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, you're asking sensible questions, therefore no need to feel guilty for posting them. Long , long time ago, when I started trading forex spot ( back in 1987 ) lot of dilemmas that novice traders are facing today had been solved by brokerages that existed back then. Perhaps I need to take you back in time( I feel like a dinosaur), and tell you about it. It'll fix a few of the questions you have asked.Margin trades -- leverage wasn't a issue, only there was no leverage. I started simply by investing money I had in a bank. To my delight, buddy explained that in London there are only a few brokerages that are offering margin trades for derivates (and forex spot is known as one ) so that I might attempt to exchange spot together. Rules were straightforward -- leverage couldn't be bigger and I highly recommend to you and all others, who are trading forex spot less than 2 years, to stick to this rule. Again, at the time (God that makes me feel older ), brokers cared about their customers, and their aim was to keep you alive as long as possible ( forex was unknown to most investors, therefore getting new customers was as tuff as finding new planets ) .So before getting into risk/reward you've got to think about leverage, and how big it should be. Secondly we must discuss how long can you stay in the place. Time frame that you exchange -- In my humble view stay away from arbitrage (leave that to professionals), start looking into bigger time frames. Let say, for argument sake, you wish to exchange term. Meaning that you should open and close 1 place on 1 currency pair, during same week. Lets say that pair is EURUSD ( so if your margin is USD 2500 you need to buy/sell, not more than EUR 9000). Now on weekly chart return in time and look. You'll notice that, in normal market conditions, pair range per week is between 150-200 pips. Therefore, you can not make more than 150 pips on your own trade. Risk Reward Ratio -- that is an matter that is important. My R/R is usually 1:2, but remember I am an dinosaur! So if I'll go to receive 100 pips, my stop is going to be at 50. This lets me cover two losing trades with one winning. If you manage to keep yourself there's a chance you'll be earning a lot of money from this .Looking straight back to my example, EURUSD mid term, 50 pips stop loss sounds sensible. Trading fashion -- you need to choose what's going to be your trading style. Are you currently trading on fundamental or technical analysis. Or both you will find some gut feeling concerned. Whatever you pick, for God's love, please, please DO NOT HOPE. HOPE isn't contained in Foreign Exchange!!!! Once set up all new traders ( and I am new for those that have not been trading over 5 years ) start to trust. If their trade is moving well, they start to hoping that today is a day when market tends to proceed over their expectations and attain some incredible level. So rather executing their original limitation, they start moving it greater.99percent of the time, this can make quite great trade into big loser. In the event market go contrary to their trade, HOPE kicks in, and they start moving their stop away (so rather losing what was initially planed they lose much, much more ). There is a breed of traders that can, with assistance of HOPE, start adding to the place. Never do this! At the time that I started trading, telephone was we had. Trading platforms were non. Now we have luxury of trading simply and so in my eyes all of trading platforms are fantastic .Keep in your mind that, once you start trading for real, lot of things can occur, and you may be thrown into the stone ages. Be prepared to trade on telephone as well. In case. I am new to this forum, so I apologize for my extended posting. I feel that covers your questions, although There's so much to say on the subject. If you have questions, just ask and I am sure , we are all likely to be happy to share our expertise and knowledge with you.