Hello everybody. I am a newly born, 4 day old trader with a demo account at FXCM. I am a bit suspicious of my successful results. Out of @ 20 - 25 trades, I have only lost on two, on the first day.
I employ a very conservative strategy, with a goal of consistently winning a series of small profit-takings. I want minimum exposure with almost all trades closing within 4 hours.
I enter close to the market price and set a profit target not far off. My trades do tend to close within my 4 hour window. In fact, since those two mistakes on the first day, I have not lost. So far it has been a boring but consistently winning strategy.
I observe the money management principle that says do not expose more than 20% of your equity, or in quick and dirty terms as I understand it, always maintain a usable margin of 80%. This is to avoid overleveraging and thereby avoid margin calls. I have never had a margin call.
I started with the usual $50,000 balance in the FXCM demo account. To day, the 4th day, the balance is just over $55,000.
I asked the FXCM help desk if the same rules re margin calls apply to their demo account as to their live account and they said yes.
I realize my style of trading is instinctive and is technical (not fundamental). I have already experienced once how the fundamentals can shock the market and throw all technical analysis out the window. I went long on G/U which made sense from my instinctive view until the bad housing data came out in the UK and clobbered the pound. At one point, I was -3,500 on that lot. 28 hrs later I closed it at +510.
My basic concern is: it can’t be this easy, or else everyone else would be trading and making money.
Put it another way, is it possible that a demo platform be programmed to provide falsely successful results in order to lure beginners into depositing live money into a live account? Well, I know it’s technically possible, but has anyone heard of that actually happening?
Thanks, an absolute beginner perturbed by “too much” success. I would appreciate any of your thoughts or lessons learned the hard way.