I'm new to trading and started studying about it just this week.
I have a capital of $10k, and my idea is trading $2k each. Not sure if that's a good idea or not. I can trade $1k each, but the fee will already be $20 total for buy/sell so trying to at least lessen the fee by trading a bigger amount.
From what I've read risk:reward of 1:3 is decent and that I should put a stop loss all the time to protect my capital. So that's what I've been doing.
The problem is my stop loss always gets hit. I've traded 4 times now, and they get hit. Very good learning experience for me.
Let's say my entry point for share price of Company X is 10c, for $2,0000. For my stop loss, I will put 9.7c. That's 3c loss which is 3% loss of my parcel. For my take profit, I will set it to 11c. That's 1c profit which is 10% of my trade.
Is there anything wrong with that strategy?
My stop loss is just 3 pips below my entry point.
Should I be willing to lose more? Say put my stop loss to 9c instead, which is 10% (200/2000) loss of the trade, and 2% (200/10,000) loss of my total capital. But then I need to take profit at 13c if I were to follow the 1:3 risk/reward. For simplicity, I didn't add the cost of the buy/sell, which would be $20.
I want to know what you guys do and what has worked for you. Eager to learn from those with experience.
