The Catch 22 of Trading | Forex Factory

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The Catch 22 of Trading

  • #1
  • First Post: Dec 23, 2011 5:21pm Dec 23, 2011 5:21pm
You want to trade full time, however you are undercaptalized so need to grow the account to make earning a few % a month worth something. To grow an account you need to trade intra day otherwise it will take decades to build an account. But you cant day trade because you need to work.

In my opinion having a decent capital to start trading is key. There is no way around this.
Economists have forecast 9 out of the last 5 recessions
  • #2
  • Dec 23, 2011 5:39pm Dec 23, 2011 5:39pm
Tell me about it. With a low barrier to entry, forex tends to attract a lot of people who want to start small and get big, but I think it's like anything else and you have to put in the work to realize the reward.
  • #3
  • Dec 23, 2011 7:06pm Dec 23, 2011 7:06pm
I'll offer a possible solution to this dilemma for consideration.....

Assuming $1000 / week as a basic wage, and trading 1 standard lot at $10 per pip, then to achieve that wage needs only 100 pips per week, or 20 pips per day.

20 pips total per day for a scalper is not impossibly hard.

To fund this trading at 100:1 calls for about a $2000 account. ($1000 for the margin - one trade of 1 lot at a time - and $1000 to cover losing trades).

The arithmetic is simple - the psychology is not!


Peter
Holy Grail part 1. - Cut loses short.
  • #4
  • Dec 23, 2011 7:13pm Dec 23, 2011 7:13pm
sure makes sense, i can mathematically make about 10$/pip (160 average range)
$1,600 a day.

the math makes sense, now it's hard enough for ANY professional get the direction right. lol

we are not taking into account draw down, SL being hit etc. possible margin call.
AVT INVENIAM VIAM AVT FACIAM
  • #5
  • Dec 23, 2011 7:39pm Dec 23, 2011 7:39pm
I don't completely agree with this. You can trade part time and still make a healthy profit monthly trading intraday. I traded only the Asian session and was able to avg above 20% monthly on a small account not trading in an over leveraged state. I only risked no more than 3% per trade.

Even full time traders don't trade 24hrs/day and yet make a nice living. The key is to make a few sacrifices to either trade a portion of the most active sessions or be patient during sessions like the Asian session. But most of all be disciplined in you approach and treat it like a business.
Nothing is impossible, with a willing mind!
  • #6
  • Dec 24, 2011 2:13am Dec 24, 2011 2:13am
Why can't you just trade daily time frames? You only need to check your trades once a day? Less stress, less hassle
  • #7
  • Dec 24, 2011 2:38am Dec 24, 2011 2:38am
Catch 22: Who escaped death and keeps on flying/trading/is idiot. Who
is idiot and asks for retirement from flying/trading/ is not a complete idiot
and is not set free from flying/trading/ according to the catch 22

that is the key:trade and watch movi
  • #8
  • Dec 24, 2011 3:00am Dec 24, 2011 3:00am
Quoting mystic
I'll offer a possible solution to this dilemma for consideration.....

Assuming $1000 / week as a basic wage, and trading 1 standard lot at $10 per pip, then to achieve that wage needs only 100 pips per week, or 20 pips per day.

20 pips total per day for a scalper is not impossibly hard.

To fund this trading at 100:1 calls for about a $2000 account. ($1000 for the margin - one trade of 1 lot at a time - and $1000 to cover losing trades).

The arithmetic is simple - the psychology is not!


Peter
Here you go, this is the thread to prove your point

http://www.forexfactory.com/showthre...47#post5061547

and this may help you too

http://www.earnforex.com/position-size-calculator

please report back at end of January

Attached Image (click to enlarge)
Click to Enlarge Name: pos_size.png Size: 68 KB
It takes a lot for me to IGNORE you, but you can try.
  • #9
  • Dec 24, 2011 3:45am Dec 24, 2011 3:45am
For me... discipline is more important than methods of finding the trend or exit/entry strategy. Even if someone gave us an A+ trading method, and we have a decent capital to trade. It won't work until we know what type of trader are we... Well that is just my opinion...

And hopefully this "Emotional Free Forex Trading – How to Improve Yourself" will help also...

Happy Holiday Guys...
  • #10
  • Dec 24, 2011 4:56am Dec 24, 2011 4:56am
Quoting Trader_V
I don't completely agree with this. You can trade part time and still make a healthy profit monthly trading intraday. I traded only the Asian session and was able to avg above 20% monthly on a small account not trading in an over leveraged state. I only risked no more than 3% per trade.

