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Starting trouble: How much deposit is good enough?

  • #1
  • First Post: Nov 6, 2008 4:52pm Nov 6, 2008 4:52pm
Hiya,

I'm soon thinking of opening my live account after months of demo'ing. I was wondering if I could get help with this.

Basically, I'm thinking of taking it slowly not to be aggressive. So what sort of deposit would be good for a beginner? I was thinking something like £500. Is that too much or too little?

Also pls can someone give a sort of formula as to how to work out what lot sizes I would need to use & the corresponding SL & TP if I'm looking at a RR of 1:2 (i.e. i'm ready to 1 to make 2). I plan to use MT4. I know different platforms refer micro/standard lot for different amounts.(for some a standard lot is 100,000 for others its 1000,000)

I'm sure this sort of info would be here somewhere so even if you send me the link to a great thread that would be benefitial.

Just short answers even with what you started with & your trade sizes would do to help.

thanks

regards,
Pret
  • #2
  • Nov 6, 2008 5:19pm Nov 6, 2008 5:19pm
Quoting Prettrad
Hiya,

I'm soon thinking of opening my live account after months of demo'ing. I was wondering if I could get help with this.

Basically, I'm thinking of taking it slowly not to be aggressive. So what sort of deposit would be good for a beginner? I was thinking something like £500. Is that too much or too little?

Also pls can someone give a sort of formula as to how to work out what lot sizes I would need to use & the corresponding SL & TP if I'm looking at a RR of 1:2 (i.e. i'm ready to 1 to make 2). I plan to use MT4. I know different platforms refer micro/standard lot for different amounts.(for some a standard lot is 100,000 for others its 1000,000)

I'm sure this sort of info would be here...
Hi,

I highly recomend to start live with the lowest limit that a broker alows, and get a broker that offers micro lots.200-500$ should be more than enough. You can always put more money in if you feel comfortable...don't rush or you'll be sorry...belive me

and good luck
  • #3
  • Nov 6, 2008 5:49pm Nov 6, 2008 5:49pm
Sounds like your in the UK. Why not check out Alpari.co.uk. They offer micro accounts with lot sizes from 0.01. Spreads are bit high but depends on what your strategy is. I trade off daily charts so suits me and they are GMT+1
  • #4
  • Nov 6, 2008 9:41pm Nov 6, 2008 9:41pm
try oanda , it has no size limit , micro is 1000 units , with oanda u can start as small as possible (even 1 unit) n then slowly increase it as u gain confident and experience , i know its not mt4 , but mt4 is only good for charting or EA, book order is easier with most java based platform ...
To Live is the rarest thing in the world , Most people exist , that is all
  • #5
  • Nov 6, 2008 11:29pm Nov 6, 2008 11:29pm
Knowing how much money to start with isn't really that big a deal. Its a simple matter of money managment and math. First ask yourself what size positions you wish to trade. Most people start with a mini lot ($1/pip) or a micro lot ($0.10/pip). If this is the case then ask yourself where you are placing your stops. You will want to size your position to 2% of your account size MAXIMUM. Thus if your stop is typically 20 pips. A single mini lot at 20 pips = $20. This is 2% of $1,000. If you wish to risk more, say 50 pips on your stop, then 1 mini lot at 50 pips is $50. 50 is 2% of $2,500.

Or if you have decided on an amount fund your account, say, $5,000, then always keep in mind 2% when determining your stop level. If you wish to enter a trade with a 20 pip stop, then you can use the 2% formula to figure out your position size as follows: 2% of 5,000 = 100. 20 pip stop / 100 = 5. You can safely size your 20 pips stop with 5 mini lots or less...but never more.

So to correctly size your position with a known account balance use this formula: # of minilots = 2% / stop loss (in pips). If you wish to know how much money to fund your account use this formula: Account balance = Largest stop (in pips) / 0.02.

