Is my strategy risky? | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Forex or stocks, which one is more risky 30 replies

Is trading news too risky? 17 replies

Trading News Risky? 13 replies

Unemployment Rate - Risky? 22 replies

Pyramiding: A Risky Strategy 0 replies

Is my strategy risky?

  • #1
  • First Post: Sep 30, 2010 8:27pm Sep 30, 2010 8:27pm
Going live next week and so far my strategy on my demo consists of trading 33% of my deposit and allowing the other 67% for a buffer zone from the unexpected. Is using 33% considered conservative or is it still considered quite risky? Based on what I have observed over the years on the pair that I am most aware of, I would have not gotten into trouble over several years now doing it this way and the temptation to trade more is working me over!
  • #2
  • Sep 30, 2010 8:43pm Sep 30, 2010 8:43pm
33% on one trade is ludicrous to a real trader.

edit. Actually, sounds like you are willing to lose 67% on one trade which is even more ridiculous. That doesnt sound like much of a strategy. You should go back to the drawing board. But hey, if you do go live let me be the first to thank you for your addition to the liquidity pool
  • #3
  • Sep 30, 2010 8:47pm Sep 30, 2010 8:47pm
Quoting klrman
Going live next week and so far my strategy on my demo consists of trading 33% of my deposit and allowing the other 67% for a buffer zone from the unexpected. Is using 33% considered conservative or is it still considered quite risky? Based on what I have observed over the years on the pair that I am most aware of, I would have not gotten into trouble over several years now doing it this way and the temptation to trade more is working me over!
Yes go live please do. You have cracked the code.
  • #4
  • Sep 30, 2010 8:54pm Sep 30, 2010 8:54pm
Quoting traderjai_inhi
33% on one trade is ludicrous to a real trader.

edit. Actually, sounds like you are willing to lose 67% on one trade which is even more ridiculous. That doesnt sound like much of a strategy. You should go back to the drawing board. But hey, if you do go live let me be the first to thank you for your addition to the liquidity pool
Maybe I did not explain myself so good. I'm actually using 10% of my balance but it ends up being 33% by the weekend as the broker I use has 100:1 weekdays and drops it to 30:1 on weekends to protect the accounts from spikes when the markets open again Sunday afternoon. Does that make any sense? I just look at is as 33% as I tend to hold on to my pairs sometimes and since it does drop to 30:1 weekends, this is the only real number that I follow.
  • #5
  • Sep 30, 2010 9:01pm Sep 30, 2010 9:01pm
Quoting klrman
Maybe I did not explain myself so good. I'm actually using 10% of my balance but it ends up being 33% by the weekend as the broker I use has 100:1 weekdays and drops it to 30:1 on weekends to protect the accounts from spikes when the markets open again Sunday afternoon. Does that make any sense?
Even that, you will soon find out what a bad idea it is.
  • #6
  • Sep 30, 2010 9:06pm Sep 30, 2010 9:06pm
Its crazy risky dude. Make those 3 trades count! lol

Risk 2% MAX. Slow and steady. Go for win %, then the pips will come. I'm coming from experience.
  • #7
  • Sep 30, 2010 9:11pm Sep 30, 2010 9:11pm
Quoting EmeraldEyes
Its crazy risky dude. Make those 3 trades count! lol

Risk 2% MAX. Slow and steady. Go for win %, then the pips will come. I'm coming from experience.
Then I must be misunderstanding something really bad!!! I allow for a 6 cent spike against me in my pair and the balance would still cover that.

I allow for the commission to buy and sell my position

I allow for rollover fees.

So, unless we have 2008 all over again, and I missing something here?
  • #8
  • Sep 30, 2010 9:13pm Sep 30, 2010 9:13pm
Quoting traderjai_inhi
Even that, you will soon find out what a bad idea it is.
Help LOL. So, are you saying Forex can spike much more in one day than what I am thinking and if so, is this a milisecond thing? If I got my calculations correct, I am allowing for a 6% spike of a currency, which to my knowledge I have never seen with this pair in a 24 hour cycle?
  • #9
  • Sep 30, 2010 9:43pm Sep 30, 2010 9:43pm
Quoting klrman
Help LOL. So, are you saying Forex can spike much more in one day than what I am thinking and if so, is this a milisecond thing? If I got my calculations correct, I am allowing for a 6% spike of a currency, which to my knowledge I have never seen with this pair in a 24 hour cycle?
You would be surprised. Have you even tried trading this way in a realistic demo account? Im not talking about the 50k ones either unless you plan on going live with 50k. Risking that much is insane. I dont know anything about your strategy per se but judging by the money management you have chosen to use I can almost with utmost certainty tell you that you will go bust and faster than you think.
  • #10
  • Sep 30, 2010 10:09pm Sep 30, 2010 10:09pm
I think there might be a misunderstanding here. When you say that you trade 33% of your account do you mean that you are willing to risk loosing 33% of your account? Or do you mean that your position size represents 33% of your account (ie on a $10.000 account your position would be $3300)?
Stubbornly persistent
  • #11
  • Sep 30, 2010 10:12pm Sep 30, 2010 10:12pm
And just so you know, if you need to come on a public forum, and ask if your strategy is risky, you are in no way ready to trade with real money. Not with any substantial amount of it anyway...
Stubbornly persistent
  • #12
  • Sep 30, 2010 10:16pm Sep 30, 2010 10:16pm
Quoting traderjai_inhi
You would be surprised. Have you even tried trading this way in a realistic demo account? Im not talking about the 50k ones either unless you plan on going live with 50k. Risking that much is insane. I dont know anything about your strategy per se but judging by the money management you have chosen to use I can almost with utmost certainty tell you that you will go bust and faster than you think.
Yes, I have been trading demo for nearly 3 weeks now this way and so far so good. Except at the beginning when I was learning the demo platform, no more surprises have happened. I put all my calculations in my head into formulas on my spreadsheet and so far, the numbers that I am supposed to see in the demo have corresponded to my spreadsheet so far. I take your word for it that I am obviously doing something really wrong, but I have yet to figure it out unless the worry is that I get a string of negative trades that go on longer that normal? Is this basically what everyone is worried about?
  • #13
  • Sep 30, 2010 10:19pm Sep 30, 2010 10:19pm
  •  Czech
  • | Joined Feb 2010 | Status: You Don't Know What You Don't Know | 111 Posts
Quoting klrman
Going live next week and so far my strategy on my demo consists of trading 33% of my deposit and allowing the other 67% for a buffer zone from the unexpected. Is using 33% considered conservative or is it still considered quite risky? Based on what I have observed over the years on the pair that I am most aware of, I would have not gotten into trouble over several years now doing it this way and the temptation to trade more is working me over!
I think the reason you're causing so much excitement is because you aren't measuring your risk like most do here. It seems you're basing your risk on the margin that your broker holds, which is why it changes when your maximum leverage changes. A more accurate and meaningful number is based off where your stop-loss is(read up on some "Money Management" strategies). For the 2% figure, your position would be sized so that if your stop-loss was hit then you'd lose 2% of your account balance. Forex doesn't usually spike like some are suggesting but if your stop loss is your entire balance then eventually you will get caught in a trend reversal and lose everything.


