I need help getting better.

[Micky89]

I am really new to trading. I trade forex as I work full time and so have a bit of time after work to dedicate to trading.

I deposited £100 and obviously being an amateur I lost over 50% pretty quickly. After reading more and doing some research I managed to get back to to £30 in profit. I had one loss in 16 trades (probably why I ended up losing it all, I got too confident).

I'm trading micro lots (I think). The quantity I choose is '1'. As soon as I buy or sell it starts me at about -£1/-$1.50.

I feel as though I'm getting decent at choosing when to get into a trade but when it goes wrong I find it hard to cut my loss. I tend to wait for a U-turn, and sometimes it works and I close small in profit or evens. BUT when it doesn't turn I end up leaving it to run hoping that it will be ok.

Yesterday it wasn't ok. I exceeded maintenance margin and it closed in big loss.

I know I need to use stops properly. I need some simple pointers on where to use them. Also how much would I need in my account to be able to wait for the swing of the trend to be in loss but have enough in the bank to wait it out?

Now a little detail in my method so that you can tear it apart and help me build it up. I choose my entry based on slow stochastics, resistance and support prices, use larger time scales to check trend (I use 5m to find entry) and candlestick formation.

I find a currency pair with the price at a point of established resistance or support and I will only sell on an overall downtrend and buy on a overall uptrend. Once it's there I will check the stochastic to see if its deemed overbought/oversold. Once that's been confirmed I then wait for a candlestick formation that could signal a change in direction. That's when I jump in

In most of my trades I have the chance to close with a £1/£1.5 profit. Fairly often £2/5. Is that a good profit to take with buying one micro lot? When I have a loss though its large as I don't take a loss.

Any help would be very appreciated.

Thanks guys.

 

[forker]

You should look at every trade off the bat from a risk standpoint. If there isn't a level with sufficient resistance that will serve as an area to buffer order flows then just wait for the next one that does. Unlike city traders you are not performance pressured and as such you have the benefit of time on your side. If it isn't a high quality scenario then it's a high quality failure for sure. So if I can give any advice it would most definitely be to work your stop orders as you place your trade. If you mess up and price has moved against you and that stop isn't in the market then get out immediately. You are far better off doing this than feeling the pain of massive losses psychologically. Another thing is learn to take a loss as a factor of this industry because as much as you hear people on these forums saying they hit most of their trades, most of it is rubbish. The fact is you can have a 20% win ratio and still be in the money if your strategy allows it.

Years ago I used to take losing trades very badly and do stupid things. I began having to stop trading immediately until my mind was fresh and the loss wasn't an issue. Eventually I began to understand that I was my own worst enemy and that's when my understanding of approaching the market defensively turned my weakness into something I could effectively control. Everyone is obviously different and this might not work for anyone else, just sharing if it may help.

 

[spreader_legger]

Try lower leverage. Anything in the region of 1:100 is ridiculously high.

 

[Jason Rogers]

Hi Micky,

Welcome to Trade2Win

I'm trading micro lots (I think). The quantity I choose is '1'. As soon as I buy or sell it starts me at about -£1/-$1.50.

The fact that you're immediately at least a pound the moment you open a trade indicates that you're trading mini lots (10k) instead of micro lots (1k). With micro lots, you'd be risking 1/10th the amount per pip. As an example, take a look the Simple Dealing Rates window below which shows the pip cost in GBP for each currency pair. For currency pairs like EUR/USD you're risking about 0.06 GBP or 6 pence per pip, so you'd start out being down only 10 to 15p when you open a trade instead of being £1 to £1.50 down.

source: Trading Station​

I deposited £100 and obviously being an amateur I lost over 50% pretty quickly.

Try to limit your risk per trade to only 2% to 5% of your equity. I prefer to risk only 2% but that would be tough with £100. Risking 5% means you could risk about £50. That equates to about 80 pips on a 1k EUR/USD trade since the pip cost is about 6p

I feel as though I'm getting decent at choosing when to get into a trade but when it goes wrong I find it hard to cut my loss. I tend to wait for a U-turn, and sometimes it works and I close small in profit or evens. BUT when it doesn't turn I end up leaving it to run hoping that it will be ok.

