Why the FX is not suitable for ...

thanks reaver for your insight.

what i originally meant to draw as coordinates were:

1) number of potential trades for a given setup in a year / number of distinct FX pairs or instruments

2) account size and potential percentage return trading EOD.

to me it looked like, unlike stocks, the low number of instruments and therefore a setup occurring less often with EOD data makes trading this way (aka position trading) a lot less rewarding when having a smaller account.
 
Quote from alex.samant:

thanks reaver for your insight.

what i originally meant to draw as coordinates were:

1) number of potential trades for a given setup in a year / number of distinct FX pairs or instruments

2) account size and potential percentage return trading EOD.

to me it looked like, unlike stocks, the low number of instruments and therefore a setup occurring less often with EOD data makes trading this way (aka position trading) a lot less rewarding when having a smaller account.
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I see what you mean. I'm tracking now. Cool man, best of luck.
 
Quote from alex.samant:

thanks reaver for your insight.

what i originally meant to draw as coordinates were:

1) number of potential trades for a given setup in a year / number of distinct FX pairs or instruments

2) account size and potential percentage return trading EOD.

to me it looked like, unlike stocks, the low number of instruments and therefore a setup occurring less often with EOD data makes trading this way (aka position trading) a lot less rewarding when having a smaller account.
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I'm sure your all basically correct, but it all depends on the setup, at issue is if the setup is that great.

Forex has a lot going for it, but huge diversification isnt one of them-so i thought, until i examined the similiarly high correlation of major stocks.
 
well, let's take a simple setup:

- weekly macd histogram rising
- daily 8.3.3 stochastic below 20

entry at 1/2 ATR above each setup bar (so trail a buy stop)
stop 1/2 ATR contingent below each setup bar
trail to breakeven as soon as price goes half of what you risked
exit by trailing a sell stop 1/2 ATR below the lowest low of each two bar formation that makes higher highs. when higher highs are not made, the stop is not moved up as price is consolidating.

this setup has a potential of about 8-12 trades per currency pair per year. in a good year.

having 10 pairs to watch let's say, means 80-120 trades in an entire year.

which is good for a large account, but for a small account it is a waste of time IMHO.

anything below 300k is a small account.

i don't have 300k to trade with, this is why i was confronted with the issue.
 
Quote from Reaver:

I trade off EOD charts for FX futs...

No worries there I am only in for (usually) 2-10 days....no problems.....

Now, one thing I wanted to mention....have you considered lowering your leverage? (Note: I am referring to spot fx, and not futs as far as being able to change leverage) Your current broker may not allow it, but I would definitely look into it, that way you can treat your forex positions more like you would stocks, due to having lower leverage...


Give it a shot, it might make a pretty big difference for you. Good luck. Hope it helped.
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Why would the broker not allow it?
 
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