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What kind of a trader am I?

Migz
Sep 14 2011 at 23:21
posts 12
Hi all,

Im new to myfxbook and new to the world of trading currency and was hoping someone could look at my system and let me know if it has any major flaws.

I'm practicing with a demo account and plan to keep doing so for a while but was wondering if my lot sizes are too big? if i set trailing stops and they are executed in a short period of time am i scalping and will i have problems with brokers due to this?

would appreciate if you guys could find my demo account vgdemo1 as im not sure how to link it here.

Any advice would be great!

Many Thanks,

Migz


Gary Sharp myfxpt com
myfxpt
Sep 16 2011 at 04:15
posts 345
Hello Migz,

Lot size is a bit steep and exposes you to high risk. At 25 lots you are putting up 25% of account capital on each trade, and whilst your results to date show that you are doing well, these are extremely short-term trades. A single sizeable move against you could wipe out your account in a single trade. Take the recent move in the CHF for instance. Had you been short, fantastic, but had you been long it's GOODNIGHT!

Prudent money management suggests that you risk no more than 2% of account funds on any one trade. This is not the amount you put up, but the amount you allow for your stop-loss.

Where abouts in Oz are you? I am in Melbourne.

James_Bond
Sep 26 2011 at 12:54
posts 556
Yes, I agree with sharpforex - you're over leveraging your account which will probably get you a margin call sooner than later. Are you doubling your lot sizes after losing trades? If so, then that's a very dangerous way to go.

Besides the above, you have a 81% of winners and a positive expectancy of 5 pips per trade, so you obviously have a working trading system, so great work.

Martin Birrell (mbirrell)
Sep 27 2011 at 10:08
posts 22
Looks like you are doing pretty good to me...

Migz
Sep 30 2011 at 08:56
posts 12
Hey All,

Thanks for the tips and support, what you have said makes alot of sense.

So i think i'll try to use a smaller lot size allowing for a more comfortable stop and possible longer time frame.

@Sharp I'm in Canberra.

Many Thanks - Migz

Martin Birrell (mbirrell)
Sep 30 2011 at 10:41
posts 22
Be very carful using stops - it is a better stratery to watch your indicators and chart - know what they are tellling you - i.e. when they alert you to close the order. If you practice this instead of just guessing by using stops you will become a much smarter trader. Remember no-one knows for sure what the market is going to do next, all you can be sure of what it has done in the past and what is doing presently.

hasanmumtaz
Sep 30 2011 at 17:32
posts 8
Things look great so far, I would recommend you to apply and practice your strategy on $1000 demo account. That will give you a far better idea of money management. Moreover be firm when choosing currency pair as trading on too many pairs will develop a sense of gambling rather than trading in your early career. Never risk more than 2-3% of your account because we never know about next move that market takes. Hope that will help you.

Gary Sharp myfxpt com
myfxpt
Sep 30 2011 at 22:55
posts 345

   mbirrell posted:
   Be very carful using stops - it is a better stratery to watch your indicators and chart - know what they are tellling you - i.e. when they alert you to close the order. If you practice this instead of just guessing by using stops you will become a much smarter trader. Remember no-one knows for sure what the market is going to do next, all you can be sure of what it has done in the past and what is doing presently.


The problem with this is that it does not protect against sudden and unexpected factors, i.e. recent Swiss devaluation. By the same token I agree with Birrell in that abitrary stops are quite meaningless, and in fact they can be dangerous. Stops should ideally be set slightly beyond nearest support/resistance, or just beyond a system signal (just in case you are not watching the indicators), so that your stops actively support your trading system. The stop value should, ideally, be no more than 2% of the account balance.

Gary Sharp myfxpt com
myfxpt
Sep 30 2011 at 22:58
posts 345

   hasanmumtaz posted:
   Things look great so far, I would recommend you to apply and practice your strategy on $1000 demo account. That will give you a far better idea of money management. Moreover be firm when choosing currency pair as trading on too many pairs will develop a sense of gambling rather than trading in your early career. Never risk more than 2-3% of your account because we never know about next move that market takes. Hope that will help you.


Good advice!

Migz
Oct 01 2011 at 00:16
posts 12
Thanks, that's very helpful.

I think i'll take your advice and open a new demo with a lower starting capital as this would be much better practice for when i do go live i think $100,000 is probably not the amout i'd be looking to start with🙄, as you guys said the money management will be the big issue. if the first few trades went against me the account would be in serious trouble and my confidence would be shot.

So maybe i'll focus on the euro/us and do some math before opening positions to limit risking too much on each trade.

        Also - trailing Take profits - do they only kick in when mt4 is opened ?

Thanks Again for all the great advice!

Migz

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