I’ve been looking at Forex for the past few days and spent a lot of time going through the BabyPips school and playing a little bit with the demo account.
Although I’ve made some gains, it was mostly due to blind luck - I was fooling around with the FXCM platform and made a profit of $2,500 on some trades, only to lose $20,000 overnight (all in demo mode, of course - I took to heart the suggestion that I should spend a few months at least playing with the demo software before investing any real money).
Anyway, I guess I’m posting to share my excitement because overnight I finally made my first successful [U]educated[/U] trade!
Yesterday evening, I thought I saw a double-bottoms trend forming for the USDJPY pair (thank heavens for BabyPips explaining different types of charts and expected trends). Excited, I bought $33,000 (I’m working with a $736 virtual deposit, since I know I won’t be able to invest $10,000 when I go live, so I prefer to work with around $1,000 to keep it as realistic for me as possible).
I bought at market rate at a point where I thought the double-bottom trend reaches the second trough; I figured that, if my assumption was correct, there was nowhere for the trend to go but up.
In fact, here’s the 15min chart (red is the level at which I bought the currency at market price, green is the TP):
What followed then was hours of agonizing waiting, checking the price every few minutes and gasping in horror every time the price dropped somewhat due to tertiary trends.
Then I gave up, went to bed, woke up this morning - and found myself $122.73 virtual dollars richer.
In this scenario, money isn’t the big achievement - I realize that a gain of $120 is nothing by FOREX standards.
The important part is that this is the first time when I actually closely looked at the chart, saw the emerging pattern and assumed that it’s going to follow to its logical conclusion.
In short, the first time when I actually made money based on an educated assumption, and not thanks to sheer blind luck.