FAQ
WHY AM I KEEPING A JOURNAL?
I am keeping this journal solely for myself to be held accountable. I will discuss my daily trades and reflect on them. Please just observe without commenting much.
WHO AM I?
I am a 21 year old international student who started trading forex in April 2013 during an internship after hearing the story of Alex Hope. I received no formal forex training, so I learned from experience in the deep end. After an initial rise, I went on a 9 month losing strategy. After losing $3000 of my initial $5000, I decided to stop looking for the holy grail system and come up with mine. I had a good few months in June and July in which I rebounded and cashed out my capital plus $1600 profit (32% profit). I then noticed my strategy had stopped working so I spent the entire August 2014 coming up with a new strategy, which cost me $1000 as learning capital.
WHAT IS MY STRATEGY?
My strategy involves a 10 pip SL and at least a 20 pip TP using a 400:1 leverage. With the currencies I trade, a SL of 10 pips equates to a 30-50% loss of my account while a 20pip gain equates to a 60-100% gain, so 1 loss and 1 gain leaves my account at breakeven.
With profit taking, a win-loss differential of 60 would make me at least a quarter of a million. This is the magic number and I believe it would be achieved in 4-16 months.
WHY AM I USING SO MUCH LEVERAGE?
I believe I have paid my dues. I used a 50:1 leverage for 16 months and made $1600 profit from it. Now, I have a strategy that involves a 10 pip SL so I have chosen to ramp up the leverage to a level I deem suitable and use $230 of my profit money.
WHAT IS MY TRADING PHILOSOPHY?
Keep it simple stupid – I use only one indicator and the optional Bollinger band. I know nothing about forex and I don’t care where any currency is headed. I trade in the moment
You learn better by swimming at the deep end as long as you don’t die - I use real money to learn strategies.
Trade my whole account - Well, if I am using money I can afford to lose, I believe I should be trading my whole account.
Don’t stop believing.
DO I ACCEPT ADVISE?
No. This journal is mainly for me to be held accountable. Please keep your expert opinions to yourself.
Please note that I do not recommend any trade ideas. Copy my trades at your own risk as I do not announce when I close or open trades.
[U]THE WEEK IN REVIEW[/U]
Monday was a slow first day of trading with my new broker since the North Americans were on vacation. I took an ill-fated USDCAD position and booked a win-loss differential (WLD) of -1. I missed out on a USDJPY trade later on as I was still trying to figure out my best pairs to trade.
Tuesday was a good rebound day. I moved up to a WLD of +0.5 and sat out some good trade ideas because I was scared of losing. Ultimately, all the missed trading ideas came up profitable grrr. I also dabbled with my profit taking percentage and I settled on a 40% profit taking at the end of days with a positive WLD.
On Wednesday, I learned something new after seeing the reaction to the BOC statement. I also learned something new from my ill-fated AUDUSD and GBPCAD trade. I missed out on a GBPCAD trade before the BOC statement that hit TP in 3 minutes because I was a scaredy chicken.
On Thursday, I was caught out by ECB rate cut. I didn’t expect anything from it so I left my phone at my desk went to get coffee at work and got into a conversation with a co-worker that just got back from the UK. I arrived in the same minute I was meant to open a trade but alas, EURCAD had already moved 10 pips. This ruined my mood for the rest of the day. After Draghi’s speech, I was too scared to enter as I thought the euro fall was done. I entered instead a CADJPY trade and another ill-fated USDCAD trade. My end WLD is -1 but I have learned a lot from my first week.
I do not expect to trade on Friday because of the NFP and since both EUR and GBP are exhausted, I expect to end this week with a WLD of -1. But I have learned a lot. I have developed appropriate profit taking levels. Finally, I believe I need to recognize that I’m no longer a day trader or position trader, my scalping trades can reach TP in 3 minutes to 2 hours so I need to stop being afraid of potential event risks.