Yesterday it wasn't ok. I exceeded maintenance margin and it closed in big loss.

I know I need to use stops properly. I need some simple pointers on where to use them. Also how much would I need in my account to be able to wait for the swing of the trend to be in loss but have enough in the bank to wait it out?

In addition to limiting your risk to 5% of your equity per trade, try limiting your leverage to below 20:1. That means having at least 50 in your account for every 1k you control in trade size, since 1k is 20 times larger than 50. With £100 in your account you have up to 2k in open trades at one time. You could risk 2k on one trade, or risk 1k each on two separate trades.


Good luck and good trading!

Jason

 

[fx turtle]

You're just starting out. You OBJECTIVE should be to LEARN not to profit.

What are you trying to achieve with your 100? Having a mentality of getting rich quick will lead you to the slaughter house pretty quick. Trade 1 microlot per $1,000 in your account until such time that you have learned the truth.

Keep this words in mind that to be successful in this market you should have the following:

1. Be patient
2. Risk management (While learning, do NOT risk more than 1% per trade)
3. Be decisive
4. Be focused
5. Be disciplined
6. Cut the loses right away (Do not practice "hold, hope, & pray" strategy
7. Let your winners run
8. Be consistent (Do all of the above over and over again)

Cheers,
FxTurtle

 

[Micky89]

You're just starting out. You OBJECTIVE should be to LEARN not to profit.

What are you trying to achieve with your 100? Having a mentality of getting rich quick will lead you to the slaughter house pretty quick. Trade 1 microlot per $1,000 in your account until such time that you have learned the truth.

Keep this words in mind that to be successful in this market you should have the following:

1. Be patient
2. Risk management (While learning, do NOT risk more than 1% per trade)
3. Be decisive
4. Be focused
5. Be disciplined
6. Cut the loses right away (Do not practice "hold, hope, & pray" strategy
7. Let your winners run
8. Be consistent (Do all of the above over and over again)

Cheers,
FxTurtle

I'm trying to slowly grow the account to such point that I can trade higher amounts. How can I only risk 1% per trade? I have £160, so that would be £1.60, but the spread alone leaves me £1-£1.50 as soon as I open a position. that leaves me no margin for error and I would be stopped out almost immediately.

How can I get around this?

Thanks

 

[spreader_legger]

As my friend mentioned before, sounds like you're trading mini lots not micro lots. If your current broker does not allow it ... try switching to something like alpari or oanda .... they're all sh*t so don't really want to endorse any of these bucket shops. However if you want to learn and have so little capital, probably not a bad place to start.

Then when you get some more capital from somewhere and are confident you can switch to something like Interactive brokers or something similar .... most will ask for a minimum 10k USD capital, but ideally you would have more.

This is not a get rich scheme. Anyone who promises otherwise is bullsh*ting you.

Bonne Chance

I'm trying to slowly grow the account to such point that I can trade higher amounts. How can I only risk 1% per trade? I have £160, so that would be £1.60, but the spread alone leaves me £1-£1.50 as soon as I open a position. that leaves me no margin for error and I would be stopped out almost immediately.

How can I get around this?

Thanks

 

[Micky89]

As my friend mentioned before, sounds like you're trading mini lots not micro lots. If your current broker does not allow it ... try switching to something like alpari or oanda .... they're all sh*t so don't really want to endorse any of these bucket shops. However if you want to learn and have so little capital, probably not a bad place to start.

Then when you get some more capital from somewhere and are confident you can switch to something like Interactive brokers or something similar .... most will ask for a minimum 10k USD capital, but ideally you would have more.

This is not a get rich scheme. Anyone who promises otherwise is bullsh*ting you.

Bonne Chance

Ah right, I thought there may be a way to change settings to trade micro lots. I'm with CityIndex at the moment.

A minimum of 10k! long loooong way off!

Thanks for the reply.

 

[spreader_legger]

Many ways to skin a cat. Don't let the dollar amount put you off.
But do realise that in order to make a living out of this, you will need many
years experience and sufficient capitalisation. Also take any advise from
anonymous members on forums such as these with a pinch of salt. The more
they brag, the more you can be certain they are either unsuccesful or have
ulterior motives.