The only thing i would suggest, that it is not a huge amount of money, but proportional amount. One strategy that worked for me, and mind you i am trading FX Spot markets, is that broker products allow you to trade even as low as 1c per Pip. By utilizing those type of products, you can devise the roadmap for position sizing according to your account. The example would be, let's say you are starting with $1k account and your maximum risk is 1% per trade, that means that depending on your stop losses you would be able to trade live with positions between 10c (cents) and a dollar a point. As your emotions fall in place, and you earn positive points you can progressively top up account till you get to the 'living' point. It is enough to inflict the pain and enforce the discipline, but will not break the bank.
As through the weeks and months positive trading, your emotion handling will grow, and you will learn to treat the trade mechanically and see only points or pips, worrying about the dollar figures only while at the bank teller.
One of the most common mistakes, and one i have done as well, most beginners tend to take 'shortcuts' and jump ahead in a hope that they will make money. The one thing that markets have thought me is that there are no shortcuts. If you do not have complete method and able to follow it with just about no emotions, you will loose money.
Markets are logical and
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Are you trading the right market for you? (The ES is the most difficult market to trade)
Are you confident in your method? Are the signals clear or are they subjective and open to interpretation?
Are you properly funded? Are you trading scared?
Are your trading goals realistic? Are you trading win or die?
Are you emotionally prepared? Is trading fun for you or do you dread beginning each day and sigh with relief when the trading day ends?
Are you trading from a written plan?
Is your reward/risk properly set?
Do you really know how to manage the trade? Do you know beforehand when you need to exit or do you keep giving the trade more and more "breathing room"?
Do you have a lack of trust in yourself? Your method? Or the market?
Is trading the right way to make money for your personality?
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This is an excerpt from an article I wrote about the importance of trading with a plan.
Trading With a Plan
Everyone has a different emotional reaction when it comes to money. Entrepreneurs are always taking calculated risks. They realize there is always a risk of loss but they take that risk because they think the chance of them being successful is greater then their chance of failure.
There are hundreds of thousands of traders who are trading without a written trade plan. There are those who have been trading for so many years they don't need one, but you do.
Successful traders use a trading plan. Big institutions often have a plan written for and executed by a computer. If you don't have a trading plan of your own how can you hope to survive?
You have to think like an entrepreneur. The trade you take with a well thought out and executed trade plan will have a greater chance of success then failure.
As stated above, and earlier in this thread a while back, was READ THE BOOK TRADING IN THE ZONE, and also read the Disciplined Trader, both by Mark Douglas....
Having fear, which is what you are experiencing will be impairing your trading, and you will essentially be funding other traders accounts, if you trade with real money....
Mark gives multiple ways to identify and collapse negative believe's, the most important thing for me when I was going though this "scared feeling" was to be able to identify my thinking. The technique to do this can vary, but a very easy one that I learned was simply counting to 5, and staying focused on doing this for 15-30 minutes per day, EVERY DAY. The more you do this, and focus ONLY on counting, your mind will start to drift off... Once you realize that its drifts off, you need to re-fucus...
This application is VERY beneficial when I am trading, if I am trading, and a negative thought starts to arrise in my mind, I am able to quickly identify it and dismiss it immediately. I know that every moment in the market is unique, so when stuff happens, I just look for my next trading edge, and take it, I know that over multiple trades is where my success will come from, not just this trade, or the next trade..... Learning to thing like this can take time, but doing these exercises, and especially the trading exercise as outlined in marks books will help you get there faster.
Also another very valid suggestion which was given already in this thread, was to reduce your trading down to a level where you dont care. Perhaps trading a micro account on the FOREX market doesn't sound good, but doing this as an exercise to learn the mental skills can be invaluable experience....
Just my .02...
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Dismissing your fears, sticking to your plan, and having the self-discipline to dismiss any negative thoughts that enter your mind, will allow you to consistently follow your plan, and equity increases flow into your account.
If you're having fears trading, it's likely to due one or both of the factors below:
1) Risk aversion. Simply put, you much rather not lose $x than win $x, despite the trade having positive expectation. In this case, trade smaller. You should typically be risking 1.5%-2% per trade anyway, and if that's what you've been doing, then go even smaller. The amount lost and won should feel like nickels and dimes.
2) "Unconsciously" you're not confident in your trading. You understand some trades are going to be losers, but you don't feel your system has merit to make a profit in the long run after commissions. In this case I think it's reasonable to continue to trade on a demo until you create a sample size.
These is exactly my problem, lack of a plan. Thus ended up blowing my first trading account and afraid to trade a second one. With so many indicators/systems, which one will make a good plan for me?