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Lot size question

Discussion in 'Beginners Bootcamp' started by Demus, Feb 21, 2011.

  1. Demus

    Demus Private

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    Hey Guys, I have a newbie question has the market ever move more than 1000 pips in one direction, if yes what is the max it has move within the past couple years? I'd like to know if dividing my equity by 1000 is a safe bet in calculating my lot size I don't like to trade with stop losses I prefer to wait until the market comes back around before taking my profit. I usually divide by 1500 - 2000 but I'd like to start dividing my 1000.
     
  2. salako Afolabi

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    U might burn your fingers

    By not using a stop loss to define your risk management might be a dangerous trading game. It is like running through a traffic control light that has already shown a RED light for you to stop and be cautious, u might not get to ur destination safely...that is if u ever get there at all.
     
  3. John Bozeman

    John Bozeman Private

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    ^^^^
    It's like running a red light with 3 semi-trucks pulling into the intersection from different directions at the same time, all carrying explosives.

    However, it's usually within 12 weeks that it has moved 1000 pips, but this number is always, always fluctuating depending on everything that is happening in the world.
     
  4. f-man

    f-man 4Xangels Representative

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    Hi Demus,

    I have attached three charts that show you how 1000 pips of movement looks on a daily, weekly and monthly charts. Look at those spikes on the monthly till it moves 1000 pips. Each of them is several hundred pips. You need very good psychological control to keep such trading strategy running correct and keeping disciplined targets.

    There are many traders that use this kind of strategy, but you need really big account to do that or else your profit will be very very tiny.
    What is the TP that you are aiming? If you are aiming to get 100 pips, then one losing trade will have an impact of 10 profit trades. That is not a healthy strategy.
    If you are aiming at 1000 pips TP, consider the swap cost that this strategy has. You might make a profit in pips, but end up in a loss of money because of the swap!
    You have to negotiate with your broker the swap cost and really, only in the case that your account is big enough.
    Do not divide your equity by 1,000 if you have 1,000 pips SL. You have to divide your equity by 10,000, because 1 pip = $10

    So, if your account is small, start considering an alternative strategy. Whatever you come up with demo test it for 3 months. If it is profitable, then go ahead with it.
     

    Attached Files:

  5. Demus

    Demus Private

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    thanks for your reply guys :)
     
  6. SilverOne

    SilverOne Private

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    I think if you like to open long positions better to you use big lots, as for me i like use micro lots 0.01, it is true that you can't win a lot of money but it gives the garantee that you will not lose a lot. I prefer to minimize my risks.
     
  7. Romeo

    Romeo Sergeant

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    It depends on the size of the account!
     

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