New to trading - reality check

littleangie01

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Hello everyone. I've been short term stock market investing for the past 2 years unsuccessfully. Past 7 months have improved since I've learned some technical analysis.

I've just opened up a spreadbet and a little dabble in Forex £1 per point made a bit then lost a little. I'm just on with a MACD and Moving Averages trading system and testing it out paper trading.

To be honest I really am questioning my sanity on trading, I'm terrified of things getting out of control. I sway between visions of mega bucks and losing my home.

I have a job which is why I've chosen Forex as I can trade outside of office hours. My idea is to stick to £1 per pip with no more than £200-300 in my account in case I blow myself out. However I have a sneaky feeling that's perhaps how many started out and then somehow got out of control.

Thank you:confused: for reading - appreciate any pointers, cautionary words, telling offs.
 
You're trading too big relative to your account size.

1 euro is about $1.45 per pip. And you have a 200 - 300 euro account. You're going to wipe it out in no time.

The amount per pip should be determined by your stop sizes, and your stop size should be determined by the amount you're willing to risk on that particular trade. It's often advised that you should risk no more than 1-2% of your account. At your current size you would need a stop size of around 3-10 pips. Which can be done, hell I use stops of 1-6 pips. BUT, if I traded this way in the very beginning I would have blown my account.

You should definitely read the ENTIRE babypips school program over at the babypips website. Make sure you read it ALL and ace EVERY quiz before trading. If you're unable to exercise the discipline and restraint to go through that entire program, then there's no way you'll make it in Forex.
 
Thank you, I had a feeling I was getting ahead of myself - I have a lot to learn. Love the babypips site, made me laugh, on my way there...

Thanks again!
 
Empty or close down your account, Then sign up with Smart Live Markets.

They run at 10p a pip, so on Forex your £200-£300 will give you a decent 40-60 pip stop loss at a decent 2% risk.

Then start to increase your size slowly when you are consistently profitable.

Jason
 
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Just looked at their site and on with demo, 10p per pip is brilliant. I thought £1 was lowest you could. I found this site by accident so glad I did. Thank you Jason.
 
Just looked at their site and on with demo, 10p per pip is brilliant. I thought £1 was lowest you could. I found this site by accident so glad I did. Thank you Jason.

Good, glad to help.

When you are reading about trading and strategies on babypips or trading books in your lunch time, always have in the back of your mind what would suit your personality, (i.e. Your psychological needs of amount of wins to loses and the degree of the loss to each win).

And the time windows you have you have to trade, i.e. do you want to trade for a couple of hours a night, if so do you want to close all trades in that time, if so you will need high frequency set ups (keep in mind with spread betting the fewer pips you make in a trade the higher the transaction costs are as a percentage) or do you want to spend that time looking for daily and weekly set ups i.e just entering, exiting or moving stops for daily trades. So when researching try and think about what will suit you.

This forum and many books will have lots of wild goose chasses and dead ends for you, so try to concentrate on research that fits your original ideas about trading.

There is no one answer in trading because no two people are the same.

Good Luck

Jason

Edit: The simpler your strategy the better, this will allow you space to focus on the parts of trading that really matter, your discipline, your emotions, refining your strategy and money management.
 
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Alpari.co.uk is another option - 10c per pip = 6-7p/pip. Take your time, learn the ropes slowly.

People lose their homes when they abuse leverage and do £20/pip without bothering with a stop. Things can get out of hand very quickly when you refuse to take a small loss.
 
Thanks Jason and Shadowninja. I've gone back to paper trading today. This is incredibly difficult, just losing, albeit very small, so I'm not sure if that's progress. I'm nowhere nearer anything like a workable system, but it is very early days.

Youtube video - very scary!

Happy Easter you guys!
 
You, too.

Just have to keep watching and testing. Your head will slowly suss things out.
 
To shave a huge amount of time off your learning curve, and perhaps to save you from a lifetime in limbo, focus on one method that you create. You can take a bunch of things you learn from sites, other traders, etc.. But use them in a way that fits with the way YOU want to trade. Make it suit YOU. Then, trade your method. Over and over. Don't jump around. STICK TO IT. MAKE IT WORK. If you get to the point where you've done everything you can to refine it and it doesn't work, then begin to look for some changes. But the key is to stick to one method. If you keep changing things, as most people do, you will run in circles forever.
 
Thanks Trankuility - yeah I've noticed I'm jumping from one thing to another :-(

I'll clear off now don't want to take up too much of everyone's time. Though I'm sure I'll have a million more questions soon.
 
what a refreshing newbie. Having a go before asking questions.

You've already done the hard part in recognising some weaknesses within yourself and realising that trading is not easy and a risky game.

Well Done and good luck.
 
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