Here I am, another year older, hopefully another year wiser, and not quite yet another year richer!
At any rate, late last December between X-mas and New Year’s, I closed almost $80,000 in losing trades. I did so to avoid paying tax on my gains. My gains were close to 80k, so I closed about the same amount so that I would show no income at all. It obviously lowered my account balance, but more importantly, those bad trades were out of the way so that my account was in better shape. My margin level rose significantly which allowed for more trading freedom.
In 2018 I managed to earn slightly more money than in 2017 in forex. The almost 80k I made in 2017 was almost 90k n 2018. So, I saw improvements for sure. Now the trick is to figure out which horrible trades with nightmare swaps I want to close. I am planning to drop almost 90k in open trades between now and December 31!
A majority of my trades are USD/JPY short. I have 3 EUR/JPY long trades, and 2 small USD/CAD long trades I’m not too worried about right now. I will take a screen shot of my portfolio and hope to get some advice from out there. Any feedback you can give me, please do so ASAP as I need to take my losses prior to Dec. 31. I don’t really want to wait till the very last minute, either!
If I understand you correctly last year you made $80k and lost $80k and this year you have made $90k and lost $90k?
But were there some additional profitable trades which you have already closed each year before 31/12? Otherwise it looks like you put in 2 years of work on trading for zero gain…
Tommor, I appreciate the reply. What you’re asking me to confirm is legit. But to say that I have been trading for nothing for the past 2 years would be inaccurate. Midway through 2016, my equity was at 469k. Now, 2.5 years later, I’m just shy of 620. That’s an increase of 150k without adding a dime to my account! Now, if I go back to Dec. 22, 2015, at that time my equity was 301k. I have deposited nothing into the account since then ! To say that I haven’t made any gains would be a little off. My equity has been even higher than it is now a few times. Equity is the most important figure. It’s the amount you would get if you close all trades and withdraw your funds! In addition, my current account balance is just under 920k and my margin level is over 3200%. Both higher than they have ever been. The margin level is at a very safe level and I can go to bed at night without a worry. There had been night I had to to keep one eye open and on my laptop screen while in bed for fear that there could be overnight market shifts that would require my immediate reaction.
In other words, I am making major progress. The best part of this whole situation is that I am a Canadian living in Canada and this account is in USD. While I am looking to improve my positions, if the USD strengthens to an unresistable level vs. the CAD, I can get out of dodge AND add as much as 40% or more to my equity. If the USD is at 40% more than the CAD, $720,000 USD gives me a million! I’m not that far away and if needed could settle for a wee bit less. The USD is currently worth over 36% more!
I have to keep plugging away and be patient.
Just to be clear
Is that a live account?
Have some of those positions been opened for years?
If yes
You should be giving an award for the most swing oriented forex trader.
You should try the Stock market instead, I think your return would be better off.
Yes M_m, it is a live account! And yes, some of those positions have been opened for years! It wasn’t by design, but I don’t like losing and when some of those trades I opened started going the wrong way, I waited and waited and I am now incurring bad losses on them. Having said that, for every trade I am down boatloads of money, I have opened and closed so many more for profits.
Basically, the way I view currency trading is: The greater and longer risks you are willing to take, the more profit and / or losses you will incur. No risk, no gains. Some you win and some you lose. It would have been better for me to shut those losers down and take much smaller losses than to be stubborn and be 300k in the hole on my open trades!!! Having said that, without the risks I have taken, I likely wouldn’t be in the position I am in either. I insist that my experience will make me wealthy with my account in the next few months / couple of years.
Back to my original question… I am looking for input. Which trades of mine do you think might turn around and which ones might be good to close and take losses up to about 90k. Either way I am planning to close some of my trades to so that I show no profits in 2018. I have USD/JPY short and I have EUR/JPY long. I also have a couple of 0.5 USD/CAD longs. Take a look at my screen shot and tell me what you would do!! I am considering closing the EUR/JPY trades (3), or maybe closing one or two of them and some USD/JPY as well. You input will be considered! THANKS.
PS… As far as the stock market goes, I also have some investments (which aren’t going very good right now). I have not started doing options yet but I am considering do that as opposed to just buying and holding or selling. My plan is to eventually get out of forex and focus more on stocks and other investments. I am just looking for the best possible exit from forex and then I will take those USD and turn them to CAD!
