Hi all, I’ve been trading forex everyday for a month now and things were up and down but breaking even, mostly through luck if i’m honest.
Yesterday I got margin called on one of my trades due to not setting a stop few days earlier and already being 100 pips down when the EURUSD shot up. So lost 3% of capital in a few seconds and still holding onto a trade that is over 200 pips down.
Despite having a list of rules I’m finding I lack discipline and often move my stop loss up until i have so much sunken cost that i just let it run until it hopefully comes back down, which it usually does eventually with the EURUSD, but we’ll see this time. So I’m grateful for this wakeup call. I’d rather learn the hard way. I won’t forget this one!
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The advantage of using a stop-loss will be very obvious now, and as long as you’re still in the game its a lesson you have been able to afford to pay for. Its not wrong to make a mistake, its just wrong to keep doing it.
I’m guessing you’re working off the daily charts. I see nothing on the dailies to suggest that EUR/USD was going to fall. The size of the EUR/USD rise yesterday was a surprise but I expected a rise to occur as this would be a continuation of the current uptrend - I therefore had a buy order ready at 1.20297, just above Wednesday’s high.
If I had had an idea to get short on this pair, I would have delayed setting a sell order until we had had at least two consecutive days with higher highs and higher lows. Therefore I would now be able to set a sell order over the weekend just below Friday’s low. Obviously I won’t be doing that because price is in an uptrend and I am already long.
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How did you get margin called and then only lose 3%?
Yes you’re right it wasn’t closed out. I had $4 left when I sold one of my positions to protect the other one.
I recommend just risking 1% a trade. And if you move your SL too much then just double the size. If its normally 20 pips make it 40.
If you dont use a SL, start using one.
Just these changes will transform your trading.
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Hello tommor,
Thanks for sharing. With the buy order where did you set your SL and will you stay in this trade after such a big move on Friday?
Also when your explaining your shorting of this pair do you mean if Eu was in a down trend?
Cheers John
On the long, I set the SL at the obvious position initially, just below Wednesday’s low. However I have ratcheted up the SL as I have now pyramided 3 additional long positions of the same size on this pair as price rose. I am only pyramiding the strongest trends these days and only when prices across the 28 top pairs are majority trend-following - what I call positive normality.
With this kind of strong trend and a reasonable level of risk from the additional longs and ratcheted SL’s I’m staying in this one a little longer.
Yes, I would only short EUR/USD if it was in a downtrend, so its just a theoretical exercise to identify where I would put my sell order, I won’t be doing that anyway.
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I hope things turn around for you, but you are correct, time to reflect and apply more discipline to the rules you set yourself
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