JJAM's guide to life... PART I - MONEY & INVESTING

**pumpasaur** · 04-02-2010, 05:56 AM

ok i am at page 15 and have understood everything so far, except how to set a stop loss so you only risk 2% of your account.

i need a formula so i know how many units to trade with.

i tried to work through the example you gave and my brain exploded.

Say my account is $100 and i only want to risk 2%.... 2/100=0.02x100= $2
So i only want to risk $2 per trade.
Now i want my stoploss to be 100 pips so 2/100= $0.02 per pip

Using the ratio chart, i can see i would trade with 200 units, since 100 units= $0.01

Buy WHY does 100 units= $0.01?
what formula can i use so i could work out the example: risking 3% when your account is $500?

Also, i have applied to open up a trade account(not planning on trading yet, i just wanted to get it open), and since im not a US citizen, i have to fill out tax exemption forms and scan my driving licence and utility bills. Is this a straightforward process? i dont want to learn all this and then find out i cant trade for real.

**pumpasaur** · 04-02-2010, 08:27 AM

Say i have 100,000 units and i use 2% (2000 units) this means i am risking only 2% of my leveraged account? Or is there more to it than that?

**jjam** · 04-02-2010, 08:36 AM

I don't really think about it like that. I just know if I have $100,000 in my account that means I can risk $2,000 on my next trade. Pick your SL (let's say 100 pips.) $2,000 divided by 100 pips that's $20 per pip. So how many units are worth $20 per pip? The answer is 200,000 also known as 2 standard lots.

I would prefer to just compare my account to the above example rather than doing any more calculations. That's why I made a post a while back which showed the relative amount you should trade based on a similar example... so something like this:

$100,000 account, set your SL at 100 pips and trade 200,000 units
$10,000 account, set your SL at 100 pips and trade 20,000 units
$1,000 account, set your SL at 100 pips and trade 2,000 units

Just compare your account to the above and dial it in how you want to.

**Dude.Jon** · 04-02-2010, 01:34 PM

Originally Posted by pumpasaur

ok i am at page 15 and have understood everything so far, except how to set a stop loss so you only risk 2% of your account.

i need a formula so i know how many units to trade with.

i tried to work through the example you gave and my brain exploded.

Say my account is $100 and i only want to risk 2%.... 2/100=0.02x100= $2
So i only want to risk $2 per trade.
Now i want my stoploss to be 100 pips so 2/100= $0.02 per pip

Using the ratio chart, i can see i would trade with 200 units, since 100 units= $0.01

Buy WHY does 100 units= $0.01?
what formula can i use so i could work out the example: risking 3% when your account is $500?

Also, i have applied to open up a trade account(not planning on trading yet, i just wanted to get it open), and since im not a US citizen, i have to fill out tax exemption forms and scan my driving licence and utility bills. Is this a straightforward process? i dont want to learn all this and then find out i cant trade for real.

You don't have to fill out all that paperwork if you are creating a game account. To trade real money yes, fake money no.

**Ultrablack** · 04-02-2010, 02:12 PM

Originally Posted by pumpasaur

Also, i have applied to open up a trade account(not planning on trading yet, i just wanted to get it open), and since im not a US citizen, i have to fill out tax exemption forms and scan my driving licence and utility bills. Is this a straightforward process? i dont want to learn all this and then find out i cant trade for real.

Yeah I'm not a citizen either, but they were quick about getting my account open.

**pumpasaur** · 04-02-2010, 02:38 PM

ok so in my game account i have 108,000 units. what is my account balance so i can work out 2% of it? or is it just 2% of 108,000

sorry for being stupid, i just cant see it

**Ultrablack** · 04-02-2010, 03:11 PM

Originally Posted by pumpasaur

ok so in my game account i have 108,000 units. what is my account balance so i can work out 2% of it? or is it just 2% of 108,000

sorry for being stupid, i just cant see it

Your account balance should just be in the box on the left...

**pumpasaur** · 04-03-2010, 01:37 AM

Originally Posted by lolpie

Your account balance should just be in the box on the left...

does that only appear in the Trade platform, and not the Game?

Also, are margin and leverage the same thing?

**Stopdroproll** · 04-03-2010, 09:13 AM

Originally Posted by pumpasaur

does that only appear in the Trade platform, and not the Game?

Also, are margin and leverage the same thing?

Balance shows in game also. If it doesn't, you wouldn't know how much is in your account. I assume the Live platform should be exactly the same as the Game platform.

How much margin you use determines how high you are leveraged. If you use all margin available, you would be 100% leveraged. Just like if you max out your credit card, you would be 100% leveraged.

**jjam** · 04-03-2010, 09:28 AM

Originally Posted by pumpasaur

ok so in my game account i have 108,000 units. what is my account balance so i can work out 2% of it? or is it just 2% of 108,000

sorry for being stupid, i just cant see it

Yea 2% of 108,000 or just make it easy and do 2% of 100,000 doesn't have to be exact :-D

**jjam** · 04-18-2010, 10:53 AM

Bumping this up for anyone else that may be interested. Now that I'm finally settled in back in the USA, I'm going to start trading more actively again.

**Jyeatbvg** · 04-23-2010, 09:16 PM

Sup forex brahs,

I'm thinking of learning some of this investing stuff and getting into it. Mind as well spend my time doing something useful. I just downloaded Meta Trader 4 and started an account with fake funds. Hopefully if I learn the business and get better, I can start investing real money and making some dough. Though I'm starting my new job very soon and may not have a lot of time for this, I'm looking forward to learning and working with you guys and hopefully we'll all be richer in the future.