Tommor, I hope my response makes the situation a little clearer.
FYI… I lived in Japan from 2002-2011. Back in 2010, I had a vision that the USD/JPY would make me extremely wealthy. HAD I STUCK TO MY ORIGINAL PLAN, I WOULD HAVE ACCOMPLISHED THAT HANDS DOWN!
So, why didn’t I stick to my original plan? Here’s why… Just an example, and I cannot recall the exact dates(s) that I made this declaration (although I could certainly go back in my trading history to dissect it). On October 1, 2010, the USD/JPY hit a low of 80.410. I knew without any doubt that it would eventually rise to a level that could make anyone a ton of money with the proper leverage, enough account money to support the down swings, and patience! The problem was that I ‘over-invested’ and couldn’t hold the fort when the pair dropped to lower numbers. For example, it dropped below 76.00 on August 1, 2011. I had too much leverage and got psychologically spooked when the market dropped into the mid-70s forcing me to sell off. When you are facing the risk of losing everything in your account, you don’t piss around. Having said that, I have had a few rough periods of time since then but it’s made me stronger and smarter. At least a couple of times I lost a ton of money only to get it back in the next few months. There were months – and several of them – where I was closing trades that earned me over $15,000 and even $20,000 per month. Then there were a few months when most of my available funds were locked up with too much leverage in bad trades. Well, right now the bad trades are there but my leverage commitment to them is not in a bad position with my at 3235.84%! Lots of room to maneuver although I am looking to make some smart decisions and hoping to get out of forex within a couple of years IF I am get to my goal.
BTW, on June 1, 2015, the USD/JPY hit a high of 125.845! I guess my forecast was right! I don’t care how much swap you would have had to pay, going from under 76 to over 125 is 5 years worth waiting for! The problem is that there are too many volatile swings along the way. So it would have been better to take profit along the way and keep opening more trades as you go. I have done that a lot, open and close, open and close.
One of my strategies in opening forex trades is looking for short-term opportunities with pairs where the long-term would be a big advantage. This way if you get caught on a trade with your pants down – as I have many times over the years – the future looks brighter. If you were to go long on the USD/JPY when it’s at 125 or 126 just because of a news report or big swing over a day or two, there usually isn’t much room for it to rise! So that would be an example of a bad trade decision. Get the picture?
One more note here… If anyone wants to chat one-on-one, DM me and perhaps we could chat on Skype, FB Messenger or another of the many communication platforms available. Let me know as it’s always good to get input from others. I am free this afternoon for a while.
This is my suggestion, and please wait for others too. This is some serious stuff.
Definitely hold USDCAD until Oil start rising again
USDJPY is a good hold for me too. The USD should fall next year with all happening to the Economy of the US, and investors usually would flea to safe haven JPY for risk aversion.
EURJPY should be closed, the JPY should be strong for same reason above.
Okay, you are a living proof of why people should cut losses small with SLs. Price may never come back, like never. Imaging five years of holding and price still haven’t come back around. Jeez!!!
And then you ask him to call upon @rrram2 who enters thousands of positions, doesn’t like losing, and just waits for price to come back? This guy has 71% drawdown as we speak.
So you want him to ask someone that does exactly what he did, for advice.
Why are there so many trades for the same pair? Don’t you have a solid, tested strategy in place is the main question?
I have nowhere near as much capital as you in my account, my account is a pittance compared to yours, but I trade between 5 and 10 lots and do alright.
And you have a nice juicy account, yet trading 1 lot and seem to have a ton of those trades going on.
Are you just scaling into positions with multiple positions and waiting for it to go in your favour eventually, or is there a clever trick I’m missing.
Always nice to understand the thinking behind the situation you’re in.
The reason I am showing you this is because I had some TPs set on those trades. I competely forgot about those TPs I had set and where I had set them. So, they automatically closed on me 5 days ago and because the swaps were so high in the negative, I got slaughtered on those trades! I woke up in the morning and then realized I lost $4,573.20! I can assure you it was a costly mistake! Having said that, I know that I will be closing some trades down before Dec. 31 anyway. However, I still would have preferred to be the one choosing and be in control of those decisions! Not sure I would have chosen those seven 1.0 leverage trades. I thought that they were going to rebound.
