My Story so far

Hi all,

I’m a beginner forex trader and thought I would share my journey so far…

I have spent 2 months playing with a demo account and was going really well, then I switched to a real account with $1000 and made $120 in my first 2 hours… only to keep losing every single trade after that and destroyed my account to $600!

I don’t know what I’m doing wrong and I tried a demo account with the same value ($600) and managed to get it up to $1100 in 3 weeks, so I tried live trading again and so far lost my first trade and now my account is at $500!

I still can’t work out what I’m doing wrong on the live account? I’m following all the same rules! Has anyone else had a losing-streak when they were starting out? What did you do to fix it?

Even though u r down and want to recoup quickly, u gonna have to start trading smaller and build up slowly while protecting what u have. R u using the right MM
U probably been revenge trading after losse although I dont know that for a fact but that is what happens whenu r just starting out.

Hi davenz,

Could you share more details about your trading journey?
Are you sticking to a particular trading plan? Are you trading with the same broker? Did you notice any execution changes after switching to a live account?

Getting success in demo for only like 2 months is not a surety that you will start making money in your real account. A lot of emotions hammer you down when you have real money at stake. Go back to demos, practice more, spend some more months in demo and then fund your real account.

Well, there are some psychological differences between demo and live trading, and I do believe that this might be the factor causing a difference in performance. I myself underwent this kind of shift and I did chalk up a few losses when I made the move from demo to live. Here are some things I learned from this experience though: 3 Psychological Differences between Demo and Live Trading

Gaining success in a demo is not a sure hope that you will be successful in live account . In live account it is a different ball game . Do you have a good trading plan or do you allow your emotion to take charge of your trading decision? You have to be learn much on trading psychology and money management practice, those are most newbie face when entering a live account.

I completely agree with PipDiddy, trading real money is very (read:completely) different from play money. The sense of “my money” is not there in demo…or at least not to the extreme when trading with your own real money.

What you describe in your first trade of making $120 in two hours and then losing more than you made is called the “giveback”. It is a term used in trading to describe exactly what happened to you.

It is a psychological phenomenon where you feel good and gain confidence after making a good trade and then return to not so much trade, but get that good feeling of winning again. However, this time, your confidence covers your sense of caution/discipline/strategy and you end up making sloppy trades.

Following that, the pang of loss now kicks in and you are now not only trying to recover that feeling of winning again, but also to a-lay the gut kick of loss. These two emotions gets the better of everyone and then we end up on an amplified emotional trip that costs us more than we made.

Sounds about right?

Moral of the story is, after successful (and losing) trades, even though you feel like you want to keep trading, stop and take a break. Let your mind and emotions wind down and come back to trade another day. Easier said than done, but this has to be exercised if you want to do it for the long term and be profitable.

Good luck.

If it were me, and I you, I would post my trading method and money management plan and add a few screen shots.
Gp

Wow I can honestly say I wasn’t expecting so many quality replies! Thanks guys! I’ll split this long post into two areas: the psychological side of things and then my strategy.

A little more on the psychology of my trading:
I think revenge trading definitely came into play initially but after stopping for a while (when I had only $600 left) I learnt to ignore the fact that I had lost money. When I placed that next losing trade, getting my account down to $500, I think the issue was because of the timezone I’m in. I placed my stops and take-profits, then went to bed and let the trade run (when I’m sleeping the UK and Europe wake up and I’ve read that this time period is often the most volatile).
So now I’ve switched to A) using a demo account and B) Not holding over night. *Note: during my day (Australia/New Zealand) the volatility is low but trades tend to hold support and resistance… so I read…
Also, I’ve found it extremely hard to do trend trading as I get very emotional about the trade when it’s in the red… or even worse… when I have a decent profit then the next day have none etc.

Now for my strategy:
I’ve combined the Cowabunga strategy (from babypips!) with simple price action, but on the 4hr chart, using the daily chart for a “birds eye view” of the overall trend. So I determine S&R levels and candle stick patterns for entrys but also use a MacD, RSI and moving averages to determine the short and long-term trends.
Settings are:
Charts: trade on the 4hr but refer to the daily to make sure there’s no conflicting patterns etc.
EMA: 5 & 10
MacD: 12,26,9
RSI: 9
Rules: For price action setups I ideally look for pin bars on the daily or 4 hour, but if there are none then I use the cowabunga system, primarily looking for ‘tails’ of candles to support my decision to go in a certain way. I place stops above the previous high on the 4hr. Sometimes lower depending if there were large previous bars or something irregular.
For the cowabunga system, MacD must be facing in the direction of the trade, RSI must be above 50 for long or below 50 for short and 5 EMA crossing 10 EMA for short, or opposite for long. When trading, I ideally look for pull-backs into the Traders Action Zone (TAZ) - This is the area in between the two EMAs.

