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Manage your Money

  • #1
  • First Post: Jul 7, 2006 10:47am Jul 7, 2006 10:47am
Yip, money management is absolutely crucial. I read someone footnote: "Removing your stops is a carnal sin", something to that effect. That saved me! I opened a sell position 1.2734 on my live account yesterday (thinking it's my demo account - same indicators, timeframes etc) and this morning I discovered to my horror my I've done. I decided to let it ride and just before NFP, I decided to set a stop at 1.2811 - had I not, I would have been back at zero.

It's not my intention to trade NFP yet (first on demo a few months), so this was a lesson to be learnt. But what I've noticed (checked previous NFP releases as well) is that 5 mins before it's released, the market takes direction and continues till about 5 mins after release.

I'm enjoying trading - using 4 custom indicators and ADX on MT4. So far so good.
a journey of a thousand trades begins with a single pip
  • #2
  • Jul 7, 2006 10:57am Jul 7, 2006 10:57am
Quoting Maya
Yip, money management is absolutely crucial. I read someone footnote: "Removing your stops is a carnal sin", something to that effect.
That depends. Sometimes your stops get hunted. Richard Dennis used to use a mental stop so market makers didn't know where he was. What is truly crucial is to define the maximum acceptable risk for that trade and to follow your rules to the letter.
  • #3
  • Jul 7, 2006 11:41am Jul 7, 2006 11:41am
Quoting Far From Average
That depends. Sometimes your stops get hunted. Richard Dennis used to use a mental stop so market makers didn't know where he was. What is truly crucial is to define the maximum acceptable risk for that trade and to follow your rules to the letter.

i agree stop hunters are always out there they know that most especially newbies will have set stops...its important to understand where to put stops the term "tight stops" can be misleading and dangerous.
I tend to avoid set stops unless im away from the computer for a while, having a good idea of where the markets at one can survive using mental stops.
  • #4
  • Jul 7, 2006 1:00pm Jul 7, 2006 1:00pm
Think about placeing a limit order that is twice the amount of your current order in place of a stop....this effectivly closes and reverses your position, so if what would have been a stop gets hit your back in the market with a profit.....I hope this makes sence, I am sure there is someone here that can clairifie this furthr.
Same Whore .... Different Dress
  • #5
  • Jul 7, 2006 1:15pm Jul 7, 2006 1:15pm
I also use stops-- you know, ones they call "margin call" . It takes 2000-2500 pips for a marketmaker to get me there..
  • #6
  • Jul 7, 2006 1:16pm Jul 7, 2006 1:16pm
It's nice to see Merlin's forum still here. I used to stop by once in a while, but I've been busy working and managing my own trading forum.

I know it's a widespread belief that one needs to use the right indicators, the right stops, the right take-profit points, etc., to build a good money-making system.

After forty years (ok, more like forty months) in the desert and several times around the mountain, I was lucky enough to have my forum members tell me about purely reactive-mechanical trading methods that do not use any indicators, nor any stops (blasphemy, I know).

Probably the best approach I've seen so far is REALLY simple.
Bob/autofx
  • #7
  • Jul 7, 2006 1:21pm Jul 7, 2006 1:21pm
Autofx....

would you elaborate on your reactiv system or links to past discussions.
Same Whore .... Different Dress
  • #8
  • Jul 8, 2006 2:42am Jul 8, 2006 2:42am
Quoting johnedoe
Think about placeing a limit order that is twice the amount of your current order in place of a stop....this effectivly closes and reverses your position, so if what would have been a stop gets hit your back in the market with a profit.....I hope this makes sence, I am sure there is someone here that can clairifie this furthr.
With my luck doing this I would just get stopped twice

Dane
  • #9
  • Jul 8, 2006 2:11pm Jul 8, 2006 2:11pm
I believe u must evaluate every trade on its own merit.Looking for high or low points to place ur stop at.A few pips beyond a swing high or low is good but the mm's will hunt u down there .So u will need an emergency stop of say 40 pips depending on ur profit target but have ur real mental stop at 12 pips for example.This will save u a lot of money and u won't have shown the broker ur full intent.
  • #10
  • Jul 8, 2006 2:29pm Jul 8, 2006 2:29pm
Quoting pippy le' pur
I believe u must evaluate every trade on its own merit.Looking for high or low points to place ur stop at.A few pips beyond a swing high or low is good but the mm's will hunt u down there .So u will need an emergency stop of say 40 pips depending on ur profit target but have ur real mental stop at 12 pips for example.This will save u a lot of money and u won't have shown the broker ur full intent.

pippy le' pur, I am not criticizing your post or questioning your personal opinions but I just have to get this off of my chest:

When you are learning forex, "stop hunting" is the last thing you should be worried about. I see this stuff all over the forum and I think it actually distracts people from paying attention to what is really important in trading.

You are giving yourself a lot of credit if you think that your broker is watching every trade you make. I wouldn't worry about this until you operate on several (i.e. 50) lots per trade level and broker's liquidity is actually being tested. And at this point, you will probably have more important things to worry about than brokers conspiring against you. Most people in this forum, myself perhaps included, will never get to that level, so why add one more thing to confuse new traders?

Stop losses are scattered all over the place. Brokers don't care about watching retail traders running a $500 mini account! Let's get over it. You either play the game or complain about the rules.

My 2 pips.

Dane
  • #11
  • Jul 8, 2006 4:50pm Jul 8, 2006 4:50pm
Most of the accounts at these broker's are mini's.This is a cowboy industry and fxcm and the like should have been hung out to dry by the authorities a long time ago such as when in Nov 2004 they would not honour trades on the nfp. All the money they lost the previous month they got back in spades.If someone told me this a few years ago my wallet would be a lot fatter.Yes they don't make money on spread they all run a synthetic market which means u have to trade smart.Note I've not been successful trader in the past but now have a lot more confidence trading because I try to stay informed.Forex is not some golden path to riches as the broker' want u to believe but a constant battle between u the market and of course ur broker.
  • #12
  • Aug 29, 2007 9:24am Aug 29, 2007 9:24am
please i am a newbie.can somebody out there tell how i can calculate the stoploss and profit target to use when going for a trade.
  • #13
  • Aug 29, 2007 9:53am Aug 29, 2007 9:53am
Well i dont want to say much but dont u all think brokers want their custommers to be profitable ? ive been trading FX for 3 years and as time goes i realize how much i have to learn still, and money management has been the problem for me. I havent blown my accounts yet but im neither rich lol.. Remmember forex is a non regulated market so watch out for some brokers as the Forex industry could be in for a major structural change — soon ! link for news to get updated from http://www.cftc.gov/marketreports/financialdataforfcms/ im somewhat very carefull as my broker has doubled their margin requirements..i will probably soon start a new way to trade my positioins with multiple lots off course with money management implemented and i will start a journal when i get started.

revoke
  • #14
  • Last Post: Aug 31, 2007 8:44pm Aug 31, 2007 8:44pm
Quoting Vlad
I also use stops-- you know, ones they call "margin call" . It takes 2000-2500 pips for a marketmaker to get me there..
LOL...What if the market itself decided to get there, not the devil market makers...???


Thanks,

Nader
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