I completed Pipsology and have been trading demo accounts for six months. I’ve gotten good at losing money by taking one step forward, two steps backward. I’m beginning to think I might do better by trading against myself using a 2nd demo account. Has anyone tried this?
I’ve tried several strategies. My most common one is rebounding off a sudden spike (37/75 trades). At 830 EST I’m profitable doing that (8/37, but at other times I’m way in the hole. I’m using 100/pip amt on a $50k demo account to mimic leverage of a lower live account.
Trade Basics
Curr: EUR/USD
Grain: 1min
Loss: -300
Limit: (abs(-300*2)=$600. I rarely reach this and if I’m watching and approaching I’ll let it ride.
After a sudden drop/rise of 5+ pips, wait for resistance then buy for rebound.
Strategy seems to work for small pip gain (1-300) but not enough to justify the risk (target of 200% capital).
I clearly need a new strategy - so I’m thinking about betting against myself? Is that stupid? It seems like it but so far I’m getting pretty good at gaining $100-200 pips then losing $300.
If your TA says buy, you won’t be able to make a consistent profit by selling at all such times. You can’t make a random strategy work by reversing the randomness, its still random.
Trading against yourself is another way of looking at hedging. You take a long position and you hedge it with a matching short position so that you cannot lose on one more than you make on the other. But its also a way to avoid making profits as what you make on one you lose on the other, plus you have to pay double the trade costs.
Actually, I thought US traders were prohibited from taking directly opposing positions in forex so maybe you’d need to use two pairs to hedge each on pair.
Thanks. I know it’s a dumb question (and seems dumber now) but I figure I’d better get over myself and start asking because what I’m doing ain’t working.
I’m also tiring of the 1min chart. I thought it would be exciting - kind of the opposite of the way I am - but I get the South Park feeling (“Aaaannd… It’s gone…”) alot if you know what I mean.
There is a small number of traders who use hedging. And there’s a small number who routinely use stop-and-reverse. But in both cases you’d need a strategy that’s fairly uniquely suited to those sorts of techniques.
But you’re doing well in principle - log, measure and question your performance. Look at different ways of playing the game and its logical to start at the extreme of the spectrum - the exact other end to where you are now - the possibility of buying when you think you should sell and vice versa.
And that raises the interesting tactic of seeking out markets where private retail traders are heavily long or heavily short and doing the opposite to the sentiment indicators. Or seeking the bottoms where poor traders panic and close their longs and vice versa.
Well, by what you provide I assume you should cause if nobody else doing so you should keep on the trend to make it possible and then you can try something like that later anyway. See my point ? I do not really understand what is going on there.