The Start of My Fund

Trading Discussion Trade Journals
1

Hello there. My name is John and I am currently 28 years old and live in Texas. I just graduated medical school and I have been involved in Forex for a little over a year now, although I have not been trading for a year. As i have spent much time refining my strategy. I have learned some good stuff from BabyPips and if your new, I recommend learning Price Action through one of the threads in FREE FOREX TRADING SYSTEMS as this is my strategy.

I will be posting all my trades with explanations. Additionally, we will be following my account balance that I have with FXCM. I feel like many people on here are offering up information and they have either a demo account or a very small live account. I would honestly feel more comfortable taking advice from someone trading a $100k account rather than a $100 account.

AM I ANY GOOD AT TRADING
I guess we will see. Trading price action I would say that I am somewhere between 15%-20% in profit from my account. But I have not been trading consistently each month. So we will start at break even starting Monday, December 8th, 2014.

As I said, I just graduated medical school and therefore am in residency currently. For anyone familiar with this, you do not make tons of money in residency, but I have a live account with approximately $5,000 in it. So we will go from here, and I will probably add more and more money over the course of time. And I expect this account will grow to 6 and 7 figures. No, I’m not saying I’m going to turn $5,000 into 1 million. But as I continue earning income I will add more to this. And in a few years after residency, I will have a much better salary and will be able to put good sums of money into my account.

HOW MANY TRADES DO YOU TAKE A WEEK?
I take between 0 and 3 trades a week usually. Just depends on the setups as I trade off the Daily charts mainly. You will see more of my strategy as I post trades

WHAT IS YOUR RISK/REWARD?
I risk anywhere between 1-3% per trade. That is good money management. Maybe in the future I will increase this to 5%. I also never take a trade that is less than 1:2 risk:reward. If I’m risking 1%, the minimum profit target needs to be 2%. I usually have trades with an RR of 1:3 or greater.

Lastly, this is not a strategy where you spend the day in front of your computer. Checking the charts 1-3 times a day is probably average for me for about a total of 15 minutes.

I think this is good for now. I will post again when I take my next trade. Hopefully there will be some good setups early next week.

Let me know if you have any questions

2

Hi there- I have a few questions if I may please…

Given your experience level, can you please comment on how you feel “15 minutes a day” of chart time is going to lead to you learning how to trade? Have you ever heard of Forex Tester 2?

You sound like a smart guy, so, I’d also ask: Why would trading be any different then any other endeavor in life, in terms of how much “time” you need to put in behind the charts? Do you think professional traders @ the major financial hubs of the world plug into the markets 1-3 x / day, for 15 minutes? If you wanted to become a professional martial artist, would 15 minutes / day training in the gym lead to this?

Earning 6 figures trading is @ the professional level.

Understand, that 15-20% profit is Wall Street super hedge-fund manager ROI. What do you feel makes your situation unique in that you’re seeking 6 figure account growth, w/ 15 minutes / day of chart time?

When you say “I risk 1-3% / trade”- in what situations do you risk more? Likewise, in what situations do you risk less? How quickly do you move to eliminate risk?

Have you done any research on trading psychology- more specifically herd mentality? Is that factored into your trading plan?

Please don’t interpret these questions/comments as snarky- b/c that is not my purpose. Just interested in seeing your answers and debating.

Jake

3

I’m more than happy to answer these questions. I will try to address each one.

First, when I said “15 minutes a day”, I was referring to the amount of time it will take to look at the charts for any potential setups each day. I mainly trade Price Action off the daily charts and will sometimes take entries off of the 8hr and 4hr. Doing this only requires checking charts a few times a day and it only takes a few minutes to scan 25 different pairs for these setups. Therefore, around 15 minutes a day. I am not starting from scratch and attempting to get good at trading by just looking at charts 15 minutes a day. I have spent the last year studying and think I have a good starting strategy already developed. Of course that is yet to be seen as far as long term goes. Furthermore, since getting good setups with price action trading off daily charts only gives usually a few setups a week, if any, I am still studying on the side for more high quality types of entries. I am currently trying to learn harmonic patterns to add to my trading to give me even more high quality trades. So the 15 minutes refers to just scanning the charts for setups I have already deemed to be good trades to take. I continue on a daily basis to study to learn new entries and also to further improve my current strategy by looking at my trades that may have succeeded or failed. I agree that “time” must be put in to be successful. I think the saying is something like it take 2000 hours to master something, or something along those lines. Hopefully that answers your question.