That wasn’t the first time I screwed up on SLs or TPs and paid a price for it either! You learn your lessons and then screw up again!
I like your theory on USD/JPY as well as the EUR/JPY. I am leaning in that direction despite the fact that the swaps on the former seem to be getting out of hand. I think there is a better possibility for me if I hang on to the USD/JPY short trades rather than the EUR/JPY long ones. It seems there is going to be way more volatility in the former.
I always prefer to break up my trades rather than use more leverage in one. For example, if I want to leverage 6.0 lots on a pair, I would prefer six 1.0 trades rather than one 6.0 or two 3.0 trades. The reason is that it gives the trader way more versatility and options as far as how to handle those trades. It gives ones the options of either closing, setting a TP and / or SL, or letting them run wild.
I usually stick to currency pairs I know well and have had a lot of experience with. Occasionally I will venture into other pairs. In the situations where you see I am down several thousand on one trade (which may include a swap in the negative), that was more because I was stubborn and don’t like losing. Waiting for an opportunity to get out of a trade. Some of those trades never presented me an opportunity that I liked enough for which to close them! It would be smarter to take my losses at times than to try and be patient. I think one needs to accept losses on some trades so that it keeps your account under control. I agree. However, if I don’t play ball the way I do, I probably don’t have the huge runs that I do when things are going well!
My account number is more than 1 mil, my practice is a long line of large hands, large profits and small stop loss, I see your approach more like EA, right?
Sorry, M_m, but I am not qualified to try and answer this. The fact that someone has been around the block a few times does not automatically mean they are capable of answering any situation!
I have never personally traded like this and, thankfully, I have never been in the position described which, in my opinion, has nothing to do with trading at all. I do not just stack my losing positions on the shelf and leave them there for years just hoping that one day they will “come right” - except for one week per year when I get them down off the shelf, dust them off, and decide which ones to ditch purely for account window dressing for tax purposes.
The only approach here that, by its nature, would match that kind of “trading method” that created this situation would be to indiscriminately close any trades up to the amount of losses needed to be realised for tax purposes and then reset the same trades in the New Year, put them back on the shelf, and then carry on as normal…just an end-of-year procedure
Actually, you may have missed one thing… I am awaiting an answer from my accountant on the carryover affect of losses. It my memory serves me correctly, I should be able to carry losses over from this year into the future. However, I am awaiting more details.on how much and for how long etc.
I may in fact take a fair-sized loss rather than simply break even. You have to remember that your taxable forex income (I hesitate to call it capital gains although it may very well be the same in most countries) and at least in Canada is solely based on the trades you have closed and has nothing to do with your open trades. How one handles that scenario is just another way to earn or lose money. For traders like myself who often operate with a deficit, just because you have closed trades and made good profit doesn’t mean you will have any real profit to show for it.
If I were to claim 90k in forex for 2018, I would end up paying tax on 45k of that amount. I like my future better by doing a little portfolio housecleaning, not paying tax and even having a tax credit for next year, and having even more funds available for trading or using them for other investments.
As far as my trading practice goes, if you have the financial backing and are not in a hurry to reach your goal, there is absolutely nothing wrong with keeping trades long term. The key is making the right trades that have potential. I am in this to make money and reach a goal.
For me it is a marathon rather than a sprint or even a race.
You can do the same in the stock market and the results might be similar.
I would prefer to break even or maybe take a loss on the books and set myself up for a big year coming up. it is definitely on the horizon.
If anyone can express their thoughts on the future of the USDCAD that would be something I would like to hear about! Liquidating some or all of my account depends on it!
Also, I don’t need the JPY to rise vs the USD and stay that way for a long long time. I just need a major surge, even for a short time!
When I look back at this post and wonder how much money I could have made had I left these trades open till now! As USDCAD has been over 1.36 lately, I would have made a huge sum of $$$. $500 per trade would have seemed minuscule!!! Gor more info., go to my May 15 post entitled ‘USDCAD, had to be patient’.
