Thread: trading systems vs account size

Originally Posted by ;

I'm gonna state nah, one thing all INDICATOR based systems have in common is that no one work in all market conditions.

Price will be price in all market conditions. No setup - no trade

As easy as that.

Fair comment

[quote=iandekoker;1524130]

Originally Posted by ;

A 5000 bank is perfectly acceptable for an experienced scalper using one minute candles and 10 pip stops through sessional openings.

Ignorance is the greatest barrier facing any trader.
The smallest advantage can be turned into a healthful living with appropriate trade direction and position-sizing.


Oh my friend I have this feeling you'll lose more than 1 account at the future. Warren Buffet does not utilize candles to scalp. That is a guarentee you will loose you account. But like you say ignorance is the best barrier

Warren Buffet does not utilize 1 minute candles but tens of thousands of other successful traders do. They do not require banks however they do require expertise and savy.
BTW one second candles and retail currency markets were not accessible when warren started out.
Maintain the sweeping generalizations coming. They make for information but humorous reading.

I am going to have to somewhat disagree with you. It can be carried out with money management, the right mindset, consistency, and of course the power of compounding.

With a $10,000 account:

Starting lot size.3:

Having a starting capital of $10,000.00, a weekly rate of yield of 2.5%, and a winning expectancy of 65 percent, over a period of 208 weeks:

The payoff:risk ratio is going to be 1.54:1, and also the weekly (net total) goal is going to be 83 pips

After two years the capital will be $130,000,
After three years the capital will be $470,000
And after four decades 1.7 million.

Of course that doesn't take into account taxes, however when all winnings were left in the account (or a small monthly withdrawal following two decades ) those are the outcomes.

I believe it is possible, however I also agree with you that 95 percent of people won't stick around for 4 years due to these small returns for the initial couple of decades, lack of consistency, simply giving up, or a blend of all the aforementioned.

I believe being able to consistently return 2.5% per week might difficult for a lot of people too. Different indiors that they soon find out does not work too 25, Just like you mentioned someone is going to have system for 5 months with 8. I am more of a lover of pure price action and patterns, support and resistance, etc, all on higher timeframes, which I have discovered a lot better than the systems you have described.

And, like someone else stated, it can depend a lot on your lifestyle. If you're able to stick it out and live off $300 - 500 a week for your first few years (A lot of you are married with families, simply impossible ), You are able to leave all the cash in your trading account. I can live well and pay all of my bills and put in an additional $1,500 in my account not a ton but I am just 21.

Originally Posted by ;

My buddy I love to burst to bubble, but you'll never make a living from forex trading a mini account. In time you will concur with me.

You appear to think you can earn a living with 30-50k, but not with a mini account? You realize, of course, which you can trade more than 1 pair and over 1 lot at a time. Mini accounts provide you a great deal more flexibility. You are able to trade 20 or 10 or even 30 lots on a miniature. No? If you are trading pairs and utilizing MM egies--scaling and out of transactions with TPs and numerous entrances --a mini account is a fantastic way.

Can not make a living using a mini account? Talk to my buddy Gwan (on this forum) out of Indonesia and ask how much you need to live there. Or in different areas of earth. Of course as a currency trader you already know that a dollar's buying power depends on where you live. And that this forum is represented by men and women from throughout the world.

My purpose? Most of us have our personal preferences, goals, approaches, scenarios, etc. and can't be painted with the same brush.

Originally Posted by ;

I often read the trading system section to see with what weird and fantastic trading systems folks have develop. It is entertainment for me. Especially if I see such screens and indiors from god knows. I have discovered the following trend occuring in almost all of the trading systems published on this forum.

John Doe starts off by saying that he has developed a profitable trading system based on XYZ doing ABC.

After about 2-3 months and also a lot of questions from a couple of acquaintances that decided to follow John Doe's trading system he then modifies his trading system or as he puts it enhance it for better entrance positions or more pips. So you begin to obtain a John Doe variant 1....and after a variant 2. . .and after a variant 3....and afterwards on everyone is perplexed.... Such as John Doe himself.

After about 3-6 weeks you will find John Doe drifting the pages of Pete's new trading system. And after a while Pete's new system goes beyond the exact same phases as John Doe's system. And following 3-6 months you will find Pete drifting the pages of Jimmy's new trading system. Therefore the story continues....