edit: Just wanted to add that ironically enough, the margin being held by your broker is the only part of your account that is NOT at risk
  • #14
  • Sep 30, 2010 10:20pm Sep 30, 2010 10:20pm
Quoting sergiu
I think there might be a misunderstanding here. When you say that you trade 33% of your account do you mean that you are willing to risk loosing 33% of your account? Or do you mean that your position size represents 33% of your account (ie on a $10.000 account your position would be $3300)?
No, I would have 10k in my account and open a 100k position. At the allowed 30:1 ratio, that would mean my margin would have to be at least $3,300 or 33%. Actually a few percent more based on the pair.
  • #15
  • Sep 30, 2010 10:25pm Sep 30, 2010 10:25pm
Quoting klrman
No, I would have 10k in my account and open a 100k position. At the allowed 30:1 ratio, that would mean my margin would have to be at least $3,300 or 33%. Actually a few percent more based on the pair.
OK, I'm lost. Whatever it is you are doing, I think that you should STOP. This business is dangerous enough, even when you know exactly what you are doing, and i am afraid you don't. I don't mean to offend you, just trying to prevent you from loosing your (probably) hard earned money...
Stubbornly persistent
  • #16
  • Sep 30, 2010 10:25pm Sep 30, 2010 10:25pm
Quoting Czech
I think the reason you're causing so much excitement is because you aren't measuring your risk like most do here. It seems you're basing your risk on the margin that your broker holds, which is why it changes when your maximum leverage changes. A more accurate and meaningful number is based off where your stop-loss is(read up on some "Money Management" strategies). For the 2% figure,...

I think your are right! I must be thinking of risk differently based on the margin as that is what is stuck in my head. So sorry about that if I caused all this confusion. I thought I was using a very conservative strategy.
  • #17
  • Sep 30, 2010 10:33pm Sep 30, 2010 10:33pm
Quoting sergiu
OK, I'm lost. Whatever it is you are doing, I think that you should STOP. This business is dangerous enough, even when you know exactly what you are doing, and i am afraid you don't. I don't mean to offend you, just trying to prevent you from loosing your (probably) hard earned money...
I corrected the typo to $3,300 not $33,000. I don't use stop losses at the moment. I use to just go to the bank and exchange currencies until they got too greedy with the spreads, so basically I am doing the same thing on Forex, except I calculate in the overheads such as commissions and rollovers. If my trend is reversed, I think I am confident enough to know when to pull out.

Well I already wired over the 10k, but I'll take your advice and do more homework. All I can do now is see the demo doing exactly what I calculate it should be doing and so far it makes sense to me. I need to learn how to express myself technically here as obviously I am doing a poor job. All my calculations on my spreadsheet look great to me though and have worked out on demo trading. I use to program computers, so even though I am logical in many ways, I go about using my own reason, which makes perfect sense to me and solves problems, but doesn't make sense to anyone else often. Always has been my weak point in life.
  • #18
  • Sep 30, 2010 10:41pm Sep 30, 2010 10:41pm
Quoting klrman
Well I already wired over the 10k, but I'll take your advice and do more homework.
3 weeks of demo is hardly anything to get excited about...

But, like I said, thank you for contributing to the liquidity pool.
  • #19
  • Edited 11:00pm Sep 30, 2010 10:48pm | Edited 11:00pm
Quoting traderjai_inhi
3 weeks of demo is hardly anything to get excited about...

But, like I said, thank you for contributing to the liquidity pool.
LOL! How about 30+ years of being really good on currency trends, does that count? I can tell you flat out that the AUS/USD is going to fall like a brick soon, but I have to keep the rest to myself! That's my thank you for many helping me understand Forex trading to the point where it makes some sense to me now. I do understand now about risk as everyone here is referring to it as. I would pull out of a losing position at around 5%, so now I get it and apologize for creating so much confusion. I'm very confident in the pairs I will be playing with so 5% if fine by me.
  • #20
  • Sep 30, 2010 10:58pm Sep 30, 2010 10:58pm
Quoting klrman
Yes, I have been trading demo for nearly 3 weeks now this way and so far so good....

theoretical results on excel are like porn for upcoming traders. They get turned on by it.
0 traders viewing now