Leverage is a little overrated in my opinion.
1:25, 1:50, 1:100, 1:400 etc etc

To me, it merely affects the money management.
Eg. Say I am a fundamentalist,
I think a particular pair is bullish/bearish
I take into account of the volatility.
Then I take position with lots of holding power.

Say I am a news trader.
I listen to the announcement.
I quickly decipher what it means to the pairs which I am going to trade.
I enter the trade.
As the movement began to stifle, I exit.

Say I am a chartist, which I am. LOLz
I look at the chart.
I enter the trade based on the preset money management system.
I exit based on the said preset system.

Hence, although, I am a chartist, I d only say that the leverage only affects the money management part. Technicals are optional - depending on your preference.

Of which, I d interpret it as:-
Based on the capital structure which you have, you d like to have a certain leverage.
This is in line with your money management system
Additional leverage provides comfort as there is more margin for error

At the same time, you re not overly concerned with the exact number of profit/loss
You re more concerned in % as it reflects more accurately what was the performance of the trades

Betui tak?

So is Support/Resistance & Pivot

Looking at your results, I observed that you have erratic quantum of performance - ie. Sometimes a profit/loss of less than USD 1, sometimes in the region of USD40++, sometimes somewhere in between. There seemed that there is no consistency.

It may suggest that your system has not defined the entry/exit points.
Alternatively the issue may be in execution, ie the slippages.

In addition, it is worth noting the MFE and MAE - Maximum Favorable/Adverse Excursion - or the maximum paper profit/loss per position which is not shown nor tracked by system. This can be used as basis to adjust your trading system.

Your statement of - I get most of the trades right, but when I'm right I gain little profit, but when I'm wrong I lose lots of pips - is not good.
It would mean you have high accuracy but very low risk reward ratios.
This is not sustainable in the long run.
It is quite easy to put together a system which has high accuracy but low risk reward - the problem is that it is not sustainable.

My suggestion is to go back to the drawing block. Of course, it is merely one man's opinion. May not be right

A courteous fellow, very rare these days!

Part discretionary trader - another rare quality!

The key now I think then it is about probability of reward. If you can somehow incorporate the probability of that into your trading system, then its all set and go!
By probability I mean, cherry pick. Cherry pick the patterns/signal based on your study of your signals. Segregate them into categories like:
1. High probability of big run
2. Medium chance of big run
3. Yes, it ll go that direction but risky ie anytime may reverse.

Good Luck and Happy Trading!

No worries, once you ve had enough of entering too early because of the fear of missing the boat, you ll have more patience.
Hmm, now that I put it that way, it doesnt sound too good, does it?
Well, think of it this way, at least this is how I look at it.

How we trade is actually reflective of our nature of our true self.
As one trades better, it helps the process to become a better person.
As one becomes a better person, he/she trades better.
Kind of like a never ending cycle.

Enjoy the ride

I do not follow the 1% rule.
I have a slightly varying idea of stops.
1. I do not set stop loss in the system. I execute the stop manually.
2. I do not have stops which is 20-30 pips as the way I view the fx market is that 20-30 pips is usually a mere "noise"

That said, perhaps it is because I am a position trader. I take a longer viewpoint with higher holding power, hence I must tolerate movements of sometimes a few hundred pips.

Trading system needs to match with your risk appetite and capital base.

I do not use pivot, but trend wise, you can see for EUR/USD
Weekly - Down
Daily - Sideway with downward bias
H4 - Down
H1 - Down

No worries. Skill will come once you ve spent enough time looking, analyzing and trading

Dont put so much cry icon. Its not cute when you re a man

---

Added on February 17, 2011, 10:34 pmHmm, now to come to think of it, I do not know if you re a man or a girl

This post has been edited by maxforce: Feb 17 2011, 10:34 PM

Long post, allow me to break it down to answer.

"Why would u want to hold a few hundred pips of drawdown when u can exit and wait for better entry."
I use a longer timeframe of which sometimes a few hundred pips would then only suffice to determine the trend.

"If you know the market is going on ur favor, u should have also know the risk involve."
Yes I do know. Thanks for the concerns though.

"There are risk that you tot the market should be bullish, but instead the market could went a few hundred pips against you and stays there or get worst. Some jerk in Central bank can easily blow all ur trades by a few statements. If thats happens thats a few hundred pips of loss or thousands."
Its a normal case for trading. When we enter a trade, we hope. We hope that in all our analysis, etc is proven right.
However in reality, it may not be, for whatever reasons it may be.
Reasons for the wrong analysis etc can vary from Central Bank to political unrest to anything the journalist could think of to feed in our minds. To me it is not so important as I rely only on my charts. Hence my reasons for my wrong analysis when it happens is fairly different from news events.

"While I agree that trading longer timeframe should have largr stops, but I will not agree that one should trade without a stop. besides stop with 20-30pips are usually good enough to handle the noise."
I did not mention that I trade without stop. I trade with mental stops, not stops keyed into the trading platform.
This is merely a case of preference meeting the monitoring time. I do not see any issue here.
20-30 pips may be sufficient if say one is using 15 minutes timeframe etc. For Daily chart, 20-30 pips is definitely insufficient to determine a trend change.