In the below examples, please note that the thin blue lines are my S&R levels. Also, these are the 4hr charts only (I didn’t want to bore you guys any more than I probably already have!)
Examples:



Notice in the above chart, it appears that momentum is slowing and, more importantly, the RSI appears to be bouncing off the 50 mark with the MacD facing downward so I would ideally go in for a short position with aim of reaching the previous S/R.


In the above, I saw a large downward move (which my demo account made a nice $150 profit on), then consolidation (blue box). It appears to be pulling back towards the TAZ (in between the two EMAs), with the RSI already negative and MacD facing downward. I would enter short on this position.


And finally, in the above the pair pulled back to the previous 4hr low and has entered into consolidation. MacD is down and RSI is negative but this support has been tested twice before so might bounce back.

Well there you go guys and gals. Let me know what you think! And be honest. I know some are probably shaking your head by now but I’m still learning!

I would say trade the absolute smallest lot size and write a journal of every trade you put in. I know that you said you were following the same rules on both live and demo but sometimes our mind can play tricks on us, especially when we are emotional during trading. It is best to put it in writing so that you can be 100% sure. When you start out live, your goal shouldn’t immediately be to just make a ton of money. Trade the smallest lot size and get used to executing your trades under real pressure. If you are still losing every trade then it means that there might be a problem with your trading system. Even though it might make sense logically, sometimes it just isn’t actually profitable. Trading can be very counter-intuitive sometimes which is why people get very stressed about it. You really have to make sure that your system is a profitable system before trading it.

+1 and my 2 cents :33: You can’t control the reward, but you can control the risk. So Money Management is key. If you want to make money in the London session and are not going to be there. Look for setups in the Asian I start looking as soon as Sydney and Tokyo overlap and place a pending order which includes fixed stop loss, entry area, and a trailing stop. Then that’s it. I don’t look at the trade until the NY open when I check to see what happened, enter the trade in my journal, then review the trade to see what went right or what went wrong.

You should notice that I haven’t told you my trading strategy; that’s because it doesn’t matter what strategy you use as long as over the long term your trade method based on the balance of probabilities should give you more positive results than negative. Once you have your trading method, the next part is not so easy but it is a must; “Follow it.” One of the secrets is consistency. That doesn’t mean not to tweak where needed. But follow it.

Revenge trading is when your let your emotions take over. When I first started and got a lot of those soon as I entered the trade, it went the opposite way, then goes right back to where I entered and goes on agreeing with my analysis; which is something every trader goes or went through and has to deal with. I use to not trade that pair for 24 hours to avoid a revenge trade. Some traders move their stop losses; some don’t use a stop loss; some don’t use a stop loss or move it further back. I learned not to be so sure of the why, now when that happens I make sure that it’s not a short term analysis mistake, before I make a decision. Example last night I went short on AUDJPY and first trade got stopped out. After I checked my analysis I realized I made a mistake, so I corrected it, got back into the trade and turned a loss into a profit.

On to money management. By using a proper money management based on your circumstances and goals, not only will you be able to fund your trading method properly, you will find patience and discipline is much easier to achieve. Don’t just use 1,2,5 or 10% or the largest or smallest trade you can use because some traders who you don’t know and who don’t you your goals offer you money management opinions remember; opinions are not facts; same goes for leverage. List your goals, ask yourself what’s my plan. Example I’m a full time retail trader and I trade once a day normally. I’m an intra day trader that in most cases is out of the trade by the New York open. I guarantee you my money management plan is not the same as someone who is a full time retail trader, who’s trading method is scalping or a swing trader who adds and closes to their trades. Same goes for leverage. Use your demo account to test not only your trading method, but as well your money management plan. You have a better chance of reaching your goals when you do the math and the work, rather than letting someone else give you advice as well intended as it could be.

Next review review review, journal journal journal. Your success doesn’t come from one trade, one session or one success. It come from long term planning, more right decisions than wrong and patience and discipline. Make decisions based on “FOE,” relevant FACTS; relevant OPTIONS; then pick the least of the EVILS. Then ask yourself does this decision get me closer to my goals or further based on the balance of probabilities.

Any how that’s my opinion. Hope it helps
Gp

Demo accounts tend to vary from live accounts…and in case of some brokers, they vary widely…
As a rule of thumb, it comes down to this…you can use demo accounts to learn the ropes, strategize, and practice…live accounts vary from demo accounts.

And on the cowbunga, yup…babypips school has all the info you need…and believe me, we have all been there,making one loss after another before we started raking in pips constantly…good luck.

