Thread: trading systems vs account size

I read the trading system segment what trading systems and weird individuals have develop to see. The majority of the time it is entertainment for me. If I see indiors and such displays from god knows. I have found the trend occuring in virtually each the trading systems posted on this forum.

John Doe starts off by stating that he's developed a profitable trading system based on XYZ doing ABC.

After about 2-3 months and also a lot of queries from a few disciples that chose to follow John Doe's trading system he then modifies his trading system or as he puts it improve it for better entrance positions and/or more pips. So you start to get a John Doe variant 1....and later a variant two. . .and later a variant 3....and afterwards on everybody is confused.... Such as John Doe himself.

After about 3-6 weeks you will find John Doe roaming the pages of Pete's new trading system. And after some time Pete's new system goes beyond the same stages as the system of John Doe. And after 3-6 months you will find Pete roaming the pages of Jimmy's new trading system. And thus the story continues....

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

if you've got a $1 - $10 000 FX trading account that you ONLY conduct FX for the pleasure of it and also as a hobby. However, you will NEVER make a living out of FX. 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 out you in a couple of days time. Should you exchange miniature lots ($1 per pip or smaller) then it will take you ages to earn enough cash to live off

Only if you've got a $30 000 - $50 000 and FX account are you going to stand a chance of making a living out of FX. However, you'll need to select your trades.

Only in case you've got a $100 000 - $1 000 000 FX account are you going to be one of those 5% which creates a currency trading FX in the event that you only trade regular lot ($10 per pip). Cause ONLY can you weather the storm of the market turning against you while still having enough funds to continue trading.

Recall....there is a reason why FX brokers give you the oppertunity to open a mini account of $250 -$10 000 to exchange an unpredictable market. Cause they know the odds are heavily against you. Nowhere else can you find a method of turning $250. Forex is no exception. There are no short cuts . It is like taking on the Indian Ocean in a little row boat. You stand no chance. If you want venture out to sea first find yourself a big ship that can weather the storms of the sea.

Originally Posted by ;

After about 3-6 weeks you will find John Doe roaming the pages of Pete's new trading platform. And after some time Pete's new system goes thru the exact same stages as the system of John Doe. And following 3-6 months you will find Pete roaming the pages of Jimmy's new trading platform. And so the story continues....

But why pick on me

Originally Posted by ;

But why pick on me

lol. . .sorry pete didnt mean to select on u....

Originally Posted by ;

in case you have a 1 - $10 000 Currency Market trading account you ONLY conduct Currency Market for the pleasure of it and as a pastime. But you'll never make a living out of Currency Market. Cause if you exchange regular lots ($10 per pip) then you have just 1000 pips to manouvre with. And believe you me that the JPY will take you out . Should you exchange mini lots ($1 per pip or smaller) then it will take you ages to earn enough money to live off

Only in case you have a $30 000 - $50 000 and Currency Market account will you stand a chance of making a living out of Currency Market. But you will need to select your trades carefully.

Only in case you have a 100 000 - $1 000 000 Currency Market account will you be one of those 5% that creates a currency trading Currency Market in the event that you simply trade regular lot ($10 per pip). Cause ONLY will you weather the storm of this market turning against you while still having enough funds to keep trading.

Remember....there is a reason why Currency Market brokers offer you the oppertunity to open a mini account of $250 -$10 000 to exchange an unpredictable market. They know the odds are against you. Nowhere else will you find a method of turning $250. Forex is no exception. There aren't any short cuts in life. It is like taking on the Indian Ocean in a small row boat. You stand no chance. If you want venture out to sea wind up a big enough boat that could weather the storms of the sea.

Iandekoker, I just have a small account. I just have a account since I'm still studying. I seriously hope that you're not advoing that novices open $30,000.00 accounts with no experience? As for you comments on lot size, I exchange with Oanda, which let me open positions of almost any dimension (ie there is not normal lot size). This has allowed me to exchange with money management in place.

I look at it this way. For the small time that I have been tradeing (mini account ) Provided that your not greedy and your not trying to compete with the big majors banks a person can do fine doing Currency Market. I really do 25 to 35 pips a day and a number of times its just 15 pips. Depending if I am doing 2 or 3 lots. I relize that is nothing compare you to all. But from it one can make a liveing in time. You simply need to build it up slowly. Forex is only one thing out there to invest in. But if you are trying to make a liveing. Just look at what your needs are to live on and try to build up on that. If it's possible to get by on lets say $700.00 per week. Construct your strategy on this then. With about 25 percent more to put off at a account each week or back into your Currency Market account to work with. Everything depends on your life style thats all.

Thank you For Your Time

Larry Liles

Originally Posted by ;

A trading platform is a trading platform. They are all the same. The problem is not the trading platform. The problem is that the size of your forex account. It's the size of your forex account that is the BIGGEST OBSTACLE in you way
.

It's sweeping generalizations such as this on public forums that put me down many a wrong path and cost me many a pretty penny.
Without context, this type of information is dangerous crap.
All systems aren't similar. In fact is that none work in most market conditions.
Under-capitalization is contextual. The harm that's frequently credited to under-capitalization is created by A lack of comprehension of accountable and position-sizing money-management.
A 5000 bank is totally adequate for an experienced scalper using one minute candles and 10 pip stops through sessional openings.
$30,000-$50,000 banks have been needed for professionals trading daily candles employing the exact same position-size with much larger stops.
Ignorance is the greatest obstacle facing any trader.
The tiniest edge can be turned into a healthy living with appropriate trade direction and position-sizing.
The very best edge called man will ship you broke fast without these things.

Originally Posted by ;

But why pick on me

Don't feel all alone Peter....He began this picking on me .
The hell of it is it hit way too close to home....
I think most go through this in the begining, fortunatly that has been a couple years ago now.

The Issue is That the trader and his plogy

Originally Posted by ;

The dilemma is that the trader and his plogy

Or the trader and his psis

iandekoker - people all have to start somewhere. Surely you get lots of people losing on mini accounts and small-lot trading, but better than jumping in untrained with their life savings (even though an unfortunate number still do that). They have to test the waters, find out if they're suited to the job and whether they are suited by the work. A few grand lost to find out that you truly don't wish to be a trader is a (long run) cost-effective experience for many, especially if it gives someone information about what to look for in a cash manager.
.

BTW, do you know whether there are other brokers like OANDA that allows you to exchange any size lots?

Because I´m a beginner that is a really important issue to me personally.