One of the first trading rules we get when we start learning Forex trading is to never risk more than 1% of your account /trade .
Maybe that could be true if a trader is using a million dollar capital ,or even a 100k capital ,but as 90% of traders have thousands or ten of thousands capital,i think this rule could be wrong in this case.
We spend years to develop a profitable strategy or a trading style ,and after we get them ,unfortunately many of us can't trade them profitably due to psychological emotional restrictions,basically Greed,and traders open an account trying to trade their system ,respecting the rules,so at the start they don't trade more than 1% ,but they can't control themselves ,end up over trading and risking 20% of their account/trade ,and the end result is blowing the account.
My guess is that a good profitable trader risking 1 % /trade will make on average of 5-20% per month ,let's say 10% monthly profit ,his capital 5000$ ,so that means his profit 500$ per month ,which is not enough to feed 90 % of people 's greed ,so they tend to overtrade ,and that may be the cause of trading failure of 90% of traders .
So in the last months i was thinking why shouldn't people trade 5% /trade as a standard rule ,so the same trader with 5000$ ,10 % monthly profit ,would be making 2500$/month ,which i think would be very acceptable for most traders as a start.
So maybe making the 5% risk/ trade as part of our trading plan may lead to end our emotional struggle and help us respect our trading plan and money management .
Although i promised myself not to deposit any more money for Forex until 2017, but because i think this idea could help me to be profitable and control my emotional trading problem ,where i'm controlled by my greed ,i decided to put my money where my mouth is ,and i'll try this idea on a new account with a very tiny small capital 300$ and see if this change could make me finally profitable.
I would be trading 7% (5% basic ,and will add 2% after price retrace )of my capital /trade and i'll open only 1 trade and use only 1 currency pair.
My questions :
Did anybody tried to use this idea before and was it successful ?if not what went wrong?If yes could you link your account to a FF TE to give us hope and encourage us to use this high risk rule?
Also i read everywhere that if you lose 30% of your account ,it would be very difficult to recover the account after this drawdown?why?
My calculation are based on the possibility of having 8 consecutive losing trades ,which 7x8 =56% loss ,so if my leverage is 1-200 ,i think i still can recover my losses easily if i have an average of 1 to 3 risk/reward ratio,right?
I would try to connect my account to FF TE and myfxbook link soon ,so that 'll help to show in the next months if the Idea is right or wrong ,and if right,maybe it could help many traders like me with money management and emotional problems to improve themselves .
Myfxbook link:
http://www.myfxbook.com/members/sam1...llenge/1581023
17/4/2016 Trade entry would be divided in multiple small positions ,so we try to have position sizes as big as possible with smaller SL,in total all trades would bee risking 7% /trade.
Maybe that could be true if a trader is using a million dollar capital ,or even a 100k capital ,but as 90% of traders have thousands or ten of thousands capital,i think this rule could be wrong in this case.
We spend years to develop a profitable strategy or a trading style ,and after we get them ,unfortunately many of us can't trade them profitably due to psychological emotional restrictions,basically Greed,and traders open an account trying to trade their system ,respecting the rules,so at the start they don't trade more than 1% ,but they can't control themselves ,end up over trading and risking 20% of their account/trade ,and the end result is blowing the account.
My guess is that a good profitable trader risking 1 % /trade will make on average of 5-20% per month ,let's say 10% monthly profit ,his capital 5000$ ,so that means his profit 500$ per month ,which is not enough to feed 90 % of people 's greed ,so they tend to overtrade ,and that may be the cause of trading failure of 90% of traders .
So in the last months i was thinking why shouldn't people trade 5% /trade as a standard rule ,so the same trader with 5000$ ,10 % monthly profit ,would be making 2500$/month ,which i think would be very acceptable for most traders as a start.
So maybe making the 5% risk/ trade as part of our trading plan may lead to end our emotional struggle and help us respect our trading plan and money management .
Although i promised myself not to deposit any more money for Forex until 2017, but because i think this idea could help me to be profitable and control my emotional trading problem ,where i'm controlled by my greed ,i decided to put my money where my mouth is ,and i'll try this idea on a new account with a very tiny small capital 300$ and see if this change could make me finally profitable.
I would be trading 7% (5% basic ,and will add 2% after price retrace )of my capital /trade and i'll open only 1 trade and use only 1 currency pair.
My questions :
Did anybody tried to use this idea before and was it successful ?if not what went wrong?If yes could you link your account to a FF TE to give us hope and encourage us to use this high risk rule?
Also i read everywhere that if you lose 30% of your account ,it would be very difficult to recover the account after this drawdown?why?
My calculation are based on the possibility of having 8 consecutive losing trades ,which 7x8 =56% loss ,so if my leverage is 1-200 ,i think i still can recover my losses easily if i have an average of 1 to 3 risk/reward ratio,right?
I would try to connect my account to FF TE and myfxbook link soon ,so that 'll help to show in the next months if the Idea is right or wrong ,and if right,maybe it could help many traders like me with money management and emotional problems to improve themselves .
Myfxbook link:
http://www.myfxbook.com/members/sam1...llenge/1581023
17/4/2016 Trade entry would be divided in multiple small positions ,so we try to have position sizes as big as possible with smaller SL,in total all trades would bee risking 7% /trade.
