Well, it has been a while…
Where am I at with trading, first of all?
I busted more accounts and decided to go back to square one: what is the problem? Greed.
I opened a new demo a couple of months ago now (more or less) and I have been very conservative.
The demo is a 50k and the goal is to grow the account, now to win the lottery.
I have made about three large trades and the account is up by over 10%.
Now I have decided that this poses an important question: if this were real money, would I be happy?
Yes, if you managed not to lose your initial investment of £50k AND to add over £5k to it then you
should be very happy.
If this return were to be my target for the YEAR, then I would have to do nothing between now and
the end of 2019, not even look at the charts.
Is this a good approach to trading? Maybe. Is it a good approach to investing? Definitely.
The difference is important because it dictates your approach: think of that 10% of your net target,
after losses. If you were to make losses in your first few trades and then make a big win, averaging
at 10%, would you be happy? Yes, because you could have lost more and yet you managed not
This could be very dull but… if this were real money, I would not want it to be ‘exciting’ , rather, I
would want to make sure that I was prudent with it.
My next point is: what has happened to the Lira?
Well, only a few days ago (July 2019) the central bank of Turkey, under its new governor,
cut rates by 425 points: this was not expected, yet the Lira started rallying…
Since April, Lira pairs have been moving south, down to the 200-day moving average: since
the bank cut rates unexpectedly, the 200-day MA has been breached and, in total, we have
now clocked up over 8000 pips.
Remember that the September-November/December drop in 2018 was of 20000 pips, so
this is a significant continuation of that drop after an historic run in one direction.
I have sold EUR/TRY and done well with it, but the logic of an appreciating Lira, even
under a new bank chief clearly under Erdogan’s influence, seems utterly bizarre.