After a month of studying and messing around with different strategies on demo accounts, I’ve decided to start a serious demo account to trade as if it were the real deal. I will try to trade my strategy consistently for a full quarter and depending on the results, I may decide to open a live account.
The demo starts with a $5,000 balance with FXCM, and all trades will be a 1:1 risk-reward ratio, risking %2 balance (not equity) per trade.
I am using a combination of trend lines and S/R lines on the daily chart to identify areas of interest. I will only be trading with clear trends or in an obvious ranging market. Once price has entered an area of interest, I will use the 4 hour charts to time entries based on price action signals - primarily strong pin bar and double bar setups. Additionally, stops will be set first, and the trade will only be entered if a 1:1 RR may be achieved without approaching an S/R zone.
I hope to achieve a success rate of > 60% for a full quarter before I open a live account. However, if I come close to this goal I may decide to open a live account with a small balance and only risk $10 - $20 per trade, as experience on a live account will probably be more valuable than a demo.
Additionally, I would appreciate feedback on my trades. I will be including screenshots of each trade.
This pair has been trending strongly upward, and just formed a double bar on the trend line, with plenty of room to reach the target before the marked resistance area is reached.
This trade hit my stop after the news yesterday. However, I stand by my entry and believe it was a good trade. I will be looking to go long on USD/CHF again if I see a bounce off of the marked 0.9520 S/R area.
I’m also now experimenting with a 20 candle EMA and looking for bounces off of it to further determine the strength of possible entries. I’ll update when I’ve entered another trade. Until then, best of luck to everyone!
I took this trade last night when I got home from the bars. When I woke up this morning, it had hit the target. I could have achieved a 1:2 risk/reward instead of 1:1, but for the purposes of testing this system, I’m sticking with 1:1 on all trades.
The entry signal was a nicely formed pin bar that bounced off the recently broken downward trend line. It also happened to form just above the 0.6600 psychological level.
This trade didn’t pan out, as my stop loss was hit early this morning. I didn’t feel overly confident about entering this one, and I probably should have trusted my instinct to stay away.
I was watching this pair very closely, looking for a pullback to the 0.9500 major psychological level. Sure enough, on the 1H chart, price bounced off of that area and formed a nice bearish 2 Bar Reversal. I set my stop entry at 0.9450 with a 1:1 R:R, as usual.
I was a bit hesitant to enter this trade after the failed trade last night. I had to force myself to forget about that one, and focus on this potential entry with complete objectivity. Having accomplished that, I determined that this setup was worthy of entry.
This trade just hit the target. So far I have 2 wins and 2 losses for a total loss of 0.01% (the slight discrepancy comes from the fact that micro lots are the smallest increment that I can trade).
