I am a newbie in FOREX trading. I have been practising with a demo account at ETX Capital since November 2013. I made quite a bit of money. I then started live trading on 9 January 2014.
I have decided to be a day trader. I only trade trending charts on the bounce, that is, I do only phase 1 of a cycle. I enter a trade on the second candle, after a small one in the buy or sell zone. I use ATR to calculate my stop loss at open price-(DATR(20)/2) and my target at 3 times price+(DATR(20)/2)
I went long on the GBPUSD for the following reasons:
Daily Chart and Weekly chart both trending up.
The10 and the 20 Moving Averages both fanning out.
There is Convergence between the MACD and the RSI
Price Action is in the Buy Zone.
The up-trend is confirmed by the second small green candle(Higher low)
I lost that trade. Yesterday, 16 January, I went long for the same reasons with the USDJPY pair, I also lost that trade. When I applied the same strategy with the demo, I won; but when I do it live, I lose. Anybody out there help! What is it that I am doing wrong?
I am part of a small investment group amd we trade multiple strategies both manually and automated. The long and short we have seen for January so far is that this month kinda sucks. Our trades are staring to pick up now. We look to trade with smaller risk in the beginning and slowly increase during the back end of January. We learnt this the hard way. Good luck and stick with it you will bounce back.
Ok, that is interesting. I would say that your strategy makes sense, and you have some result in demo to seemingly prove it. I have had this problem in the past that you have a strategy that starts to turn and you dont know why and you freakout. In regards to trading real money, it can be different as brokers can manipulate spreads and things that they dont do in demo. I would say, trade small size (to keep the emotion out of things), and keep going until you have done, 10-20 trades with real money. Then you can be confident that there is something truely different.
Transitioning from demo to live is usually tough for various reasons. ALL traders have losing streaks. I lost 15 straight a few months ago when I first started my demo after a long layoff from trading. It happens. I won 15 in a row afterward and got a little ****y which led to 3 straight losses because I didn’t follow my trading plan. Don’t concern yourself too much with a couple losses, just make sure you’re keeping your risk under control (small trades to start out), get out quickly when you realize trades are not going where you thought they would to keep your drawdown low and stick to your trading plan.
14 isn’t a lot of trades and a couple of months isn’t very long to practice or test out your methods, learn timing, etc. It doesn’t sound like you’re doing anything “wrong”. It sounds like you’re just learning and adjusting. Things are constantly changing in the market and it can easily throw your timing off at times so we are always learning, adapting and tweaking.
Are you keeping a trading journal? I’ve found it useful to review my thoughts and feelings before, during and after trades. Also, did your demo account have the same amount as you are trading in the live account? There is a huge difference between trading $100,000 or more and $10,000 or less that takes time to adapt to if not. Hang in there! It will come with time and experience! If you are unsure of yourself or your system, go back to demo until you regain your confidence. Hopefully your losses were not too significant.
Maybe it’s just an odd loss here or there. Trade smaller amounts and give your “system” a chance to prove itself before you write it off and decide to hop onto the next bandwagon.
All traders have different methods and strategies - as long as you can remain profitable, then there’s nothing “wrong” with what you’re doing.