As to the 15-20% comment. I know if a hedge fund makes 20% a year that is considered good. I’m not trying to say I’m better than a Wall Street hedge fund. I’m just pointing out the approximate profit I have made on my account since I have been dabbling in trades recently. I have seen serious traders on the forums say that their yearly goal is around 50% and others saying 100%. I’m not making any predictions on where I will be. We will just see what happens.

No, I haven’t heard of Forex Tester 2

I tried to explain this in the first post… I don’t expect to turn $5,000 into 1 million. I have been fortunate enough to choose a profession that pays very well and having a great salary will allow me to add more and more money to my account to where hopefully a combination of account growth plus additional funds gets me into a 7 figure account balance. This is obviously a few years down the road.

Currently, I do not risk more than 3% per trade. Maybe in the future I will increase my max risk per trade to 5% if I identify setups with very high winning percentages. I keep a log of each trade I take so I can see the statistics, but there just isn’t enough data at the moment. If my data eventually shows that a certain setup wins 90% of the time, then why not increase my risk to 5% on that trade. That will turn a risk:reward of 1:3 into 15% profit from 9% (if I was risking only 3%).

I currently have a 10 point system that I use that I will explain with each trade I take. Includes things like Fib levels, S/R lines, tick volume, candlestick formations. Scores of 1-5 are trades I risk 1%, 6-7 are 2%, 8-10 are 3%. I sometimes will move my SL to breakeven after price has moved near my TP. But I really don’t have a set of rules for that at this time. I always have a stop loss that limits my risk to 1-3%.

I haven’t done much research on trading psychology. I have heard of “herd mentality” but haven’t read on it very much and I guess it isn’t incorporated into my trading plan.

Hope that answers your questions

4

When you trade based on daily chart, I don’t think there is too much to analyze, the only concern is the SL which would be larger for normal day traders.

It also seems you will be swing trading; if so, no need to concern about herd mentality as long as you have stops in place.

Good Luck and Wish you all the best.

5

I know you dont want to hear from me, ( Small account ) but keep in mind, Risk/reward can be over rated in the long term, UNLESS you follow your system perfectly from start to finish. Almost ever trade will be differant in terms of possible pips gained.

What your saying is today, since your new, you want to risk 3%. But when you get better, or your strat shows more consistancy in hit rate, your going to risk 5%? It should be the other way around. Your risk is what amount of pips, you allow your trade to run against you, hence SL. If you have 15 minutes a day to look at chart, how are you going to move your SL to break even on ANY given trade that your in?

Your trading per confidence level, Ala your point system.

WHy even take the trade if your a level 1? THATS the risk, just even entering a trade with such low confidence level. Thats just dumb money. Why not just trade signals that give you a level 10 on the point scale? Then risk just 1% entirely, till the signal goes against you, and take profit.

Your looking for longer swings, and those longer swings should have a more definitive profit target if entered correctly, and R/R could ultimately be 1:20+…

Remember, risk is what your willing to lose, and patience and precision is vital.

Good Luck,

6

Thank you Kumar7

In response to MoneyNVRSleeps

The length of my trades range from 1-5 days usually. Again, I have more than 15 minutes time a day. 15 minutes is about the amount of time it takes to scan charts a couple times of day looking for setups. I have the FXCM app on my phone. I am always able to check status of a trade and move to break even if I decide I want to.

My average SL is probably around 30-50 pips. So usually I have profit targets between 100-200 pips, depending on where the next area of S/R is at. So I’m not usually looking for longer swings. Hopefully I will be posting my first trade soon so you can see a setup.

You ask why make a trade that scores a 1 on my system rather than just wait for the 10s… Actually, it is hard for me to score less than 3 and still take the trade based on the scoring system. So I should really say a score of 3-5 gets 1% risk, not 1-5. The reason to take the 1% risk on scores of 3-5 along with risking 3% or 5% rather than 1% is simple math.

