How many trades should you take as a PA trader?

[sunny747]

Like every newbies, this is the question I had in mind when I first started trading and quite frankly, I still don’t have that answer. It’s been over a year I have been trading but started taking seriously ever since I joined this wonderful community.

Lot of experience trader claims they just take one trade a week or even no trade if there is no good setup. I went for that route and lost money. The reason why I lost because I just did not have the experience to spot the best setup. Then I started taking multiple setups a week with small lots on real account, just to learn and understand behavioral pattern of each pairs. And Yes I lost money again but I gained some value able knowledge.

I’m still not experienced but learning to spot that good setup. It surely takes more time and effort compare to times while I was taking daily trades.

It’s no pressure to take few trades a week when your account is small and let money management assures the rest. But for bigger accounts, it is surely some nerve crunching decisions. Nobody likes to see hundreds or thousands of dollars on the negative side.

My ultimate goal is to take 4 trades a month. I would love 1:3 RR win once in every two months.

But at the end of the day it depends on every individual I think. Would love to know thoughts of fellow traders. Thank you.

 

[TheForexGuy]

Hi Sunny,

This is a common question, but I think the logic trap here is to set static goals like this. 'How many trades should I take a week' or 'how much do I need to make per month'.

The market is dynamic and you need to be too. Some weeks you may need stay out completely because the market isn't offering anything to your taste - but you should try to meet your personal 'quota' by going ahead and forcing a trade for that week, just to satisfy your one trade per week rule, if that makes sense.

At times there are nice trends around and it's like shooting fish in a barrel. I prefer to stick with the one trade at a time rule. Sure 1 trade per week sounds really sensible, but sometimes I have a trade open for greater than 3 weeks and I just wait for it to complete it's course before doing anything else in the market.

I find that I do better when I don't open more than one position. It works for me, and it may work for you too.

Just remember at the end of the day, you can only take what the market offers you.

 

[danny]

[The reason why I lost because I just did not have the experience to spot the best setup. Then I started taking multiple setups a week with small lots on real account, just to learn and understand behavioral pattern of each pairs.] i used to have similar problem, so what i did was i do extensive backtesting trading using a trading simulator. All the data used are from past market movement, so you get the real trading experience. I think this is the fastest way to train your eyes to catch good setups and also train your brain in anaylsing the setups.

You won't be wasting a single cent and it also speed up your experience. The only thing you gonna be wasting is your time. Just be honest with each trade you make (meaning you would have taken such trade even in real trade) and keep the data about your winning and losing so that you know whether you're making money at the end of the day or not.

What i did is, i saved the screen shot of my win and lose trade. And revisit the losing trade to see what i did wrong. I've uploaded an example of how i do my backtesting

 

[danny]

The money are only there so that you can play around with your risk money setting. The only problem is that, you won't be able to see the MN and weekly support and resistance. But, if you can trade based on the S&R of your daily chart alone, successfully, isn't that good enough? i've uploaded an example of why i backtest

 

[danny]

an example

 

[sunny747]

Thanks Dale. your reply answered lot of my questions and definitely i'm feeling better knowing i'm not doing anything wrong.

Danny, i was not aware of the back testing simulator. surely i'll check this out. thank you. Also trading journals, i knew about it but never recorded. but just recently i started keeping record of my analysis . i'm using evernote app and i have notes for each pair. For example, i have notes opened for eur/usd and i shall write down what i thought on that particular day by dates. i can add the screen shot as well. Later after a week, i shall recheck if i was right. if wrong, i would try to find out why i was wrong.
and this journal thing really made a lot of difference in my trading. i'm developing my own database about the pairs which is helping me to take decisions.
Big thanks for sharing your notes. so good to know how others dealing with it.

 

[danny]

http://www.forexfactory.com/showthread.php?t=70742 here's where i got the simulator

 

[TheForexGuy]

I think I've come across that backtester before. I have developed a similar one for MT4 - that one has major issues when using pending orders.

I will bring mine out soon, it works perfectly.