Thanks for the inputs. I’m going to give this next week a go and see how things prevail using my demo account then next week trade my live account again but minimize my lot sizing to about 0.05… I normally trade 0.15 and I think that’s why I keep losing so much.

Thought I would provide an update.

I’m doing a lot better and these are the changes:

  1. I’ve decreased my lot size from 0.15 to 0.05 and, in some cases, 0.03. This has been good because when it’s creeping up/down towards my SL the actual dollar amount that’s been lost is significantly smaller so I don’t pre-maturely close the trade at the loss. As all you successful traders will know, just because it’s creeping towards your SL, doesn’t mean it’s going to take it out… it often bounces back and into profit. So by not freaking out from seeing a large amount loss, I end up holding the trade and sometimes it reverses in my favor.

  2. I’ve started paying attention to the news for some quick gains. I head over to forexfactory and when there’s major news coming out, if it beats the forecast, I put a buy order in and only hold it for a short time. This has helped a lot. If I had a much larger account, those gains I’m getting would be more eye-appealing.

  3. I’ve started forcing myself to look for diagonal trendlines, as well as S/R. I got so fixated on finding support and resistance, that I ended up not seeing channels and trendlines that were right in front of me!

  4. I’ve started reading a lot on forums and twitter. I don’t base my trades around what someone else says, but if I’ve got a long-bias for a trade and the majority of people on twitter or forums are short-bias then I normally don’t place the trade and I start asking myself “why are the majority of them short?”…

So there you have it! Progress! Although I still haven’t grown my account significantly, I’ve definitely made some progress and have some green trades in my history!

Hey davenz,

It’s good that you have changed your lot sizes, which is probably what caused the major fluctuations in your account. However, you should ideally put your full strategy on paper, including your risk and money management rules and exercise your strategy with military precision.

Another thing you should not be doing is “not trade that pair for 24 hours to avoid a revenge trade” like another forum member suggested. The reason why you shouldn’t do this, is because this will influence the probability of your strategy. What I mean by this is that if your strategy has an edge over time, which you have back tested and confirmed, your strategy should make a profit over time. When you then stop trading for 24 hours, you may miss trades that may backfired, but also trades that can make you profit.

My personal suggestion is, that you never risk more than 1% per trade and use a stop loss, trailing your trade. The reason being, that when you have a 600 base currency account, you will never lose more than 1% (6), however if your trade starts making a profit, it can keep on going until it hits your stop loss or you decide to exit that trade.

I also suggest you keep a journal of every trade, and review your trades at the end of each week, to check if you entered and managed them according to your strategy and if you missed any trades. Another thing that you could try is to start with swing trading, using the daily charts and once you get the hang of this and you are confident to start day trading, then you could.

Ohh, one last thing. If you are serious about trading, you might want to invest in some professional education. If you need any suggestions, send me a PM.

The best of luck.

I seriously wrote a massive reply, but for some reason it never posted, so here are som suggestions to you in short.

  1. Start with swing trading using the daily charts and once you have this under control, properly learn day trading as well. You can then trade both methods.

  2. “Cut your losses short and let your profits run”. Try risk managing your trades at 1% with a stop loss and manually trail the trade. This way you can only ever lose 1% per trade and make money as long as your trade keeps running.

  3. Put your strategy on paper and stick to it with military precision. So no 24 hour breaks to avoid revenge trades as this will influence the probability of your strategy working out over time.

  4. Keep a journal of all your trades and review your trades every week, in order to verify your entries according to your strategy and to find out if you missed any trades.

And finally, you might want to invest in professional trading education if you are serious about trading. My suggestion is infinite prosperity. Definitely worth it.

The best of luck.

Thanks MickvWijk! I received both your replies? Maybe it just didn’t show on your computer?

I am currently using lot sizes of 0.01 for swings and 0.02 for shorter trades (such as pin bars etc).

I’ve started a journal and my broker also sends out a daily, weekly and monthly review of all my trades which helps a lot because I have all my entry’s, exits, profits and losses on one page.

What I found really does help a lot is a sneaky little trick of switching the settings on my platform to show the gain/loss in pips rather than money. That way my mind doesn’t sub-consciously think about the money, but focuses on perfecting the trades. This has been really good for me, especially because of using a micro-account. It means that my profit might look small but it’s actually a decent amount of pips, so I’m able to gauge whether or not to hold the trade and prevents me from getting greedy, only to watch the pair reverse and lose my profit.

Here’s another update on my trades so far this month. Is this amount of pips good? Or should I ideally be getting more?


If your happy with it, then its good,

Keep Rollin,

If you carry on such performance in your future trading career, then its a very safe way of trading for you, sticking to the trading plan is the main reason for such good performance.