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Background: Been "paper" trading for the last 7 years in forex. Developed a tick volume discrepancy analyser to determine if certain irregularities exist in the market and together with a series of techniques I have developed to determine if a possible trade can be taken.

I currently do not have the funds to trade the forex market and the growth will be too slow with a minimum balance trading account since the trading opportunities are possibly 1 to 2 times a year, but with almost 96% success accuracy.

So as a trader with little capital, how can I get started knowing that my strategy opportunities are limited and that my capital is low, but the success rate is relatively high?

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    A word of warning: you may be overestimating your probability of a successful trade if you only have 1-2 opportunities per year. At 7 years of testing, that implies that you have had <15 candidate trades. When you're starting with little capital in trading that can be as highly leveraged as forex, a slight overestimation in your win percentage can make you end up broke. – Jason R Jan 25 '17 at 12:50
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    After paying bills, take any left over money you have and place it in a burn barrel. After lighting it on fire, you will have achieved the same effect as Forex investing. – Pete B. Jan 25 '17 at 13:19
  • Most successful trading strategies are less strigient and try to have many trading opportunities. Usually if the success rate is more than 50% they are doing very well, because the secret is to keep you winners running whilst keeping your losses small. It seems you have made your strategy very restrictive to avoide any loosing trades, the result very few trading opportunities. You are then assuming that all your trades will be winners, so if market conditions change you may end up with some large losses which were supposed to be winners. Make sure your risk management is in place at all times. – Victor Jan 25 '17 at 23:22
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how can I get started knowing that my strategy opportunities are limited and that my capital is low, but the success rate is relatively high?

A margin account can help you "leverage" a small amount of capital to make decent profits. Beware, it can also wipe out your capital very quickly. Forex trading is already high-risk. Leveraged Forex trading can be downright speculative.

I'm curious how you arrived at the 96% success ratio. As Jason R has pointed out, 1-2 trades a year for 7 years would only give you 7-14 trades. In order to get a success rate of 96% you would have had to successful exploit this "irregularity" at 24 out of 25 times.

I recommend you proceed cautiously. Make the transition from a paper trader to a profit-seeking trader slowly. Use a low leverage ratio until you can make several more successful trades and then slowly increase your leverage as you gain confidence. Again, be very careful with leverage: it can either greatly increase or decrease the relatively small amount of capital you have.

  • "I'm curious how you arrived..." - i paper traded starting 7 years ago, but back tested going back to 1997. Thanks for the advice – Hishalv Jan 25 '17 at 13:14
  • @Hishalv that makes sense. Thanks for clarifying. I wish you luck...be careful! – Nosrac Jan 25 '17 at 13:21
  • Even with backtesting to 1997, that implies you've had 20-40 opportunities to test your strategy. I wouldn't say that's a statistically significant indicator to give you the conclusion that your win percentage is 96%. I'm not saying that you're going to go broke either; it might be a truly profitable strategy. I'm just encouraging caution. – Jason R Jan 25 '17 at 14:16

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