Trading with trends

hi im new been trading on a demo for about 2 months. i have been trying to trade with trends but i dont think i am using proper money management. i set my demo acount to what i would acually start with and the same leverage 100:1 on a mini account of 250. US. well anyways i was wondering if someone could help me out and get me stared with any ideas on what a ruff stop loss and lot size i should be using. thank you and i been trading on 1h checking 4h

Risk 1% of your Account on each Trade. Never simply take a fixed number for your stop. Place it behind important levels where it's hard for price to reach your stop. If it does it means you were wrong and it's good that you are out of your trade.

Measure the distance your stop would have. Calculate what 1% of your account is. Now you can easily calculate your appropiate lotsize for that trade.

ok thanks i been hearing about even numbers i was wondering is that good to to apply to my stops? or maybe a little after so if it does hit the even i would be ok

Don't know what you mean with even numbers exactely. Do you mean if your are trading long at 1.4820 would it be wise to put your Stop at 1.4800?
Yes round numbers often act as support or resistance in this case it would be better to put it 5-10 Pips below 4800 to give it room to breath.

and im using alligator indicator with rsi, are the default settings on the rsi good for use on 1h or 4h any input on this

Even (round) numbers are so obvious that they become a natural target for stop hunting by the big boys.

If you go this route keep your stops comfortably clear of them. A quick look at the pair you want to trade should give you an idea of where the bar lows/highs have travelled past the level. Keeping 20-30 pips past those highs/lows should (I repeat, should) give you some wriggle room.

Demo it all first as the initial impression you will have is that small positions can't make you very much money. If you go with the trend and hold, plus add-in additional positions once the initial trade is in profit, then you are on the way to a solid foundation in profitable trading.

yes thats what i meant with even numbers

I look at the '1% rule' differently. I am only willing to LOOSE 1% a day, which is a lot different than restricting open positions to 1% of your balance. If you don't have a stop loss on that 1% position you can loose much more than 1% during a huge swing.

For example if your balance is $1,000 and your trading on 100:1 margin...

You go long EUR/USD at 1.5000. 1% of your balance is $10 which would buy you 7 nano lots. If the price drops to 1.4850 you will have lost $10. But if it goes below 1.4850 you will loose more the $10, i.e. more than 1% of your balance.

Now, using the same numbers above you restrict your LOSS to 1% by:

Going long EUR/USD at 1.5000. You buy 20 nano lots with a stop loss of 50 PIPs. If the price drops to 1.4950 or below, you loose $10, but not more.

In the second scenario you cannot loose more than 1% of your balance in a single position, but since your exposure is 2,000 units instead of 700, you're upside potential is greatly increased.

Yes, I know the example is an oversimplification since it does not take spreads or interest into account, but given the numbers are small enough that spread and interest are negligible.

Here's how to trade with the trend:

1. Monitor a larger timeframe (use trendlines or a moving average crossover combined with support and resistance)

2. When the larger timeframe is pointed up or down, trade in that direction when you have a setup on a lower timeframe favoring that direction.

3. Don't use 100 to 1 leverage unless it fits directly into your risk management and lot sizing scheme. Use leverage which is determined by your stop loss size. Determine the lot size by dividing the amount you're willing to lose by the pip amount which would cause that loss.

Willing to lose $200 on a trade with a stop 50 pips away? $200/.0050 = $40,000. Trade .4 lots.