Bill realised he had been wrongly influencing Joe, and quietly said: �Buddy - before you decide to do anything with this, come over and have a look at what I do.�
The next afternoon after work, Joe arrived to see Bill studying the screen, trying to get a short scalp on the NZDJPY which was quite active because the carry trade had been unwinding over the previous 12 hours.
Joe was impressed. WOW � four screens � all those charts, and the blinking lights on Bills trading platform looked very professional. But the look on Bill�s face was far from �professional� � in fact it was the look of a very worried man. Strange, thouht Joe � Bill made this sound so easy.
Bill suddenly tossed aside his pen and threw his hands up in disgust.
�That�s the third call I�ve made this safternoon that has gone against me. I set tight stops to preserve my capital. Only thing is � I loaded up on the number of lots I bought to really get some money back, and it hit my stops EVERY time. Not only that, about 5 pips further on, the trades reversed and I would have been really in the money � by thousands.�
�I had it all worked out � risk/reward, position sizing except for the extra lots, and I even had the trends going right on the 15 minute and 30 minute charts. There was just this spike � three times in three trades.�
�How much has it cost you Bill?� asked Joe.
�What � this week? You�re kidding!�
�No Joe � this afternoon alone. So far this week I�ve lost over $4500.�
�But I thought you were doing so well.� Suddenly Joe was seeing a different picture from the one at the barbecue party.
Something was not quite right about all of this. If currency trading was so bad � why did people like Bill become involved in it? If no one made money, thie industry would soon fail and cease to exist.
�So tell me what you do Bill� said Joe.
Bill took Joe through many of the different currency pairs, a few of his favourite indicators, the principles of leverage, the costs of spread, stop loss orders, take profit points, margin calls, and so on.
Bill � tell me � do you always trade the 15 and 30 minute bars?� asked Joe.
�Always� answered Bill. � �That�s where the action is. If you can get the call right several times a day, you can make 200 pips.�
�How many times have you done that?� asked Joe. �No. Don't answer that - I can see the answer on your face my friend. It seems to me that this could be approached in a slower way, but in a much safer way.�
What was Joe alluding to?