

This amount of capital is not for day trading and important to keep in mind the massive cost of spread with betting houses.

Baldur

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i agree with you totally but i think that although it will take time you get an advantage. you get to home your skills and slowly build your account until it is huge. yes it takes time but rome wasnt built in a day

Kingwizz said:

Hi all clap

I know that some on here are full-time currency traders & was just looking for some advice. I have not done a lot of trading (except betfair) & am more of a fixed odds man. Though at the moment I am probably a bit of an amateur in terms of staking etc.

I know, being a seasoned betfairian, that I am really too niave to risk etc & really am looking to diversify my investments - hence to work on the currency markets. After developing a decent stratergy (not for sale) I am going to commit £1000 to it. I know it's not a lot but I would appreciate some help on staking.


There are no set Stop Losses, though I generally exit 1/2 at 50pips down, then the rest at 75pips. Each trade is customized to what I think. At the moment I am intending on trading 10% of my bank a go @ 10:1 leverage (in other words my whole bank). But with my stop rarley being hit (1 in around 15) & the average loss representing about .5-.75%, I see no harm.

My question - is this financial suicide? :-0

Click to expand...

Hi there,

I thought that I would add my 2p's worth to this. As someone who has traded betfair horse prices in the past I may be able to see where you're coming from.

IIUC you are going to start with £1000 and put aside £100 to cover the margin of each trade and to trade at 10:1 leverage so that each trade will have a position size of £1000 but you could in theory have up to 10 trades on at a time. I am guessing that you may be trading cable (GBPUSD) as a £1000 position will mean 10p per pip and 50 pips will £5 which is indeed 0.5% of your account. Your average loss figure of 0.5% to 0.75% per trade seems fine and shouldn't cause any problems and I think that the person above who was going on about risking 10% of your account was mis-understanding what you are proposing. However you should also consider carefully what your biggest loss will be as well as your average figure. It's all very well having average figures of 0.5% but if you get an occasional hit of 10% then that's a lot to come back from. Many traders risk a fixed percentage of their account (e.g. 1%) on each and every trade with an actual stop-loss to enforce this.

Things that you may wish to consider:

1. Perhaps have an actual catastrophy stop in the market at say 100 pips (1%) in case things go pear-shaped too quickly for you to get out. I would perhaps dispute the point above that you have to have stops as it does depend on the experience of the trader and many pro's use mental stop levels for their exits. Someone such as yourself who's being trading on betfair for some time probably has the correct discipline about losers but a back-up stop loss might be worth using.

2. As pointed out above, trading this small isn't going to make you much money: a 100% return p.a. is still only £1k but I am a great fan of trading small sizes with real money rather than paper trading as a way to test out a system. You will need to find a forex broker who will let you trade any size.

3. Speaking of brokers you will have the whole issue about brokers and their conflict of interest. Betfair are a genuine exchange so there's no problem there but many forex brokers are actually taking the other side of your trade and since they get to quote you the prices there is a conflict of interest. If you are trading small enough they won't really bother doing this so I would suggest someone like OandA to start with as you can trade any size and they won't get worried about losing money to you until you start trading getting on for $1mio sizes. At that point switch to an ECN such as HotSpot or Currenex who are an exchange but have minimum trade sizes which will be too large for your present trading.

4. One other consider is correlation: if you are trading up to 10 positions at a time (I don't know whether you actually are but it's possible from what you've said), then you need to be careful that your ten positions aren't actually the same position 10 times over. If they are all short the USD for example and it rallies sharply you will get a 0.5% to 0.75% loser on each of the 10 trades so your actual account loss will be 5% to 7.5%.


Good luck with it all.