Experimenting on a demo account. Someone please tell me how is it possible to place a long order and a short order on the same currency pair and both trades move against move you???
The question is what time did you place this orders,were they in different times or same time??
That’s a good question and I honestly cant say because I wasn’t paying attention to the time frame.
Yeah, just do the babypips course. If you’ve done it do it again. Then pay attention to what you’re doing.
Hi there, it’s a good lesson to experience on a demo account. Let’s say you are looking at GBPUSD and it is trading at 1.2600. You put a long order in to buy above 1.2625 with a stop loss of .0050 (50 pips) at 1.2575. At the same time you put a short order in to sell below 1.2575 with a stop loss of 0.0050 (50 pips) at 1.2625.
You go away from screen for a coffee break. You return to find that the news was released (something big about Coronovirus) so the dollar weakens on sentiment.
It piles down through 1.2575 triggering your sell order at 1.2575, then moves up 80 pips to 1.2655, triggering your buy order at 1.2625. It has already taken out your sell order stop loss at 1.2625, to reach 1.2655 but you did not enter any take profit, so it holds the long trade. Then it tanks again down through 1.2575 and takes out your buy order stop loss. And all that in less time it takes you to make a cup of coffee. Maybe a lesson here. If you know what your strategy is before you enter any trade, you can analyze the outcome. So what was your strategy when you decided to take both a long and a short position on the same pair?
Thank you I really appreciate your feedback. As a newbie I’m learning to develop and experiment with different things. Today I decided to move from 3:1 to 5:1 leverage since i was having some success from last week. As normal I checked for any news releases for the currency pairs I’m watching, then I reviewed my trades from last week. After viewing my charts and indicators I noted what my indicators were doing , i decided to open a long trade EUR/USD as it had been trending up since last week. As an experiment I didn’t place a S/L because I wanted to see how far it would fall before turning around. (As an experiment) Immediately the trade went against me and continued to fall. Secondly, as part of my strategy is to place a trade with correlating pair. I placed a short trade USD/JPY which typically moves in the opposite direction. Immediately the trade went against me. Again no S/L as I wanted to see where this trade would turn around. After both trades moved more than 100 pips against me, I decided to open two addition trades where I shorted the pair I went long on and went long on the pair I shorted as a way to counter my losses. So now I have four open trades. Strangely all the pairs went against me. Don’t understand how none of the pairs reversed and went in my favor.
Hi, thanks for the explanation of what you were doing as an experiment. Because it is a dummy account it is a good way to see in practice what happens. I feel you may be trying to make things too complicated without first getting to grips with the basics. May I suggest starting over again (when this series of trades is all closed) and breaking this down into four separate components. For each component, one after the other, ask yourself: When I enter this trade, how much money am I going to risk, and how much am I going to make? Say you are risking $100 to make $200. Then ask: how am I going to act either if the trade starts to lose money (up to $100) or the trade starts to make money (up to $200). If you can answer “nothing” to both questions, you are well on the way to being able to have a successful trading career. My first objective now, with a number of years of experience and a significant multi-year gap is “learn how not to lose money”. It is logical, with a demo account, to first try to reach that goal, but it is not obvious to most and it took me about ten years to figure that out. Do try to read all the School of Pipsology. You will gradually come to know what you must do in this game.
Best of luck
Thank you I really appreciate the advise, I did complete the course in pipsology and i maintain a 2" binder with all of my notes that i refer to during my trades. The problem I seem to be having is getting stopped out before reaching my goal. Ques. Do I extend my S/L in hopes that the trade will turn around, and if so, how long should i stay in a trade before realizing its not gonna turn around? The other thought was to try to accumulate a number of pips in a bunch of different trades.
If you are getting stopped out before reaching your goal, there are three possibilities:
1 You did not place a trade to the same rules you did your back testing with. Did you do back testing, and how many trades did your back test show successful, and how many failed.?
2 Is your stop loss too tight? What is the average daily trading range of the underlying? What is your stop loss as a percentage of that average daily range?
3 Is your profit target too high? What is your profit target as a percentage of the average daily range (ATR)? If you back tested with the same SL and TP figures, how many of the back tested cases showed a profit, how many showed reaching the stop loss, and what were the average win amounts (multiples of the ATR) and average losing amounts (multiples of the ATR) that your back testing showed?
I hope this helps.
A lot would depend on the time that you placed the order. And if any significant changes happened then.
The strategy that you are using will make a difference as to how this is done.