Jyeatbvg

**Nikhiln25** · 04-24-2010, 05:59 AM

Originally Posted by Jyeatbvg

Sup forex brahs,

I'm thinking of learning some of this investing stuff and getting into it. Mind as well spend my time doing something useful. I just downloaded Meta Trader 4 and started an account with fake funds. Hopefully if I learn the business and get better, I can start investing real money and making some dough. Though I'm starting my new job very soon and may not have a lot of time for this, I'm looking forward to learning and working with you guys and hopefully we'll all be richer in the future.

Jyeatbvg

Sup brah. Look into all kinds of investing. See which one is right for you. Learn everything you can before you put any real money in so you don't limit your chance of making stupid mistakes. Even though you work I'm sure you will find time to invest. It really doesn't take up too much time. I work take classes and still trade without any problems. Of course if you need any help then ask brah

**Fit1NYC** · 04-24-2010, 08:08 AM

in on this...

**Ultrablack** · 05-09-2010, 07:39 AM

is TGP down for anyone else?

**jjam** · 05-09-2010, 08:30 AM

Yes it's down atm. I have been in contact with the hosting company this morning and they are currently working to resolve the issue.

**jjam** · 05-09-2010, 08:45 AM

Any body have some setups for the upcoming week?

I'm looking to get back in short as soon as I get a good opportunity. Maybe on one of the news spikes.

**jjam** · 05-09-2010, 09:51 AM

TradingGameplan is back up

**Nikhiln25** · 05-09-2010, 10:09 AM

buying into faz dog after mutual fund monday

**PapaPrime** · 05-15-2010, 04:11 PM

Hey guys, I used to follow this thread until I got busy with a load of other shiz.. stopped at about page 35.

Anyway, I saw this in my subscribed threads a bit ago and I decided to use my intuition on the market to place a.. whatever you call it. I was just using play money because I don't have the time to invest real monies.. decided to check it out today:

Can you remind me about the pip shiz.. how much they're worth.. what that profit is?

**jjam** · 05-15-2010, 05:18 PM

That was an excellent trade!

The value of a pip depends on how many units you're trading. You can see how much your current profit is where it says "unrealize p&l"

**eehee** · 07-12-2010, 07:06 PM

lol sup forex brahs anyone still trading?

**jjam** · 03-05-2011, 07:36 PM

After a losing year (last year) I took several months off of trading. A couple weeks ago I saw an opportunity, so I opened a trade with low risk, low leverage, and I added to my position. I just closed the trade last week for a 50% gain on my account. It was the best trade I've ever made, and I intend to only take similar trades from here on out.

I'm still working my gameplan.

**everglide123** · 03-06-2011, 01:53 AM

Originally Posted by jjam

After a losing year (last year) I took several months off of trading. A couple weeks ago I saw an opportunity, so I opened a trade with low risk, low leverage, and I added to my position. I just closed the trade last week for a 50% gain on my account. It was the best trade I've ever made, and I intend to only take similar trades from here on out.

I'm still working my gameplan.

nice brah.

What do you think about the randomness of the forex market? Don't you think it's mostly luck involved? It can either go up or down = 50% chance of being right.

**jjam** · 03-06-2011, 07:22 AM

Originally Posted by everglide123

nice brah.

What do you think about the randomness of the forex market? Don't you think it's mostly luck involved? It can either go up or down = 50% chance of being right.

Well yes and no. Yes, it's a 50/50 chance of going up or down from any single point. However we have some things we can use to push the odds in our favor.

1. We can identify the trend. We do this by trading the larger charts (this is why day trading and scalping on small timeframe charts are ultimately not good strategies.) If you look at a large chart, you will see that the trend only changes on very rare occasions. So by trading with the trend you just greatly increased your chances of winning.

2. We utilize our stop loss to protect us against bad trades, and we add to our position size with winning trades. Even if we go back to your 50/50 chance, by utilizing these two tools, you are now taking a small loss on the 50% times you are wrong, while winning big on the times you are right! Remember, the trend rarely changes, so if you are trading with the trend, it's hypothetically possible that your trade can stay active forever (if the trend never changes.) This was an important concept to the Turtle traders, if you are familiar with them. To let your wins ride for very long periods of time. So now, even if you are only right/wrong 50% of the time, your wins still greatly outweigh your losses. In fact, you could even be wrong 99% of the time, but if that 1% trade outweighs the losses of the other 99%, you're still making money. This is why position size and stop loss are so important! They are your tools for winning!

**Ultrablack** · 03-10-2011, 11:30 AM

EDIT: The red arrow means I sold, and the dotted line shows how many bars later the trade closed

**jjam** · 03-12-2011, 05:56 AM

Originally Posted by Ultrablack

EDIT: The red arrow means I sold, and the dotted line is where my stop loss was

Sorry but I didn't understand... what happened in your trades?

**Ultrablack** · 03-12-2011, 07:36 AM

Originally Posted by jjam

Sorry but I didn't understand... what happened in your trades?

The tiny red arrow in the circle means I sold, the arrow on the right shows when the trade closed

I sold both of those pairs, but they hit my stop loss (first one hit it to the pip! grrr) and dropped like 40 pips again

Second trade, I moved my stop loss to breakeven that's why the dotted line is straight, make sense?

**jjam** · 03-12-2011, 08:56 AM

Ahh, ok. Yes I understand now.

Quite frustrating when that happens. In fact my last trade of last year (the one that resulted in my ceasing to trade for several months) happened in a similar way to those trades which you posted.

**jjam** · 05-13-2011, 05:31 PM

I have just closed my second trade of this year for another large gain.

Thread: JJAM's guide to life... PART I - MONEY & INVESTING

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