I am a fairly novice trader and have been dabling into forex trading using demos and I am getting in preperation to go live soon with a small account balance of $300. I know this is pretty small however I think its possible to trade using a broker like oanda that doesnt have a minimum trade size or brokerage (other than the spread).
From doing a bit of research I have come to the conclusion like most more expirienced traders, winning in the game of trading has alot to do with Risk Management (money management). I am looking at a number of stratergies including pyramid sizing my positions and wanted to know if anyone had any expirience / comments about pyramiding a position and risking the profit at a retracement.
This would involve entering a 2nd position once the first profitabtable position has gone into a retracement and risking the profit gain on the first position to increase the contract size.
I have devised a calculator that uses the new stop loss and risks the profit from the 1st trade to increase the size of the new position. By doing this I have realised I am able to increase the contract size by a large multiple but i am able to ensure that if the trade did break down to my new stop loss below the retracement i entered at, I would only losse a max of 2% of my equity before the trade as well as foreifting my profit on the current trade.
This technique looks like it would work well for an absolute return trader.
Opinions, ideas, thoughts, feedback would be super!