WEEKLY REPORT: Win-Loss Differential: -1; Capital = $107
Well I didn’t do too well in keeping to the plan. I attempted to catch a fallen knife in the EURCAD and to trade the news for NFP. Both of which I got a loss for.
Yesterday, I opened a GBPCAD and CADJPY trade. I got a stop loss in both and had my capital shrink to a mere $21. I learned from both and made a refining change to my parameters. I hit TP status for my next two trades - AUDUSD and USDCAD trades, so I’m back at $58, where I started the week. The comeback is well and truly on.
So I closed the day out at $91 from a low of $21. That’s a 333% increase off my daily lows (and all time lows?). As long as I am able to channel my inner consistent scalper, this thread could absolutely blow up in the next few years.
My thoughts for the day are mixed. I later had profitable trades in AUDUSD and EURUSD, so my winning run is now 4 trades (possibly an all time high for me). I was trading EURUSD for probably the first time in a year! I got out of both before hitting TP status as I thought the momentum had died down, and 15 minutes later, voila, the EURUSD slide is back on. Since I didn’t reach TP status, I would not count either in my WLD.
Obviously, the best feeling ever is getting out of a losing trade early so kudos to my trading plan for spotting that EURCAD from last week was up to no good as it’s since gone over 100pips in the reverse direction. Same as my losing CADJPY trade. The pair was absolutely paralysed today. USD is looking absolutely exhausted to me, so i really hope another currency takes the mantle tomorrow so that I can get back in the market. CAD and GBP, i’m looking at you guys.
Today, I hit the legendary minute trade. Whatever AUDUSD was smoking at 10am EST, long may it continue. The move was so quick that I could not even set my TP level but I still got out at $50 profit.
I’m like so ecstatic at work now that I had To write my thoughts asap.
USD longs are clearly the gift that keeps giving. Wham bam thank you Ma’am.
I eventually got myself up to $170 with another AUDUSD trade. I then entered an ill-fated AUDUSD trade that hit SL just before a news release reversed it. I am down to $75.
It was awesome while it lasted as I went on a 6 trade winning streak, my longest ever. I also recovered remarkably from my $21 low by recording about 700% increase in just over 30 hours, but all good things must come to an end. Tomorrow is another day, we go again.
Thanks Bob. Yeah there are a few dangers ahead, but I feel I may be on the verge of creating order out of this chaos called forex. I’d switch back to something more mellow and steady if I ever blow this account.
I am still livid from yesterday. I later got yet another signal on AUDUSD so I went USD long but yet again, it hit my SL before reversing. I use a high probability system so naturally, pairs would/should reverse but i’m not going to trade without a SL. I made that mistake when I started trading and reaped the rewards for such stupidity. So I am moving my default SL to 15pips.
I’m kind of pissed because I saw the AUDUSD fall when it was still at 93.5cents. Yes I got about 5 or 6 signals on it during its drop but i’d have liked to stay in the one trade if possible. So I’d be looking to see if I can come up with a strategy for staying in trades. Another thing was my strategy told me that both AUDUSD and AUDCAD were going to break 92cents and $1.01, previous supports. I guess I should stop caring about support and resistances.
I also need a way of staying in trades during London session while I sleep. Both my AUD ideas and GBPCAD from Sunday night went completely mental during the London session, so I guess I am going to start using a trailing stop for overnight trades.
So I’m back where I started the week but with a refined SL.
An inquest has begun into where it all went wrong. The issue yesterday was more than just the SL level. The thread is suspended until I come up with a solution.
I was complicating things by trying to increase the efficiency of the strategy and reduce the number of signals. The market is one chaotic place and no strategy is above the occasional loss. So, I should get back to the basic strategy.
As a result, all profit would be stored at end of trade and so the capital should never increase after a winning trade. A weekly review would be conducted to adjust the capital appropriately.
In the cases of a losing trade, a generous offer of 10% of profit from number of consecutive winning trades before loss would be added to the capital to act as a psychological booster.