Always remember NEVER risk more than 2% on each trade.
  • #6
  • Nov 7, 2008 1:51am Nov 7, 2008 1:51am
Quoting happy camper
I highly recomend to start live with the lowest limit that a broker alows
Ditto. Paper trade until you know your edge, then small contracts to get the hang of live trading. There is a tendency to want the $100000 now, but it takes time and discipline. All the best.
The trend is not your friend, it's your master.
  • #7
  • Nov 7, 2008 2:26am Nov 7, 2008 2:26am
I wouldn't use the word trouble for money either. Money is no trouble in this game (from a pure positive psychology perspective).
The trend is not your friend, it's your master.
  • #8
  • Nov 7, 2008 3:16am Nov 7, 2008 3:16am
Quoting Cultured
I wouldn't use the word trouble for money either. Money is no trouble in this game (from a pure positive psychology perspective).
True.
  • #9
  • Nov 7, 2008 4:09am Nov 7, 2008 4:09am
Quoting Prettrad
Hiya,

I'm soon thinking of opening my live account after months of demo'ing. I was wondering if I could get help with this.

Basically, I'm thinking of taking it slowly not to be aggressive. So what sort of deposit would be good for a beginner? I was thinking something like £500. Is that too much or too little?

Also pls can someone give a sort of formula as to how to work out what lot sizes I would need to use & the corresponding SL & TP if I'm looking at a RR of 1:2 (i.e. i'm ready to 1 to make 2). I plan to use MT4. I know different platforms refer micro/standard lot for different amounts.(for some a standard lot is 100,000 for others its 1000,000)

I'm sure this sort of info would be here...
If you've been demoing for months you've been wasting half your time.

You really should learn the basics of money management before you go any further. Study the answers already given, find a borker that does micro lots and apply strict MM rules to whatever method you have been demo-trading with. Once you have both of these elements ironed out then you go live, assuming you can see at least 3 months of profitable growth in your demo account.

Alpari is OK, I use them in the UK and you can fund in GBP. $250 or Sterling equivalent will get you started and you can set your lot size to 0.05p.

Check out this thread http://www.forexfactory.com/showthread.php?t=6948 and there's some bits and bobs on MM in my thread (see link below).

Just take your time but do please learn MM before you go live.
  • #10
  • Nov 7, 2008 4:10am Nov 7, 2008 4:10am
If I can add my 2 pips!

As someone said above, Money Mgmt is key.
I have been trading over 3 years, after having blown 2 accts in the first year, I have become very conservative. I also take a lot of trades during the course of a day, so I limit my risk 1.2% per trade, no matter what.
When you set your stop loss, it should not be dictated by how much you are willing to lose, it should be based on what you see on your chart.
If your chart tells you your stop should be 50 pips, then devide 1/2% of your acct. by 50...that is what your lot size should be.
You will read a lot of stories about people turning 1k into 100k in 30 days...
I suppose some people do.... I suppose some people hit the Lottery too.
Alas, I am not one of them. I have to content myself with making money slowly.
  • #11
  • Nov 7, 2008 7:08am Nov 7, 2008 7:08am
great post Mysticdiver
Senior Member
!
  • #12
  • Nov 7, 2008 7:55am Nov 7, 2008 7:55am
Give this a go I use it for my manual trading as a general guide as to where to put my TP and SL and how much to risk. etc

you can change the Lot size on Lot vs Account to what ever you like. eg from 0.1 to 1 to 0.01
also when you start please place your balance in the Trade Details sheet under Debt/Credit.
do not click the Clear Trade details button as it clears all the formulas as well. (need to fix that soon)
The system accuracy is exactly that it shows you how good your signals are so there's no fooling your self.

ME is the expected gain depending on how accurate your system is. that is why I use it for an exit.

It works with MT4 i use it with LiteFX and I don't know if it will work with other brokers.

Have a play and let me know what you think.


cheers

Kiwi
Attached File(s)
File Type: xls Bones MM DDE v10.xls   426 KB | 553 downloads
  • #13
  • Nov 7, 2008 3:26pm Nov 7, 2008 3:26pm
Quoting Mysticdiver
If I can add my 2 pips!

As someone said above, Money Mgmt is key.
I have been trading over 3 years, after having blown 2 accts in the first year, I have become very conservative. I also take a lot of trades during the course of a day, so I limit my risk 1.2% per trade, no matter what....
.
have you found that you are doing better i.e. no more closed out accounts since you started sticking to your 1.2% per trade principle?
  • #14
  • Nov 7, 2008 10:09pm Nov 7, 2008 10:09pm
some have said this already. just thot i'd so you know what is important

- money management is KEY - 2% risk max
- first live account $500 (+ or -)
- use mini or micro lots
- have a definite tried and true trading system or method
- when you lose 3 trades in a row - STOP - wait to go back live, retest your methods in demo.
- HATE losing your money more than striking it rich
  • #15
  • Nov 7, 2008 10:57pm Nov 7, 2008 10:57pm
Quoting PeterFM
If you've been demoing for months you've been wasting half your time.