So what's the lesson to be learned here? A trading system is a trading system. They are all exactly the same. The problem isn't the trading system. The problem is the magnitude of your forex account. It's the size of your forex account which is your BIGGEST OBSTACLE in you way

when you have a $1 - $10 000 forex trading account you ONLY do forex for the fun of it and also as a pastime. But you will NEVER make a living out of forex. Cause if you exchange regular lots ($10 per pip) then you've only 1000 pips to manouvre with. And believe you me the JPY will take outside you in a couple of days time. Should you exchange miniature lots ($1 per pip or smaller) then it will take you ages to make enough money to live off

Only in the event that you have a $30 000 - $50 000 and forex account are you going to stand a chance of earning a living out of forex. But you'll need to select your trades.

Only when you have a $100 000 - $1 000 000 forex account are you going to be one of those 5% which creates a currency trading forex in the event that you only trade regular lot ($10 per pip). Cause then ONLY will you weather the storm of the market turning while still having sufficient funds to continue trading.

Recall....there is why forex brokers offer you the oppertunity to open a mini account of $250 -$10 000 to exchange an unpredictable market. Cause they know the odds are greatly against you. Nowhere else will you find a way of turning $250 into millions. Forex is no exception. There are no short cuts . It's like taking on the Indian Ocean in a little row boat. You stand no chance. First find yourself a big boat that can weather the storms of the sea if you wan na venture out to sea.

Nicely thought out, even though it appears you stepped on the feet of the micro, demonstration and miniature crowd....and dare I say, the undercapitalized.

While some at Idonesia can reside off a well financed and managed mini account, I am hard pressed to think that traders in the US, UK, EU, NZ, AUS, JPY and a couple of others would be in a position to ONLY exchange for a living using less than 5000K usd... $25k is the bare minimum to begin to develop an account to think about withdrawing ( net income ), albeit small, people that have F/T employment, requiring perks. . .health, dental, and the such....are in essence supplamenting ( spell check here ) incomes. Those using micros and demo accounts are learning ( though I am not a fan of demo accounts ) Demos aren't REAL market conditions. Yes we need to begin somewhere.

Just wanted to state I could follow your train of thought. . .Trading is a company and CAPITAL is KING....CAPITAL can weather many errors along the way better than any system ever will. As in Business, Manging Money is significant. And, trading losses aren't LOSSES, they are the cost of doing business....similar into a shipping truck breaking down/ blowing a motor enroute to a client....Shit Happens....get it fixed and proceed.

I will say this with extreme experience and conviction....it is easier to exchange 1mil ( 10 lots ) for 10-15 pips, ( $82usd to $100 usd / pip ) compared to exchange minis at $1-$5 lot wanting to create 200-300 pips. At the exact same week.

Anybody caring to see this, ask yourself, is it possible to create 10-15 pips per week?? Capital is your response....along with knowing what the hell you're doing....hope that went without saying in this stage.

Today for those trading a miniature, with some nice funds in reserve....learn well, and put that capital to work for you. Keep saving and cutting down expenses, Hell receive a financial loan. . .Loans are a part of business also....BTW, who the Hell wants retirement from the Gov't.. . .we can all transaction til we die....for the most part. And in those countries that offer these perks, they are not economical....you all got some hellish taxes!! Even though it must make trading a bit easier to go it alone....here in the States...that I have to buy my Insurance. ( always open to learning and corrections )


Enough rambling....others write thoughts better than I

Good Luck all

Originally Posted by ;

While some at Idonesia can reside off a well funded and managed mini account, I'm hard pressed to believe that traders in the united states, UK, EU, NZ, AUS, JPY and a few other people would be in a position to ONLY trade for a living with less than 5000K usd... $25k is the bare minimum to begin to develop an account to think about withdrawing ( net income ), albeit small, those with F/T employment, needing perks. . .health, dental, and the such....are in nature supplamenting ( spell check here ) incomes. Those using micros and demo accounts are learning ( although I'm not a fan of demo accounts ) Demos are not REAL market conditions. Yes we need to begin somewhere.



Good Luck all of

FX, you make good points. Capital IS King. The more capital you have, the less every month you need to strive for those high percentages.

My point is this:

In case you may be able to make a living from 30-50k as iandekoker acknowledges (I agree it's unlikely in the U.S.), then why can't it be done in a mini account with the identical capital? Is not a 10 lot mini position the same as a single standard lot? I'm not talking about making a living from a account or possibly a 30 k account. I'm saying you can find the same effects, if not better from a mini account than a account if they're funded. The mini has additional flexibility.
Say you have a 30k regular account and you're all set to take a trade. You figure that your risk to reward as well as your leverage and your MM rules permit you to trade 2.4 regular lots. However, your standard account permits you to trade both lots or 3 and nothing in between. . Two lots doesn't use the capital and your MM rules will be overextended by three.
Now, the exact same situation with 30k at a mini account. You can buy 20 lots (2 regular ) or even 30 lots (3 normal ) or 24 lots which will be using all the capital your MM permits without overextending.
All that being said, here in the U.S. I wouldn't consider buying living with 30-50k. At least not if it was my funding. I'm sure there are some people who do and will and I'm not doubting them a little. However, it would be far out of my comfort zone.