The original parameters shall be held.
Since the capital shall never increase after a winning trade, the winnings are more a source of pocket money. And so, the dream of quarter a million should be disregarded until further notice. Consequently, the desire to keep a journal is diminished.
A generous amount of a couple of hundreds has been approved to provide a psychological boost.
So I eventually almost blew my account on Thursday after reading that the USDCHF 15 minute chart weakness was caused by an SNB official saying that they expect a rate cut. I thought USDCHF was going to be supported by this but boy, was I wrong!
I was impatient to rebuild that account so I refunded and decided to go for something mellow.
On my 400:1, I topped up with $270 and I’m down to 130.
On my 50:1, I re-activated and topped with $2000 and i’m up to $2080.
I use the same trading plan for both except I chickened out after a loss and did not use my 400:1 on the next signal I got, which ended up being a winner. I have decided to let winners run, so if my system gives me a winning ratio of 1 in 3, I should be in the green. Of course, this is a cautious estimate but I hope it makes me become a mechanical trader.
PROFIT TAKING: Since my leverage ratio is 1:8, the ratio of my capital in both account should be at least 8:1, so anytime i’m profitable and the ratio gets loopsided because of my 400:1, I’d take profit off it to bring the ratio back down.
For my 50:1, profit taking would occur at month end and I’d cash out a good chunk of monthly profit.
I’d also trade the news when applicable.
Because I’d be in trades longer, I’d trade less and update on my trading performance weekly or monthly.
Finally, thanks to this journal for helping me process my thoughts better.
So this weekend, I was contemplating the idea of not using stop losses on my trades, but instead giving my losing trades a 24 hour period.
Guess what!
Monday morning. My first trade. EURCAD. I open a trade on my 50:1 and set the SL. I then open a trade on my 400:1 and set the SL at the same pip distance. Since the price didn’t move more than a pip in the few seconds between opening the trades, I figure there is no need to get too picky about making sure the SL price is exact for both account. Guess what? My 400:1 hits the SL and incurs a loss of $50 while my 50:1 does not hit the SL! Wow, it’s a game of fine margins. I eventually closed my 50:1 trade at a profit of $50, which was the right idea as price has since pulled back. So luckily, I’m at breakeven with my first trades of the day.
I then decide to give my trades on my 50:1 enough breathing space by using a larger SL. The same thing happens for my GBPCAD on my 400:1 where the price comes so close to my SL that I am tempted to close the trade and then, boom, it reverses like a boss. So twice in one day, I got lucky with my SL. Some may say that I have mastered the art of putting SL, but I think I just got lucky today.
This has ultimately led to the end of my use of this trading plan on my 400:1 account.
Phew! It’s a game of fine margins!
Today’s results: 50:1 --> Profit$200
400:1 --> Loss $50
And I ended up losing $60 on trades made later in the day when the momentum had died :(. It’s a tough task figuring what hours are best for entering trades. Currently, i’m down to a 55 hour window where I can open new trades, so that’s good.
I also opened a myfxbook for my 50:1. I have no idea how to open one for my 400:1 as it seems to be asking me to marry 4 sheep before I can open a myfxbook.
The most important things i’m concerned about on my fxbook is the relationship between profit/loss versus the length of time i hold trades and the winning ratio. I believe this is where the fundamental difference between new newbies and experienced newbies is. When I lost money, the average length of time was 3 days and the winning ratio was at least 70%! From today’s trading, i’m up $136, the average length of time is 2 hours and 24 minutes and my winning percentage is 28%! Remarkably, i’ve won 0% of my longs so far! Mdr.
