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Whats a good amount to start with?

Discussion in 'Beginners Bootcamp' started by fxhalo, Sep 25, 2007.

  1. fxhalo

    fxhalo Recruit

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    Hello :) I just opened a demo account with oanda. I have been told by several people that I should practice on this demo for at least a few months until I'm comfortable. After that, however, whats a good amount to start LIVE with? 200 dollars or more?
     
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  2. 3BlackCrows

    3BlackCrows Corporal

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    Hi FxHalo,

    Minimum suggested starting bank would be $10k (seriously)

    However I assume you don't have that kind of capital lying around so here's what I suggest:

    Save as hard as you can during your demo phase and when you're ready to go live, use that.

    Barebones it should be at least $1k using no more than 10:1 leverage and even that's pushing it a bit.

    Only start trading live when your system proves to you to turn a profit after at least 3 solid months of demoing it.

    Also expect to lose the whole lot as part of the learning curve

    When you're trading live there are certain irrefutable laws of Forex you must adhere to or you will be wiped out:

    1. Trade every signal without hesitation that your system gives you even if you get a string of bad trades in a row.

    2. Respect your stops at all costs - Often price will retrace to within 1 Pip of your stop then reverse again in the correct direction of the trade. Also do not replace your stop on a losing trade thinking the market will turn in your favour.

    3. Control your emotions - Live trading is a whole different ballgame to demo trading. Fear, greed, anxiousness, impatience and overconfidence will creep into your psych and ruin your trading mind.

    4. No one ever talks about this but it's just as important - Never sit and watch your trade tick by tick, you will go nuts. When price is retracing toward your stops, panic will set in and you may pull the trigger to end the trade before your stop gets hit. As soon as you end what you thought would be an unprofitable trade, Murphys Law steps in and price reverses to the direction where you expected to go.

    I suggest walking away after a trade is placed and doing something else for at least 3 hours then coming back and checking on it. Try it while you demo.

    In saying that this doesn't apply if you are a scalper.

    Don't mean to lecture you but these things you need to know and I don't think any real trader reading this worth his/her salt would disagree.

    Master these things and you will be in for the most thrilling ride of your life. There's nothing more nutritious than waking up and having pips for breakfast :D

    Hope this helps.

    Good luck and happy trading! :)
     
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  3. fxhalo

    fxhalo Recruit

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    Wow

    Wow, I have to say, that is probably the most insightful answer that I have ever received from any forum! :) You sound like you have been around this market for a while and know what you are talking about. Thanks again. If you don't mind me asking, what broker are you using?
     
  4. 3BlackCrows

    3BlackCrows Corporal

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    Hi FXHalo,

    I wouldn't say I'm the be all and end all of Forex knowledge but I've been around long enough to have made all of the mistakes that I mentioned in my reply.

    Before I even risked a cent, I forward tested my system for 2 years.

    Forward testing is far superior to back testing.

    The difference is that when you back test you look for patterns from past data which is pretty inaccurate as everyday is different and there is no gaurantee that the past will equal the present or future.

    Forward testing is where you test your system on a demo in real time which gives you a better feel for how everything is going to work.

    Also if you are looking for the best currency to trade it would have to be the EUR/USD pair.

    People love the Cable (GBP/USD) because on average it moves twice as much as the EUR/USD which means far more profit for them however I find it quite volatile.

    It will give you a great signal only to have it reverse again and stop you out 30 mins later.

    The EUR/USD however tends to stay true to its signals and requires less pips as a stop (20 on average compared with 30 - 40 for GBP/USD).

    But enough of that.

    To answer your question, I used Oanda as a demo because the EFX demo platform is very unstable and Oandas prices and spreads are generally in line with EFX (except at U.S. news time)

    Live I trade with EFX because they don't manipulate prices like Oanda seem to.

    Just read the reviews on this site about both brokers and you will see what I mean.

    One last thing is charting - I pay for my charts. (Intellicharts)

    People rave on about Metatrader but I can't stand it and only use it for COT data.

    There are 4 reasons for this:

    1. The price shown on Metatrader is always at least 2 pips out from the price shown on EFX.

    2. Visually Metatraders candles are very scattered and gappy whereas the Intellichart candles move seamlessly from one candle to the next.

    3. The candle formation on Metatrader can be vastly different from Intellichart. A perfect hammer setup on Intellichart can look just like an ordinary candle on metatrader hence you miss the opportunity.

    An example was a short trade I did a while back which went in my favour from the weeks start to finish.

    The weekly chart on Metatrader showed the previous weeks candle (which was up) and the weekly candle where I started my trade as nothing special, however Intellichart showed that both candles formed tweezer tops (a good signal of a trend reversal) which had followed a steady up trend.

    Because of this I had a pretty good idea that the trend was going to change so I could leave the trade open. In the end the currency pair steadily fell over the next month.

    If I was using Metatrader I would be fretting about my trade reversing on me due to the insignificant signal it showed.

    4. Metatrader has no 45min timeframe which is vital to me to confirm trading decisions and track/manage my trades.

    Hope this all helps - Happy trading! :)
     
    #4 3BlackCrows, Oct 2, 2007
    Last edited: Oct 2, 2007
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  5. pfxs

    pfxs Recruit

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    i agree with 3BlackCrows,,,, min account size should be 10K. Would say more but i think 3BC already covered it pretty well!!!:)
     
  6. 3BlackCrows

    3BlackCrows Corporal

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    Hi PFXS, :)

    By all means add as much as you like.

    Like I said I'm not the be all and end all of Forex knowledge but I do know enough to get a good idea of how everything works.

    However I'm not as arrogant to say that I know everything. I think if you get to that stage you are looking for trouble.

    I learn new things everyday and you may just teach me something new with your knowledge :)
     
  7. abelbreath

    abelbreath Recruit

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    i dont know how to use this system can u plz explain it briefly so that i also can earn.
     
  8. nahiyar

    nahiyar Private, 1st Class

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    $100 to $200 is a good amount to start live trading not put much amount as a startet. You will know in few days how much you have skill to face real market. I started with $200 , loose half of my account in just 5 days then I go to demo for learning again .
     
  9. gray123

    gray123 Recruit

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    i think you are new in trade so you make a small account 100$ or200$ .when you earn profit then you are able to make large account.
     
  10. downtrend

    downtrend Sergeant

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    For starting such an amount is quite reasonable but for earning regular money its not much. For an account from which you can withdraw profit you need at least $2000.
     

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