Do I Go For It?

[Sang Froid]

This is probably only a question I can answer myself, but would be nice to at least hear opinions from others, after all this is what forums were made for right?

I've been trading for around three years. In that time I've trudged the same old path I believe most if not all successful traders have to follow. I've lost money, blown accounts, wrestled long and hard with my emotions, traded god knows how many systems and strategies out there. I've threatened to give it all up in despair only to realise how much I love trading, I'm sure many of you know this story.

I reached the point where I could breakeven on a consistent basis, and this was the first break through. A bit of tweaking with my trading style and I'm now at the point where I am making small yet consistent gains.

Here in lies the problem. Impatience. I have a very small account, £700 to be exact. Now I know how many stories go from here, over leveraging, over trading kills accounts very quickly. "Never risk more than 2% of your account" I can hear so many saying.

Well I say to hell with it. £700 is f**k all in the grand scheme of things, it's not money I can afford to lose per se, but it's not exactly my rent money I'm playing with. If I can get up to £10 grand in a fairly short space of time I can go part time at work and concentrate on trading. I'm not talking £10 a pip or anything but this whole 2% business with a small account is a hullava frustration.

Without going into too much detail I trade off an H1 chart, I have between 2 and 5 really decent setups a week. My initial S/L is 25 but very often I'm out before then if the trade is going against me. I place two trades on entry, one with a fixed T/P of 25, if this is hit I move the second stop up to B/E and then look for a target according to my strategy, sometimes it can be as much as a further 50-75 pips other times it's at the same level as the first trade.

Here's my thinking from now on:

Account Size-----£pp(2 open trades)

£720---------- 50p
£1050---------- £1.50
£1500---------- £2.00
£2150---------- £2.50
£3100---------- £3.00
£4500---------- £3.50
£5500 ---------- £4.00
£10000---------- £5.00

So with £720 I'm going 50p per pip with two trades i.e if I make 50 pips it's £50 (less spread) I mean I could push it even more than this if I wanted to, I guess at least a part of me is thinking sensibly.

What I'm asking is, if you had faith in your system, and you could make small consistent gains, would you think s***e on it and just go for it regardless of account size. Trade £100,000 like you would £1000? If I know I can make good gains, why shouldn't I just go £5.00 per pip now? What's stopping me? The thought of losing? Maybe it's the thought of being wrong? Maybe it's the thought of yet another blown account but this time I thought I knew what I was doing. Whatever it is, something is holding me back from truly busting my balls and going for it.

Sometimes you gotta take a risk in life right? As this guy says:

"Truly, sometimes you have to risk everything in life and let yourself go . The only difference in those who are in the crowd and the ones on the podium are that they took that extra risk." - Abhimanyu

 

[Splitlink]

This is probably only a question I can answer myself, but would be nice to at least hear opinions from others, after all this is what forums were made for right?

I've been trading for around three years. In that time I've trudged the same old path I believe most if not all successful traders have to follow. I've lost money, blown accounts, wrestled long and hard with my emotions, traded god knows how many systems and strategies out there. I've threatened to give it all up in despair only to realise how much I love trading, I'm sure many of you know this story.

I reached the point where I could breakeven on a consistent basis, and this was the first break through. A bit of tweaking with my trading style and I'm now at the point where I am making small yet consistent gains.

Here in lies the problem. Impatience. I have a very small account, £700 to be exact. Now I know how many stories go from here, over leveraging, over trading kills accounts very quickly. "Never risk more than 2% of your account" I can hear so many saying.

Well I say to hell with it. £700 is f**k all in the grand scheme of things, it's not money I can afford to lose per se, but it's not exactly my rent money I'm playing with. If I can get up to £10 grand in a fairly short space of time I can go part time at work and concentrate on trading. I'm not talking £10 a pip or anything but this whole 2% business with a small account is a hullava frustration.

Without going into too much detail I trade off an H1 chart, I have between 2 and 5 really decent setups a week. My initial S/L is 25 but very often I'm out before then if the trade is going against me. I place two trades on entry, one with a fixed T/P of 25, if this is hit I move the second stop up to B/E and then look for a target according to my strategy, sometimes it can be as much as a further 50-75 pips other times it's at the same level as the first trade.