I have learned so much since my last post so i’m just going to focus on one of my mistakes. We all have a worst pair/currency that always seems to defy our strategy. For me, it is NZD. However, today, I get a signal in NZDCAD. NZDCAD is trading just below the .90 mark and with Poloz set to talk in a few hours and possibly be CAD supportive, I ask what could possibly go wrong with NZDCAD. After 6 15 minute timeframes, NZDCAD has still not moved as much as I expected. I am in positive at this point but i’m getting jittery about this trade, but I figure Poloz is just a couple of hours away from talking so I can sit it out and adjust when he talks. But wait… what is this? NZD starts rallying like a champ. Past .9000, past .9010, past .9020, there’s absolutely no stopping NZD, so I take my SL at .9030 off with the hope that it’d soon reverse but nope, NZD is all into this. Breaks .82 against the USD, breaks .9030 against the CAD. At this point, I’m too scared to look at my account balance so I pretend to focus on my work, but I believe I was 400 dollars down at a point. Luckily NZD runs out of stream and Poloz is not bearish and so my trade re-traces and I can’t tell how grateful I was to close it at a .7 pip loss ($7). I didn’t make any money today, but at least, I didn’t lose as much as I could have lost. Tomorrow is another day and today is probably the last time I’d trade any NZD pair.
Cheers to anyone who looked into my NZDCAD idea from yesterday. You could have earned a cool 70-90pips by lunch time today. I felt NZDCAD was going to nosedive after it came back to less than 90cents at the time I closed the trade yesterday but the rules are the rules and I had already held that position for 6 or 7 hours, which is about 3 times my current average.
I talk a lot about the difference between me of last year and me now and me of last year would have certainly had regrets about closing when I did but that’s because I had no strategy for entering and exiting positions and I didn’t know when next I would be in a profitable position since I was essentially entering randomly. But me of now is just like cool beans NZDCAD, the market would offer more opportunities within the next 48 hours. I am still disappointed that I didn’t set a closer SL to react quicker to the NZDCAD rally yesterday.
For today, I traded the news. Made about $120 combined off the US CPI. Could have been more, but no worries, the rules are the rules and the market would offer more opportunities.
I also traded CADJPY. Made about $130, so all in all, it’s been a good day and I’m up $250 combined and maybe 8 or 9 per cent on my 50:1.
With FOMC coming up, I’m probably done for the day but I’m still getting a signal from AUD…
EDIT: Attempting to trade FOMC with a SL isn’t too smart because of Oanda’s stop hunting all pairs during FOMC releases. Just lost $170. Geezers!
EDIT2: Revenge is a dish best served quickly. I ended up making back $230 dollars within 2 hours of FOMC. While I don’t recommend revenge trading, today was an exception
I lost all my profit from the week ($300) today on 2 ill-thought trades. I like this new found volatility but in a volatile market, it is never advisable to be too smart because the market would eat you whole. It’s just the nature of the beast. It was like the days when I was losing where I tried to be too smart except with volatility, losses get brutal in seconds. I didn’t get a signal for either trade, which only makes it more disappointing. Throw in my FOMC trade and my post-FOMC trade (even though it was a winner) and I think, after a few badass winning trades, I’m clearly losing the plot and not waiting for a signal.
Because of the volatility, I have decided that trading the news is not worth the risk and pips to me, so I’m probably done for the week and now I shall proceed to take a good hard look at my trading thoughts.
The best thing about losing is that you learn more from a losing trade than a winning one, so there’s a few positives today. Firstly, I was able to get out of my losing trade in time before it fell further, so that’s a decent reaction time. Also, my CADJPY idea, like my NZDCAD, went another 70-90 pips after I exited, so definitely, my signals are valid and high probability but I just need to hold on to trades for longer. Luckily, I devised a way of doing this on my bus to work.
A thread that started off with me as a minute man has led me to discover that i’m really a day trader! It took only 18 months to discover this.
I’m probably done for the week and I look forward to playing a better game next week. Ciao.
Today was my first day of day trading and it was pretty good. I started the day with 700 of the remaining 1000 profit I have and cashed out the rest. I also stopped using Oanda after their randomly selected spread stopped me out last week. I made a 60 per cent profit off the days trade so I’m up to 1100 now.