Growing my small account with good risk management

#1

Hi Guys

I have been reading and studying information here on apex investing for quite some time however this is my first post.

I would like some help from anybody who has experience with ITM binaries and using good risk management doing them. I will try to be specific about what I am doing (my strategy) and what my dilemma is.

I have been trading on Nadex for about 5 months now using the demo account, I have been quite successful doing this. I do ITM binaries on forex usually doing the trades on pairs that aren’t very volatile; For example I will trade AUD/USD and USD/CAD between 3am and 7am ET, and I will trade EUR/GBP in the afternoons after all the high impact news for the day. I do trade other pairs at other times but this is predominantly what I focus on.

I do ITM trades on 2hr contracts and daily contracts (no more than 3 1/2 hours from expiry) usually aiming for a $15-$30 profit. I try get a strike at least 10 pips ITM however sometimes I am able to get a strike 40 pips ITM for a good 15 dollar profit (this obviously depends on the markets volatility.).

My exact strategy is as follows: I always go with the trend. I watch a 5min candlestick chart on tradingview and look for reasons to place trades with the trend (probabilities). So for example I will trade after a pullback, the stochastic will be oversold/bought and there will be a good candle signal such as a hammer signaling the trend will continue. I will then place my ITM trade a minimum of 10 pips ITM for a maximum expiry of 3 1/2 hours away. I HOPE THIS MAKES SENCE.

On my demo account a pretty much never lose a trade this way, to be honest I think the only time I have lost these ITM trades is when i don’t stick to all my rules. I do understand that there will always be losses in trading forex and I accept that. I am confident in my strategy but whenever I get in front of my live account I choke and I just cant place a trade. Like I said, I know there will always be losses, im just so scared that the first live trade I take will be a losing one and it will destroy my confidence.

Now to get into the details…

My goal is to consistently profit and grow my account. I want to earn a full time living from trading as I feel I am good enough to do this.

I have an account balance of $500. With this account balance how do I practice proper risk management and appropriately grow my account. I have seen examples of how to do it with much bigger account balances but I would like some advise on how to do it with my account balance.

I am South African so if I can just get to a point where i’m making a withdrawal of $500 a week this is a lot of money here.

Any and all advise from experienced traders welcome.

Even if there is a different strategy that would be better (i also like doing a strangle on the oil inventories every wednesday) Thank you.

#2

Sounds like you have a decent strategy. One thing you may consider is having a stop in place. Test this in your demo account for a while. For example, if you buy a binary at $75 or $80, have a stop in place to exit the trade fi it goes against you and comes down to the strike price. if the market reaches your strike, the binary will be worth approx $50. So if you buy for $75, you have a $25 profit potential, and a $25 loss potential , giving you a 1/1 risk reward ratio. This way you are not losing $75-$80 IF it goes against you. But you will need to test this in demo with your strategy to see how often the market does go against you to the strike price and how many losers it will keep you our of compared to how many come back and win. The hardest part of trading is YOU! Psychology, fear, risk management, emotions etc This is one of the hardest things all traders experience, is trading the same way in live that you do in demo. You have a strategy that works in demo but too scared to press the button in live. You have to learn to trade in live the same exact way you trade in demo and be willing and ready to press the button. You have to have enough time and experience in demo to trust in your strategy, know your rules, and be confident to take the trade.

Check out some of these webinars : https://forum.apexinvesting.com/c/s1-sanity-psychology/psychology-related-webinars

#3

Start small. trade only 1 contract and build up a “cushion” from profits in your account. Clear unambiguous rules that you must feel confident and comfortable to strictly follow.