Hello dear babypips fellows.
I started my trading Journey right after joining Babypips about 6 years ago. I have never been a full time trader and have been trading on and off. I faced a lot of ups and downs during this self paced learning process. I am currently in the middle of a turmoil. I took a loan of $4,000 from a friend to be invested in the market which i had to pay in the span of 5 years as a total amount of $5,500 including interest.
I have paid $2,800 in terms of payments. I am currently earning $250 monthly from my day job and i am stuck with $2,400 of left over in my trading account. It is to be stated that i am partnered up with another friend and we share profits on the basis of 50/50. We started with a big account and withdrew money to pay off the loan. My partner has decided that we will not withdraw anymore money and i have to pay off the loan by myself.
I want to earn 8-10% monthly so that i could pay off the loan as $100/mo using my part of profits.
I have a good trading system and I only trade EURUSD and GBPUSD on 4h chart but unfortunately it has become a zero sum game for me. it has been 6 months that i am still at $2,400. it is not that i am losing any money but whatever i earn, it goes back to the market.
It has really become hard for me to give a big slice of my monthly pay from my day job to the person whom i owe money to.( as i pay $100/mo in terms of monthly installment).
I know i should not have traded with that money but decisions were made and i did it and now i find myself stuck in the middle of nowhere.
I initially take 0.03 of lot size on EURUSD and add up to a winning position. I want to keep the emotions at the bay but somehow i have been so euphoric to get rid of this loan that i do not want to waste any daylight and wants to earn profits as early it could be ( Which is obviously resulting in getting me nowhere but making me pay the installment from my day job salary). My average winning and losing trades are of about $30. It has occurred several times to me that i do not close any winning positions and they later turn out to be a losing position. Moreover i jump in to a trade everyday with a panic in my mind that i have to be quick as the time is moving on.
i need help to devise me a system where i could break it down to weekly or daily profit or loss targets so that i could earn money and pay off my debt.
At this point i am totally helpless and i am desperately looking for help.
PS i can provide further info on my system if needed.
did you ever demo trade prior to going LIVE with the $4k? Also, how is it a good system if you have barely earned any profit from it? Also, you mentioned that you trade based on the 4HR. Is that the only time frame you look at when you’re trading? There’s a bunch more questions to be asked lol but I say you take a break from LIVE , and go back to demo and start from there
I have been earning good profits in past but the loan is getting on my nerves. i start my analysis from weekly chart and narrow down to even 1H for entries but i just do not stick on to my system no matter how hard i try. i follow it but gradually evade it sooner or later.
that’s one of the issues then, how do you know if your system is truly effective if you don’t stick with it? Go back on demo, and backtest your strategy
thank you for your assistance.
I am going to answer the question you didn’t ask but should have. You should focus on paying off the loan by giving back whatever is left in the account and the remainder from your monthly income. Then save up your own earned money to start a new account.
You now have it in your mind to trade for the purpose of pay off debt. To make it worse, the debt you are paying off is the very account capital you are trading with. With that mindset you will lose all of it.
Some takeaways
*Never trade with borrowed cash
*Only trade with your own money, and money you can afford to lose
*Get this 8-10% a month stuff out of your vocabulary, it’s a roadblock to you becoming a real trader and making real profits
*Focus on learning how to trade and managing your capital rather than hitting some arbitrary monthly return that you have no control over.
I think this depends on the mentality of the OP, rather than assuming it’s not a sound principle. Many businesses don’t start from hard earned cash, they use loans and funding. Many successful traders have also started from funded accounts from wealthy friends and family; my point is that it’s not always a poor approach to take providing you really take accountability and perform the basics well, which in this instance might not be the case.
You start a business that sells a product or service where the income is derived from paying customers, sure borrow money if you need to and believe it’s worth the risk.
Pretend being a trader while not knowing anything about trading or have any history of successful trading, then no, borrowing money to get started is one of the dumbest things a person can do. It would be irresponsible of me to state otherwise.
I’ve been around long enough to see how this story plays out. I’ve seen it a thousand times and it ends the same way. every. single. time.
I’m not trying to win brownie points here, just trying to help people avoid making poor decisions or avoid exacerbating already bad situations.
I agree with what you’re saying, my quote above is where I would consider it acceptable.
There’s a few retail traders who are well publicised from starting out from funded accounts - but yes, as you mentioned, they already have skin in the game and know what they are doing.
I have mentioned that i can not withdraw any of the money which is left in the account. Instead i want a small %age of continuous profits so i could payoff the loan in a span of 2 years.
I juat want to realize how much of profit as in $ amount should i consider on weekly basis to get let say 8% of profit per month.
You’re saying you can’t close the account.
That doesn’t sound like a partner.
What happens if you don’t pay it back?
I’m not advocating that, just asking.
Perceived expectations, arbitrary assumptions and goals create turmoil with emotions which can crush an account.
KC
This is the situation that I have been through. Never have the expectation that there’s a system that works all the time. Profiting in Forex is all about having your winners to cover your losses. Your losses could be in a worse streak. But few winners can cover your losses and the extra left after subtraction is your profit. What i do suggest now, if you are really serious of paying this loan debt, bscktest by using your system from last decade till now. List down all the trades that you are pretending to do in backtest. Backtest till the current date and see if your system works. Summarize the performance anually. Every system is different. Like for mine, I could have two years of losses let’s say 60 percent of my balance, but third year of trading will gain me like 100 percent of my balance. Do the math and you could see it’s actually growing. I also add in fund every year in a fix amount. It could sound funny but that’s my money management methodology