You really should learn the basics of money management before you go any further. Study the answers already given, find a borker that does micro lots and apply strict MM rules to whatever method you have been demo-trading with. Once you have both of these elements ironed out then you go live, assuming you can see at least 3 months of profitable growth in your demo account.

Alpari is OK, I use them in the UK and you can fund in GBP. $250 or Sterling equivalent will get you started and you can set your lot size to 0.05p.

Check out this thread http://www.forexfactory.com/showthread.php?t=6948 and there's some...
Demoing for a long time when your method is extra-day and discretionary won't do a damn. All it will do it give you a false sense of control. When real money is one the line you'll know the difference.
  • #16
  • Nov 8, 2008 12:58am Nov 8, 2008 12:58am
Quoting Prettrad
Hiya,

I'm soon thinking of opening my live account after months of demo'ing.........can someone give a sort of formula as to how to work out what lot sizes I would need to use & the corresponding SL & TP if I'm looking at a RR of 1:2 (i.e. i'm ready to 1 to make 2

regards,
Pret
If you really need to ask those types of questions then don't waste your money in this business, I'm serious, you will lose every penny.

You're probably thinking that's kinda harsh advice but trust me, in a few months time you'll wish you'd taken it!
  • #17
  • Nov 10, 2008 7:22am Nov 10, 2008 7:22am
Quoting lostinspace
If you really need to ask those types of questions then don't waste your money in this business, I'm serious, you will lose every penny.

You're probably thinking that's kinda harsh advice but trust me, in a few months time you'll wish you'd taken it!
hi mate, i don't suppose you're suggesting in this business you can't afford to do these calculations when trading as this involves profit & loss and we're talking money

but if you're saying working out RR , money/risk mgt etc is the fundamental thing you do before you even set out.. then thats perfectly fine.

don't worry mate.. that wasn't harsh.. you're kind enough to point out the basic and i appreciate that. thx again
  • #18
  • Nov 10, 2008 7:34am Nov 10, 2008 7:34am
Quoting fxterrapin
Demoing for a long time when your method is extra-day and discretionary won't do a damn. All it will do it give you a false sense of control. When real money is one the line you'll know the difference.
But we're talking about a guy who doesn't even understand the first principles of MM.

If he goes live now he'll have no hope of surviving. If he demos a bit longer with his method and gains some idea of MM he might just make it long enough to move on a stage.

I agree there is nothing quite the same as using real money but there's no sense in him giving it all to you before he has seen what can happen if all the aspects of trading aren't under control.

I doubt he even understands even the simplest concepts of Limit, Market and Stop Orders and the inherent benefits and disadvantages of each one.
  • #19
  • Nov 10, 2008 11:10am Nov 10, 2008 11:10am
Quoting Prettrad
hi mate, i don't suppose you're suggesting in this business you can't afford to do these calculations when trading as this involves profit & loss and we're talking money

but if you're saying working out RR , money/risk mgt etc is the fundamental thing you do before you even set out.. then thats perfectly fine.

don't worry mate.. that wasn't harsh.. you're kind enough to point out the basic and i appreciate that. thx again
I guess what I'm trying to say is that it's important for you to think about and understand what it is you're attempting to do, that way there wouldn't be any need to ask questions such as what size account you should have or what your stop and limit should be.

Sure, you could ask questions and repeat the answers word for word in 'parrot fashion' but that's not really going to help you, especially when there are going to be times when you'll need to think on your feet in the heat of the moment.

So, think about what you're doing step by step, and if/when you're able to answer those questions on your own you may be some way towards opening an account.
  • #20
  • Nov 10, 2008 8:59pm Nov 10, 2008 8:59pm
Pettrad I agree with the guys around, you do not sound ready to go live asking that type of questions. I would say you still have a long way ahead, just be patient and you’ll see that when it is the time to invest your real money you won’t be asking how to do it here. Trade well, demo trade well, now that you’ve come for advise I wouldn’t like to take your money.
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