Here's my thinking from now on:

Account Size-----£pp(2 open trades)

£720---------- £1.00
£1050---------- £1.50
£1500---------- £2.00
£2150---------- £2.50
£3100---------- £3.00
£4500---------- £3.50
£5500 ---------- £4.00
£10000---------- £5.00

Sometimes you gotta take a risk in life right? As this guy says:

"Truly, sometimes you have to risk everything in life and let yourself go . The only difference in those who are in the crowd and the ones on the podium are that they took that extra risk." - Abhimanyu

Perhaps I have misunderstood something here but that looks all right to me. As I see it, disregarding your trading style, you are trading £1.00 for £720.00 capital which, I would say, is a conservative approach. Having said that, don't go mad and trade more! I am an index trader, mainly FT, and that has a margin requirement of £60.00 for £1.00. Cable is £140.00 which I think is still a good ratio for your starting capital-

I have not gone into your reasoning for trading as you do, but assume that you have worked it all out.

Just watch how much you lose on a trade and forget that "breathing space" stuff. If the trade is not right, does not act as you expected, cut it so that you can take a breath, yourself, and start again.

IMO, you should come right.

 

[ffsear]

Its gona take you a while. You will need 70.85 winning trades more then losing trades to be exact (assuming your average winner is 50pts and your average loss is 25pts) to achive what you have laid out here. WIth a TP of 25pts it will take 141 trades!!

At 2-3 setups a week, its gonna take a long time.

Have you considered stepping down to smaller time frames?

 

[Sang Froid]

Right based on above two replies, sod it, I'm going £2.50 pp on two entries until I hit 5 grand then going £5 pp until I hit 10 grand.

I don't have "a while". Three sodding years I've been doing this, unless I can get a bank loan, which is outta the question (student debt) I gotta start trading for proper money. Yes I'm impatient, yes I might lose it, it's only 700 quid right. I have a strike right of 3 in 5 and never more than 3 losing trades in a row (based on 6 months of trading). What's the worst that could happen

 

[ffsear]

Well if you not worried about the money go for to.

I would suggest you stop worrying about £ p/p size and stop loss size. Every trade is different and I don't think a fixed position size or stop loss stratagey ever works. Instead, acess each trade/chart - look to points of support and resistance to decide where to put your stops, then work out your position size from there. Then say risk £100 per trade, so 7 losses and your out.

 

[shadowninja]

The way I see it is that if you're 100% convinced you can do this, then risk 30-40%, which is just £2-300. And put more into the account.

 

[Hilarymannah]

Sang Froid,...Have a gander at the 5 min time frame,..
You might suit it better, personality wise.
The longer the time frame, the more patient you have to be,..and of course, a bigger stop !
Tip: On the 5 min,..look to take 10 pip min' with a 10 pip stop (excluding spread), an average of 20 trades per day.
Just take a look for a week,..and see what jumps out at you : )

 

[Hilarymannah]

BTW: When I say, take a look for a week,...I mean every second, eight hours a day for five days !

 

[megamuel]

Go for it!!!

 

[MrGecko]

"Perfect practice makes perfect" - I would trade using exactly the same risk strategy that you have been trading so far.

If you're trading currencies you could try trading through a broker like Oanda that allows (or at least used to) you to put on custom deal sizes, so you don't have to worry about breaching a watermark high to up the size.

GL

 

[Hotch]

To get to 10k, trading really isn't the way.

Returns for trading are exponential and that's why it can be so lucrative, working is much more linear, but with £700, work is a much better route for money.

The simple solution for getting something faster is to work harder.

You're a bit late for summer farm work (which can pay hilariously well), but I'm sure you can find someone to give you atleast £100 a day cash in hand no problem (so 14 weeks).

Now if you're trading, you need to make 4% a day to reach 10k in the same amount of time, AND you're risking money BUT you might learn more.

Pick your poison.

 

[Sang Froid]

Sang Froid,...Have a gander at the 5 min time frame,..
You might suit it better, personality wise.
The longer the time frame, the more patient you have to be,..and of course, a bigger stop !
Tip: On the 5 min,..look to take 10 pip min' with a 10 pip stop (excluding spread), an average of 20 trades per day.
Just take a look for a week,..and see what jumps out at you : )

I use the 5min T/F for entries and exits. I use the H1 to identify my setup. I wouldn't like to trade just off the 5min, I have a history with overtrading accounts. I am patient enough to wait for setups, between 3 and 5 a week is fine for me, it's when they come along I'm always kicking myself that I coulda made more if I'd just risk more. I feel like I'm holding myself back because I've been burnt in the past. If I can get consistent small gains, what is stopping me getting consistent larger gains by risking more capital... well obviously psychological reasons might stop me i.e this is more money than I'm used to.... but as long as I focus on the trade and getting entries and exits right then all should remain the same, just my account grows quicker.... right?

