How to finance my trading strategy in foreign exchange trading?
How to finance my trading strategy in foreign exchange trading?
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Hishalv · External communityPost link
External question — Personal Finance Stack Exchange
Author: Hishalv
Original post: https://money.stackexchange.com/questions/75269
License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/
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Background:
Been "paper" trading for the last 7 years in forex. Developed a tick volume discrepancy analyser to determine if certain irregularities exist in the market and together with a series of techniques I have developed to determine if a possible trade can be taken.
I currently do not have the funds to trade the forex market and the growth will be too slow with a minimum balance trading account since the trading opportunities are possibly 1 to 2 times a year, but with almost 96% success accuracy.
So as a trader with little capital, how can I get started knowing that my strategy opportunities are limited and that my capital is low, but the success rate is relatively high?
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Nosrac · External communityPost link
External answer — Personal Finance Stack Exchange
Author: Nosrac
Original post: https://money.stackexchange.com/a/75270
License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/
Adaptation: HTML converted to plain text; contact email addresses removed.
how can I get started knowing that my strategy opportunities are limited and that my capital is low, but the success rate is relatively high?
A margin account can help you "leverage" a small amount of capital to make decent profits. Beware, it can also wipe out your capital very quickly. Forex trading is already high-risk. Leveraged Forex trading can be downright speculative.
I'm curious how you arrived at the 96% success ratio. As Jason R has pointed out, 1-2 trades a year for 7 years would only give you 7-14 trades. In order to get a success rate of 96% you would have had to successful exploit this "irregularity" at 24 out of 25 times.
I recommend you proceed cautiously. Make the transition from a paper trader to a profit-seeking trader slowly. Use a low leverage ratio until you can make several more successful trades and then slowly increase your leverage as you gain confidence. Again, be very careful with leverage: it can either greatly increase or decrease the relatively small amount of capital you have.
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Quoted from Forex.com.bd-Editorial External question — Personal Finance Stack Exchange Author: Hishalv Source score (net votes, not local likes): 1 Original post: https://money.stackexchange.com/questions/75269 License: CC BY-SA 3.0 — https://creativecommons.org/licenses/by-sa/3.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Background: Been "paper" trading for the last 7 years in forex. Developed a tick volume discrepancy analyser to determine if certain irregularities exist in the market and together with a series of techniques I have developed to determine if a possible trade can be taken. I currently do not have the funds to trade the forex market and the growth will be too slow with a minimum balance trading account since the trading opportunities are possibly 1 to 2 times a year, but with almost 96% success accuracy. So as a trader with little capital, how can I get started knowing that my strategy opportunities are limited and that my capital is low, but the success rate is relatively high?
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