Even full time traders don't trade 24hrs/day and yet make a nice living. The key is to make a few sacrifices to either trade a portion of the most active sessions or be patient during sessions like the Asian session. But most of all be disciplined in you...
This depends on the timezone you live in, I am in the UK and when I get home from work it's the tail end of the us session, the Asian session does not get going until 2am UK time. So the period I can trade from 7pm to midnight uk time (2pm to 7pm ny time) the market is dead.
Economists have forecast 9 out of the last 5 recessions
  • #11
  • Dec 24, 2011 5:00am Dec 24, 2011 5:00am
Quoting willf
Why can't you just trade daily time frames? You only need to check your trades once a day? Less stress, less hassle
If you want to build an account, compounding frequency is key. (assuming a positive expectancy)
Economists have forecast 9 out of the last 5 recessions
  • #12
  • Dec 24, 2011 9:39am Dec 24, 2011 9:39am
The market exists to discipline those who like lots of leverage. Also, forget about the whole compounding thing...for now. Keep your positions equal for periods determined by you. Don't step up your leverage/ trade size every time you make 10 pips. Stair step your position sizes as you reach certain levels of net asset value.
  • #13
  • Dec 24, 2011 11:38am Dec 24, 2011 11:38am
Quoting Scotty B
The market exists to discipline those who like lots of leverage. Also, forget about the whole compounding thing...for now. Keep your positions equal for periods determined by you. Don't step up your leverage/ trade size every time you make 10 pips. Stair step your position sizes as you reach certain levels of net asset value.
Yeah that's another approach to position sizing, one which I use.
Economists have forecast 9 out of the last 5 recessions
  • #14
  • Dec 24, 2011 7:39pm Dec 24, 2011 7:39pm
If you trade full lot on 1K account you will blow your account in short order unless you are truly spectacular trader. Don't be fooled.

One loss of 10 pips will result in 10% account depletion. C'mon!!!

There is no get-rich in FOREX.

If you have 1K trade no more that 1% or 0.01 lot per trade. Yes it will be slow at first but if your method is worthy then over the long haul you will increase your account.

Also don't forget you can add to your account with funds from your day job.

Trade like it is a business. Manage losses, not gains. If you do so the gains will take care of themselves.
  • #15
  • Dec 24, 2011 7:41pm Dec 24, 2011 7:41pm
Quoting mystic
I'll offer a possible solution to this dilemma for consideration.....

Assuming $1000 / week as a basic wage, and trading 1 standard lot at $10 per pip, then to achieve that wage needs only 100 pips per week, or 20 pips per day.

20 pips total per day for a scalper is not impossibly hard.

To fund this trading at 100:1 calls for about a $2000 account. ($1000 for the margin - one trade of 1 lot at a time - and $1000 to cover losing trades).

The arithmetic is simple - the psychology is not!

Peter
Follow this advice and you are on your way to blowing your account.
  • #16
  • Dec 25, 2011 3:22am Dec 25, 2011 3:22am
Quoting Winston Reed
If you trade full lot on 1K account you will blow your account in short order unless you are truly spectacular trader. Don't be fooled.

One loss of 10 pips will result in 10% account depletion. C'mon!!!

There is no get-rich in FOREX.

If you have 1K trade no more that 1% or 0.01 lot per trade. Yes it will be slow at first but if your method is worthy then over the long haul you will increase your account.

Also don't forget you can add to your account with funds from your day job.

Trade like it is a business. Manage losses,...
Yeah, he is gambling not trading. Your system or method needs a number of trades to play out its expectancy, if you cannot sustain a run of loss then you will blow up.
Economists have forecast 9 out of the last 5 recessions
  • #17
  • Dec 25, 2011 4:15am Dec 25, 2011 4:15am
Tell me, what's the difference between sweating in front of the screen trading full time, trying to "trade your capital up" and any other full time occupation?

There's no freedom in it, if you just have to do it anyway, is there?

Yes, that's life, you need a decent amount of capital to start with ANYTHING, except maybe drug dealing or prostitution. You know, dealers keep dealin', ho's keep ho'ing ... LOL

Quoting markmm
You want to trade full time, however you are undercaptalized so need to grow the account to make earning a few % a month worth something. To grow an account you need to trade intra day otherwise it will take decades to build an account. But you cant day trade because you need to work.

In my opinion having a decent capital to start trading is key. There is no way around this.
forget about tomorrow, just steal away into the night
  • #18
  • Dec 26, 2011 1:50pm Dec 26, 2011 1:50pm
I have the solution to part of the problem. I am a security guard so I have a lot of time at work. I still haven't got the trading down but at least i have no issues of time.
  • #19
  • Dec 26, 2011 3:55pm Dec 26, 2011 3:55pm
I'd say get a 2nd job instead of trading off your first one. Make and keep as much money as possible is key.
  • #20
  • Last Post: Jan 21, 2012 5:00am Jan 21, 2012 5:00am
Quoting markmm
You want to trade full time, however you are undercaptalized so need to grow the account to make earning a few % a month worth something. To grow an account you need to trade intra day otherwise it will take decades to build an account. But you cant day trade because you need to work.

In my opinion having a decent capital to start trading is key. There is no way around this.
I absolutely agree. The only way to build up a small account is to increase your trading frequency, so you need to trade intra day. Let me say it again:

You are not going from $300 to $(whatever) unless you day trade!. If you don't have the time to day trade then forget about it.
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