The article "Trading as a business" by Charlie Wright, the second post of the 'information for beginners' thread, is one of the best articles about trading I have ever read. Thanks for your direction diallist, James16 group instructor, and Forex Factory! What I took away from this article and a few of the other threads of 'Forex beginner Q&A' is that a trader can not control the market and no one can consistently predict the market accurately; Forecasting is a different story albeit an arduous one. The moral it seems is that the Elliot wave, Fibonacci, or three black crows of a candlestick chart are only a stones throw away from casting I-Ching Hexagrams, remote viewing, dowsing rods, tarot cards, bibliomancy or other forms of divination for the market. Perhaps that was a bit harsh, I lament as I'm keen of the golden ratio et. al.
What I did get out of the article is what SEEMs true of FX strategies: Stops, Entry, Exit and Management (risk). Boris Schlossberg, Charlie Wright and other trading strategists have a common thread of what SEEM's true. When you boil it all down, what you have control of, as a currency trader, is the Stop loss you place on a market order, the timing of when you Enter and Exit the market and at what percentage of your capital you risk (Management) in the market order (<3% per trade). That is all a FX trader really has control of. With this understanding and awareness of what we have control of versus what we have no control of (say serenity prayer here for those so inclined) we may venture into the prophetic adage: you must work with what you are given.
The menu is not the meal but models sure are fun (especially super models)! So fun in fact engineers use them all the time in their profession. Let's say the nation of Germany wants to build a new opera house. Before they build the real deal, what do they start with... a scale model. After a scale model of the auditorium is constructed, it is tested by acoustic engineers. They collect the data from the tests, debate over the frequencies being true on all scales versus the Heisenberg principle, one of them buys the other a beer and they either go back to the drawing board and re-test the model or submit their proposal to the committee for construction to commence. Don't get me wrong, I think the German's make a wonderful beer and opera is tolerable if escorted by a super model.
This same model behavior process may be charted (not to be confused with a Shewhart chart) with building a new jumbo jet aircraft, cruise ship boat or other vehicle. It's a form of risk management to save money. So what about a financial vehicle? Take a 1/10 scale model to test it out. If the little model works consistently and passes the test, go ahead and scale up to the full size.
As a newbie, I'd like to hear what the forum has to say about scale models of a one thousand dollar initial deposit. i.e..
SMALL SCALE
$1000 initial deposit for a micro account ($1000)
-$500 margin
5 mini lots
with 10:1 leverage
Points of risk?
How would one best maximize points of risk with an initial deposit of $1000? SEEMs like opening a micro for a newbie is the only way to fly. What is a formula for points of risk versus maximizing profits with this initial deposit?
Please show your math for Heisenberg's sake.
From the posts I have been reading, starting out with currency trading, the only way to go would be to start with a micro account with an inital deposit of one thousand dollars. This would be the best way to go live for the long haul. This is the 1/10 scale model to test live with. The questions I have from utilizing this small scale model then are how to gauge points of risk with a tactic of utilizing leverage to scale up to a mini lot size once the strategy is passing the test live.
The leverage is the key to moving to large scale...
what about:
LARGE SCALE
$1,000 initial deposit
- $ 500 margin requirement ($250 X 2 lots = $500)
= $500 / 2 lots = $250 or 25 points of risk
Trade $200,000 or two standard lots
with 400:1 leverage
(VERY RISKY)
What is Goldie Locks' just right scale for an initial deposit of $1000 considering those bears (bulls too)?
A nice MIDDLE SCALE with a mini lot perhaps?
Of course the conservative side of me says start off with a micro acount with minimal leverage. What tactics are best applied to the micro with minimal leverage?
Testing strategies as a beginning trader with a small scale (mini or micro accounts) SEEMs more apt to finding harmony with the currency market. Are there any popular tunes that would 'carry' these notes? Have any keys that you suggest for this melody?
Last question, how do I find a demo account that would accomidate to the scale model tactic being applied to the SEEM strategy?
What I did get out of the article is what SEEMs true of FX strategies: Stops, Entry, Exit and Management (risk). Boris Schlossberg, Charlie Wright and other trading strategists have a common thread of what SEEM's true. When you boil it all down, what you have control of, as a currency trader, is the Stop loss you place on a market order, the timing of when you Enter and Exit the market and at what percentage of your capital you risk (Management) in the market order (<3% per trade). That is all a FX trader really has control of. With this understanding and awareness of what we have control of versus what we have no control of (say serenity prayer here for those so inclined) we may venture into the prophetic adage: you must work with what you are given.
The menu is not the meal but models sure are fun (especially super models)! So fun in fact engineers use them all the time in their profession. Let's say the nation of Germany wants to build a new opera house. Before they build the real deal, what do they start with... a scale model. After a scale model of the auditorium is constructed, it is tested by acoustic engineers. They collect the data from the tests, debate over the frequencies being true on all scales versus the Heisenberg principle, one of them buys the other a beer and they either go back to the drawing board and re-test the model or submit their proposal to the committee for construction to commence. Don't get me wrong, I think the German's make a wonderful beer and opera is tolerable if escorted by a super model.
This same model behavior process may be charted (not to be confused with a Shewhart chart) with building a new jumbo jet aircraft, cruise ship boat or other vehicle. It's a form of risk management to save money. So what about a financial vehicle? Take a 1/10 scale model to test it out. If the little model works consistently and passes the test, go ahead and scale up to the full size.
As a newbie, I'd like to hear what the forum has to say about scale models of a one thousand dollar initial deposit. i.e..
SMALL SCALE
$1000 initial deposit for a micro account ($1000)
-$500 margin
5 mini lots
with 10:1 leverage
Points of risk?
How would one best maximize points of risk with an initial deposit of $1000? SEEMs like opening a micro for a newbie is the only way to fly. What is a formula for points of risk versus maximizing profits with this initial deposit?
Please show your math for Heisenberg's sake.
From the posts I have been reading, starting out with currency trading, the only way to go would be to start with a micro account with an inital deposit of one thousand dollars. This would be the best way to go live for the long haul. This is the 1/10 scale model to test live with. The questions I have from utilizing this small scale model then are how to gauge points of risk with a tactic of utilizing leverage to scale up to a mini lot size once the strategy is passing the test live.
The leverage is the key to moving to large scale...
what about:
LARGE SCALE
$1,000 initial deposit
- $ 500 margin requirement ($250 X 2 lots = $500)
= $500 / 2 lots = $250 or 25 points of risk
Trade $200,000 or two standard lots
with 400:1 leverage
(VERY RISKY)
What is Goldie Locks' just right scale for an initial deposit of $1000 considering those bears (bulls too)?
A nice MIDDLE SCALE with a mini lot perhaps?
Of course the conservative side of me says start off with a micro acount with minimal leverage. What tactics are best applied to the micro with minimal leverage?
Testing strategies as a beginning trader with a small scale (mini or micro accounts) SEEMs more apt to finding harmony with the currency market. Are there any popular tunes that would 'carry' these notes? Have any keys that you suggest for this melody?
Last question, how do I find a demo account that would accomidate to the scale model tactic being applied to the SEEM strategy?
