[Ingot54]

Bill realised he had been wrongly influencing Joe, and quietly said: “Buddy - before you decide to do anything with this, come over and have a look at what I do.”

The next afternoon after work, Joe arrived to see Bill studying the screen, trying to get a short scalp on the NZDJPY which was quite active because the carry trade had been unwinding over the previous 12 hours.

Joe was impressed. WOW – four screens … all those charts, and the blinking lights on Bills trading platform looked very professional. But the look on Bill’s face was far from “professional” – in fact it was the look of a very worried man. Strange, thouht Joe – Bill made this sound so easy.

Bill suddenly tossed aside his pen and threw his hands up in disgust.

“That’s the third call I’ve made this safternoon that has gone against me. I set tight stops to preserve my capital. Only thing is – I loaded up on the number of lots I bought to really get some money back, and it hit my stops EVERY time. Not only that, about 5 pips further on, the trades reversed and I would have been really in the money … by thousands.”

“I had it all worked out – risk/reward, position sizing except for the extra lots, and I even had the trends going right on the 15 minute and 30 minute charts. There was just this spike – three times in three trades.”

“How much has it cost you Bill?” asked Joe.

“$2500.”

“What – this week? You’re kidding!”

“No Joe … this afternoon alone. So far this week I’ve lost over $4500.”

“But I thought you were doing so well.” Suddenly Joe was seeing a different picture from the one at the barbecue party.

Something was not quite right about all of this. If currency trading was so bad – why did people like Bill become involved in it? If no one made money, thie industry would soon fail and cease to exist.

“So tell me what you do Bill” said Joe.

Bill took Joe through many of the different currency pairs, a few of his favourite indicators, the principles of leverage, the costs of spread, stop loss orders, take profit points, margin calls, and so on.

Bill – tell me – do you always trade the 15 and 30 minute bars?” asked Joe.

“Always” answered Bill. – “That’s where the action is. If you can get the call right several times a day, you can make 200 pips.”

“How many times have you done that?” asked Joe. “No. Don't answer that - I can see the answer on your face my friend. It seems to me that this could be approached in a slower way, but in a much safer way.”

What was Joe alluding to?