 

[fleetwood]

Hotch has got a good point. Probably easier to just work your **** off for a few months so you can quickly build your money up. Making a couple of grand a month working hard is no problem. Just get a day job then maybe a bar job in the evening.
Personally I risk 5% on a trade but opportunities dont come that often for me so I think its ok. If I get it wrong then next trade is just 2.5% and so on. Last month I had 4 trades and for me that was a pretty hecktick month lol. Best of luck mate

 

[wallstreetwarrior87]

I would suggest that Hotch has the right idea on this.

If you traded for long enough and have a large enough sample size of trades in all market conditions, then there is no need to begin with £700. Work an extra job for a while and build up a nice pot (say £5000). Why £5000? Well this will open the door to most futures markets. Why limit yourself just to forex? S/B and bucket shops?

This 2% risk that everyone goes on about is relevant to what you know. Every situation in the market is NOT the same so why should the risk be?

Starting with a small account is fine if you are tipping your toes in, but it can also lead to reckless trade selection because the money"doesnt mean that much" to you. Which can lead to treating this business like a hobby.

If you have true confidence in your ability then you dont listen to anyone but yourself, because only you know what you can achieve.

Be patient, and build a decent pot that wont limit you too much. If you are good then you will be turning over the account in no time. If youre not patient enough to wait while you amass some capital then this may prove that you dont possess the required temperament to really make the most of this environment.

You have the choice to do trading as a hobby or as a career.

Good luck with whatever you choose.

 

[Sang Froid]

Ok, firstly I understand Hotch's, Fleetwood's and WSW's points of views. But, since leaving uni last year I now work a crappy day job getting by paying off debt, rent, bills, the usaul rubbish that everyone has. I work my **** off as it is let alone working more just to save up money to trade with. If I can use the money that I already have in my trading and make it work for me then alls the better.

That is the idea, at one stage I was looking to make 20% per month risking 3% per trade. All very nice and conservative if I had a larger account and trading was my full time job and was my only source of income.

Trading isn't my only source of income, I have my monotonous day job for that. Once I hit 10 grand fair enough I'm happy to go back to 3% per trade to protect my capital, slow things down, but to me, trading really isn't worth it for anything under 10 grand.

 

[Devilicus]

You're a bit late for summer farm work (which can pay hilariously well), but I'm sure you can find someone to give you atleast £100 a day cash in hand no problem (so 14 weeks).

Doing what?

 

[Hotch]

Doing what?

Hod Carrier is a classic, I'd guess a good brickie goes 5x as fast with continuous supply of bricks, you've got to be able to keep up though (not as easy as it sounds, they can go some). So if he's earning 5x you can often get a cut of 2x his normal daily salary (which is well over £100/day).

Really anything with manual labour pays well (in the UK) because our country is full of lazy prats.

I'm sure you could earn money doing various stuff online, but I have no knowledge or that really.

 

[Sang Froid]

Hod Carrier is a classic, I'd guess a good brickie goes 5x as fast with continuous supply of bricks, you've got to be able to keep up though (not as easy as it sounds, they can go some). So if he's earning 5x you can often get a cut of 2x his normal daily salary (which is well over £100/day).

Really anything with manual labour pays well (in the UK) because our country is full of lazy prats.

I'm sure you could earn money doing various stuff online, but I have no knowledge or that really.

I'm 5ft9 weigh about 9stone and ginger. Hod Carrier, indeed a classic

 

[Hotch]

Well be a hod carrier for a month, shave your head and you're sorted!

 

[Shakone]

The point that was made earlier was that at 700 it isn't the best way to increase your account. You get 2-5 good signals a week. Lets say it is a good week, and you get 5. Lets also say you win 3 and lose 2, again pretty good, and your average pip win is 35, average loss is 25. THen you'll get 55 pips in that week. At 50p a point, you'll pull in £27.50. At £2.50 a point, you're ridking 9% a trade, and even if you trade well you'd have £137.50 for your weeks efforts. And that is on a GOOD week, with lots of opportunities, and you trading well - which most people couldn't do at 9% a trade. Not every week is going to be that good, you may well have losing weeks.

Do you not think you could find a way to make £137 in a week. Saturday job? Bar work?