Is my trade ok?

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Is my trade ok?

Postby Ghaz » Mon Mar 08, 2010 3:41 pm

Hi folks,

I just want to ask the profis in this forum if I have done something wrong or if I have done everything allright at this trade.
Today i went long in EUR/JPY. You can see it at the picture. I set the stop loss at the lowest point (red line).
My entry signals are the crossing EMAs from down to top, Stoch under 50 and crossing too. Also I use ADX to see how strong the trend is.
Now to the stop loss. I have 1% risk (equal 5 Dollar). My money management calculator said, that i could risk 0.01 lots by 490 pips stop loss.

Now to my question. At the moment i am with 8 Dollars in minus. How could this happen?-I use money management to prevent such losses! :evil:
Last week i made roundabout 1000 Pips with the same entries, but i feel, that there is something frong with the stop losses. Did i understand them wrong?


best regards,


Florian
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Strategies Revealed.JPG
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Re: Is my trade ok?

Postby Ghaz » Mon Mar 08, 2010 6:00 pm

ooohh....i have not told you, that the calculation was for a mini account of course!-so its right.
But how could i get in minus (10 Dollar now) when i calculate it?
When I see my stop loss it could also be 100 Dollar in minus. It is unbeliveable.
should i use micro account?-so, my stop loss would be 5 Dollars....


thanks for your answer!



Florian
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Re: Is my trade ok?

Postby Ghaz » Mon Mar 08, 2010 6:42 pm

i KNOW that i have a mini account. But i dont know why the losses came, because of money management they should not be there ;-D
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Re: Is my trade ok?

Postby Ghaz » Tue Mar 09, 2010 5:48 pm

oh f*uck!
ok, thanks for your explaination!!!
no i will try another Demoaccount. Activtrades should be a good solution. But they only have a month testemonial :-(


thanks,


Flo
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Re: Is my trade ok?

Postby Edward Revy » Wed Mar 10, 2010 6:42 pm

Hi Florian,

just to double check: does your calculator know that you have 5 decimal pricing on your platform?
May be it should be 49 pips, instead of 490?
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Re: Is my trade ok?

Postby Ghaz » Fri Mar 12, 2010 7:42 am

hi Edward,

yes, it is right, because i give in my stop loss in pips.
With the calculation from your other post i can calculate my stop loss. How could i calculate my lotsize by brain? :P
I would need much money by a proper money management to set a stop loss like some strategies want, because sometimes the stops are far away....


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Re: Is my trade ok?

Postby Edward Revy » Sat Mar 13, 2010 2:14 pm

Hi Florian,

It is simple to calculate the lot size as well as the amount of lots you can trade safely.

When you start with less than $500, you'll be able to risk anywhere from $5-$10 on any occasion (which is 1-2% of account balance).
With such modest limits, you won't be able to trade with Standard lots at all, and won't be able to trade with mini lots safely either.

So, having $500 at the start, you'll be looking to trade with micro lots (0.01 standard lot) regardless the leverage you choose.
1 micro lot equals $0.10 USD with xx/USD pairs, and currently around $0.11 USD for xxx/JPY pairs and same pretty close value - about $0.095 USD for xxx/CHF pairs.

What I want to say is that you can always count on 1 pip being equal to roughly $10 cents every time.
This immediately should give you an idea that while trading with 1 micro lot you'll earn (or can lose) $1 dollar every 10 pips.
If you open 2 micro lots, you will earn (lose) $2 dollars every 10 pips.
Ok, can you, for example, take 3 micro lots and risk $3 dollars every 10 pips, which will bring you $100 profit/loss in just 35 pips? (Thinking of risks rather than wins is a proper strategy; $100 is 1/5 of your trading account.) Considering the numbers, you'll see that 3 micro lots isn't a safe bet with $500 account.

That's where you start, and that's how you progress, adding 1 micro lot at the time as your account slowly grows.

Happy trading!
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Re: Is my trade ok?

Postby Ghaz » Sun Mar 14, 2010 11:36 am

hey Edward,

I am such an idiot!-I dont get it.
I understand your system and i can now calculate stop loss and with my new excel sheet i get the correct lot size, BUT i get another pip-value when i calculate it.
I learned to calculate the pip value i make the following (for jpy-pairs): 0.01/137.63(actually curse gbpjpy) * 1000 (for microaccount). I get 7,2 cents per pip as result. :roll: :x
Every site in the www. give me your result: 11 Cent. Also it is not 7.2 EUROcent^^-i checked it :D
Probably it is a digit error in my metatrader?-I hate this "one digit more" philosophy, because could it be, that i should give in 490 pips at my stop loss, when i only want to have 49?
I ignore the last digit, but is it also right when calculating everything?-i am so confused :oops: And i cant change this in the settings. For scalpers it is perfect to gain every 1/10 pip...but i dont need it!

please dont hate me :oops: :oops:

I attached this cool excel sheet. I like it.


Flo
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Re: Is my trade ok?

Postby Edward Revy » Sun Mar 14, 2010 10:21 pm

Hi there,

you're asking good questions.

When you have USDJPY, then your formula of finding out the pip value would be correct 0.01/137.63(actual rate for usdjpy) * 1000 (for micro account)

However, when you trade with cross-rate pairs, such as GBPJPY, you have to add one more step to the formula. That's because when you have an account in US Dollars and you want to buy Japanese Yen against the Pound (GBPJPY), you need first to buy the Pounds with your US Dollars (GBPUSD) and then, next step, using Pounds trade the Yen.

The formula you'd need would be:
GBPJPY pip value = GBPUSD current rate/GBPJPY current rate * 0.01 * 1000

------

With 5 digit platform, you have the last digit representing the 1/10 of a pip.
I must say that this 5th digit is a bit confusing for us traders, because we think in full pips, but have to trade counting the decimal pips as well.
For example, I want to place a 49 pips stop order:
- on 4 digit platform I'll put it exactly as 49 pips;
- on 5 digit platform I have to put it as 490.

Hope this helps. Happy trading! :)
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Re: Is my trade ok?

Postby Edward Revy » Sun Mar 14, 2010 10:24 pm

Here is a nice indicator to add to your MT4 charts, which will show the actual Pip value for each pair.
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