Lets say I have 20 trades over the course of a year that I rate as 8-10 on my point system. Say I win 75% of them and risk 1% on each and have a risk:reward of 1:2 (which is the minimum ratio I take). I would win 15 trades (+30%) and lose 5 trades (-5%). Profit is 25%.

If I risk 3% on those same trades then I win 15 trades that get me 6% profit (rather than 2%). This is 90% on those 15 trades. And the 5 trades I lose, I will lose 15%. That is a profit of 75%. So why not risk more if I think I have a profitable setup. I am not at risk of blowing my account when I’m risking 3-5%

Similar reasoning on taking the trades that score a 3 on my system. When I have a score of 3, I still believe its a good enough setup to win atlas 50% of the time.

So on 20 trades that I win 50% of the time I win 10 trades and I lose 10 trades. Again, minimum risk:reward is 1:2 so on the 10 trades I win I would win a minimum of 20% (on 1% risk) and I would lose 10% (on 1% risk). So by taking these trades I add an additional 10% profit.

Hope that answers your questions. You have to be willing to risk money to make money. And I want to make as much as possible

7

The whole “trading Daily and H4 charts only” is still something which I can’t understand.
I get it if you have a job where you literally can only check the charts when you’re at home, or sitting on the crapper via a mobile device…but, if you have the ability to monitor the markets for a few hours a day, why would you limit yourself to the Daily charts only?

A D1 trade setup w/ a 200 pip profit target and 100 pip stop, is the same exact trade on an M5 chart via a 10 pip stop and 20 pip target…

8

[QUOTE=“FOREXunlimited;671027”]The whole “trading Daily and H4 charts only” is still something which I can’t understand. I get it if you have a job where you literally can only check the charts when you’re at home, or sitting on the crapper via a mobile device…but, if you have the ability to monitor the markets for a few hours a day, why would you limit yourself to the Daily charts only? A D1 trade setup w/ a 200 pip profit target and 100 pip stop, is the same exact trade on an M5 chart via a 10 pip stop and 20 pip target…[/QUOTE]

Cool man. Give me a system on the 5 min charts that you know will be profitable and I’d prob look into it. I don’t have anything on the 5 min chart I am comfortable risking thousands of dollars on

9

The same exact system you are using on your daily charts, will most likely work on your M5 charts.
Price action setups are not limited to the daily chart…

10

. Are you serious? Haven’t you ever looked at the same pair on different time frames? On most occasions You get two very different pictures. For example, a pinbar setup on the Daily might still be viable even though price has been moving against you for a couple of hours on shorter time frames. If it meets your criteria for a good trade. e.g(its doesn’t break through the pinbar low on a long entry or a pin bar high on a short or it doesn’t hit your predetermined stop loss )…I don’t trade bigger time frames but I can see how avoiding the noise and whipsaws on shorter times might be appealing to someone with limited time on their hands

11

This thread is turning into an argument. Not quite what I had in mind lol.

Price action candles and S/R lines are much more reliable on a daily chart rather than a 5min chart, just my opinion.

And I already have a job. I don’t want to be spending my free time staring at a computer all day. I rather be spending time with family, enjoying life etc. Those are the perks of higher time frames right

Anyway, I’ll post trades when I take one. Looking at my charts, I may have a trade later on today. Will post if so.

12

I have entered my first trade

Starting balance is just above $4,900

GBP/USD short @ approximately 1.5650 with SL @ 1.5681 (30 pips) and TP @ 1.5550 (100 pips)

Risk is 2% as I scored this about a 6 out of 10. Therefore, $100 risk is 2% of $5,000 account so I have bought 33 lots, risking $3.30/pip.

I am unable to upload images. I will have to figure out what is wrong. So for this one I will just explain.
This trade is

#1. With the trend --> +1 point
#2. Tick volume on the entry candle was average (but it was higher than previous candle) --> I give this +1 point
#3. A nice looking pinbar formed on the 8hr chart and I give it +2 points; candles I think are average entries I give +1 point
#4. I give it +2 points for forming the pinbar at a good fibonacci retracement
#5. Price is a little short of hitting my diagonal S/R lines on daily chart with that pin bar, but I still believe price will reverse. But no extra points

13

nice try; gl with the next one.