I laugh at all the You are undercapitalized articles. It's utter and complete bullshit. I am not saying you are going to earn a living off a $300 account, but given time and discipline, you can grow it into something.

Utilizing suitable money management you should never break that account.

Anyone studying forex must Demo for some time till they get the fundamentals. After that open a bare minimum account and utilize correct money management. You might think that's chump change, but when you lose $30 of the $300 you will feel it. It will make you a better trader. Not only that, its a lesson. You don't need a $30,000 lesson in forex to succeed.

Originally Posted by ;

FX, you make great points. Capital IS King. The more funds you have, the less every month you have to try for those high percentages.

My point is that:

In case you may have the ability to make a living from 30-50k because iandekoker admits (I agree it is improbable from the U.S.), then why can't it be done in a mini account with the identical capital? Is not a 10 lot mini position the same as a single lot? I am not talking about making a living from a account or even a 30 k account. I am saying you can find exactly the same effects, if not better in the mini account than the usual account if they're funded equally. The mini has additional flexibility.
Say you have a 30k regular account and you are all set to take a trade. You figure that your risk to reward as well as your leverage along with your MM rules enable you to trade 2.4 regular lots. But your typical account only permits you to trade both lots or three and nothing in between. . Two lots doesn't use of the capital you're allowed and your MM rules will be overextended by three.
Now, the exact same situation with 30k in a mini account. You can buy 20 lots (2 standard) or even 30 lots (3 normal ) or 24 lots which will be using all of the funds your MM permits without overextending.
All that said, here from the U.S. I wouldn't consider trading for a living with 30-50k. At least not if it was my capital. I am sure there are a few folks who can and do and I am not doubting them just a bit. But it would be far out of my comfort zone.

No doubt, I agree with you on using mini's in this fashion you describe.

Though to receive the best spreads and lowest commissions....example Dukascopy....250k is tiniest lot along with also the spreads are LOW, what is commission now...$20/mil or $25/mil
Now I must admit, I do like Oanda....very great for a mini trader with Capital....plus they cover that commish from the next....it is a wonderful bonus when a Extended 10 lot transaction on any yen cross requires a while to move to TP.

To all those traders who believe they can still make lots of money trading mini accounts.

Imagine YOU are the Foreign Exchange broker and you set up your own Foreign Exchange enterprise. You allow me and some other traders to start a mini Foreign Exchange account ($250-$5000) with you.

If we perform clever we can make lots of money off you. Our investment can be turned by us into returns.

Why in the world would you as Foreign Exchange broker permit it to occur? Cause it's bad business sense to permit someone to only spend $250-$5000 together with you, BUT from you????, he can make even millions, tens of thousands, ten thousands, hundred thousands Your Foreign Exchange business would go bankrupt in less than a month's time. Cause you only get little change (first investment and disperse ) in from investors but you have to pay out big amounts of cash to them. You as the Foreign Exchange broker now carries the risk. And as you know any company can carry detected risk only. Uncovered risk is what makes companies to bankrupt.

Brokers only permit you to open mini accounts with them cause that's a no risk guarenteed income for them. 95% of mini accounts get blown. That makes good business sense to allow someone to investment a small amount of money in your Foreign Exchange business if the odds are heavily in your favor and heavily against them. Is trick them into thinking they can take $250-and turn it.

Ps....if that you still believe you can beat Foreign Exchange with only a mini account I suggest you draw your money ASAP from your Foreign Exchange broker cause there's NO WAY your Foreign Exchange broker can manage this discovered risk by paying countless dollars to clients if they all only invest in little $250-$5000 mini accounts. Somewhere along the line your broker is gonna run into cashflow problems or the risk will kill them. But many reliable Foreign Exchange brokers go bankrupt every week? Hmmmm makes u believe does not it...

Originally Posted by ;

I laugh at each of the You're undercapitalized articles. It's complete and utter bullshit. I am not saying you're likely to earn a living off a $300 account, but given time and subject, you can develop it.

Utilizing proper money management you also should never break that account.

Anyone learning Foreign Exchange must Demo for a while till they get the basics. After that open a minimum account and use money management that is correct. You might think that's chump change, but when you lose $30 of the $300. It will make you a trader. Not only that, its a lesson. You don't need a $30,000 lesson in Foreign Exchange to succeed.

The topic has been MAKING A LIVING. . .not growing a 300 account....Gp out and start your own Biz for $300 and see how much you go....as the poster stated....that is a hobby....not trading for a living....BIG DIFFERENCE