"Anything above its just means you get the market wrong. What Luqmaz suggest is what I would suggest too, it is a better way to trade, risk must be in controlled. no matter what."
Try not to impose the 20-30 pips which may work in your system into other systems which you may not be privy to.
Risks is controlled in my case, so no worries.

"I would rather eat that 20-30pips loss and reenter later than trying to hold 200-300pips drawdown, because if with 20-30pips loss I can make 10 mistakes and still losing the same as your rarer 1 mistake. If I make 10 losses in a roll, it is not the market goes wrong it is myself who got wrong."
Once again, 20-30 pips depends on your trading timeframe. I do keep open positions for months. So I really do not see why I should be concerned over 20-30 pips, otherwise, I need to worry about the movement almost every hour.

"Well thats just me and my perceptions. Cheers."
Thats right. And this is mine. LOLz. Cheers to you too!

EU on balance. Thinking should long instead?
Monday will know

Agree. Trading is vs ownself. Not vs market. Not vs other players in the market.
As one conquers himself/herself, then naturally he/she will trade better.

To make money from forex is simple but not easy.
One must have:
1. Workable trading system
2. Discipline to follow system
3. Capital and monitoring time as required by the trading system

By Trading System, it means to have the following:
1. Defined signal for entry
2. Defined signal for exit
3. Defined average accuracy
4. Defined risk reward ratio
5. Defined timeframe to use

This trading system should be:
1. Backtested for reliability
2. Forward test (Demo) to ensure take into account of realtime movements
3. Forward test (Live) to ensure suitability to the user, ie monitoring needs, preference etc.

Further notes on Trading System:
1. Workable system is not one with high accuracy but low risk reward ratio or one with low accuracy but with high risk reward ratio.
2. High accuracy but low risk reward ratio may result in many small winnings but one big loss which wipes out all the winnings.
3. Low accuracy but with big risk reward ratio is akin to the Big Sweep - RM3 for RM3 mil
4. It is a balance between the accuracy and risk reward ratio. Alternative view of it may be:
Accuracy x Average Winnings = System's Reliability

20 pips or 200 pips stop is dependent on the trading system and money management.
By this, it means a balance needs to be striked between-
1. Capital
2. Lot size
3. Volatility of the timeframe of the instrument traded

In general, there are two types of methods:-
1. Trend trading
2. Range trading

Trend trading depends on the collective movement of prices in one direction.
Range trading depends on the sideway movement of bouncing off support and bursting at resistance.

Market trends 20% of the time, making 80% of the moves; whilst
it tends to be ranging 80% of the time with 20% of the moves.
This is a general guide, in line with the pareto 80-20 concept. Different instrument may have different percentages. Prior to trading the instrument, it may be worth to conduct a study on the past behaviour.
Note: Sufficient data should be obtained to ensure that the myopic conclusion is not derived.

Ultimately, trading success is dependent on:
1. Workable trading system
2. Discipline to follow all requirements of the system including monitoring time, provision of capital etc.

Hence, it is that simple. But only definitely not easy.
The notes above are only illustrations of what needs to be done. I might have missed out much more

In any fields of excellence, most dont make it.
Yes, at some point, one has to choose between the idea of being great or being average.
As Benjamin Disreali would say, "Life is too short to be little"

Have a good weekend!

The moment you ask "What happened?" then you re either a fundamentalist or a news trader.
But then, if you re using pivot as your main tool...

At some point, you ll need to choose your path.
Its not unlike the branding strategy whereby some brands are known for low cost, some are known for quality and even those quality brands have their own differentiation. The idea, the brand needs to appeal to certain segment of the market as one cannot be all things to all people.
If apply into trading, I ve yet to see one who can play well all sorts of methods at the same time. At different times yes, it is possible.
I can see lots of confusion in your postings.
Eg. the 20 pips stop loss.
For some, it is seen as absolute. Oh 20 pips kena. Must stop. Lari. Cut. Lose USD20 better than lose more. I can be wrong more times.
Yet, today you saw, EU went down more than 20 pips. Only to rebound back all the grounds it lost.
Question: Is really 20 pips safer?

Of course, perhaps capital is the issue - cannot withstand 200 pips perhaps. Then maybe instead of playing 1 lot, perhaps play 0.5 lot or 0.2 lot or any lot size which is more comfortable to the style of play?

The reasons for the fall is not important. The journalist will come up with 1001 justifications - its their job, since everyone demands to know why. So what if one idiot said this and cause it down? The next minute some other idiot can say another thing and it went up? So, if really the market is so naive, then we must issue a gag order on everyone?

Anyway, take some time, think through it. If possible, go to any bookstores, look for samples of trading systems. Or just search online. Compare them. Look at its strength and weaknesses of all systems available. Then perhaps, you d be ready to make a system of your own.

Transvestite?
On a more serious note, good post

Another HYIP?

Could be overtrade if one day swing can make from considerable positive to negative.
"Considerable" here depends on one's definition of course.