AlwaysCurious
Contributor
I, too, am facinated of the possibilities the Forex market offers. As I said in my introduction thread, I see it as a possibility to get a second income stream without risking my current J.O.B. With this income stream, switching to an own business (whatever that will be) should be a lot easier. To get a feeling for this kind of trading and to determine what reasonable goals I should set, I started demo trading on Oanda. I read a lot of Forex trading the last two months and am quite active in two related forums. Out of that I´ve chosen three strategies, that I'd like to test because they do sound quite promising. Next thing I did is I dug out the old demo account I abandoned long ago after few unfortunate tries. That´s why the account started with 77K$. (At that time I didn´t realize how to reset the account *sigh*). Leverage is 20:1 which I rate quite reasonable. In the graph below you see my proceeding for the last 6 weeks.
At first I traded with no money management at all. The risk per trade has been 20% and more. But accidently and unfortunately it succeded, giving a completely false impression as any serious trader will assure you. The next days I adjusted the risk per trade down to 4% which is still a little high, but hey, I wanted to learn, I wanted to trade. Because signals form the chosen systems showed up quite seldom, I my decisions were determined by hope or interpreting things into the graphs. I failed, but I failed with good stop losses and good money management . For the last 8 days, things stabilized. I managed to keep a 1,3% win each day. Doesn't sound impressive? Well compounding it's 11000% a year even with a low leverage... Of course this will not be constant all of the time with changing market conditions. The toughest thing to learn is to keep emotions out and trade mechanically. The other condition for me going live is the ammount of time, I put into this style of trading. It has to decrease signifficantly. Until I haven't prooved myself those prerequisites I am able to do this, I won't go live. Otherwise it would be lottery.
Lessons I´ve learned:
Cheers :cheers:
(PS: Just to be clear: This is NOT my entire PLAN for fastlane. This is just one little aspect. The PLAN includes tracking of spendings, saving plans, simplifing my life, setting up own values and principles and deriving my future path from that. I intend to post on that once I succeed on my way there.)
At first I traded with no money management at all. The risk per trade has been 20% and more. But accidently and unfortunately it succeded, giving a completely false impression as any serious trader will assure you. The next days I adjusted the risk per trade down to 4% which is still a little high, but hey, I wanted to learn, I wanted to trade. Because signals form the chosen systems showed up quite seldom, I my decisions were determined by hope or interpreting things into the graphs. I failed, but I failed with good stop losses and good money management . For the last 8 days, things stabilized. I managed to keep a 1,3% win each day. Doesn't sound impressive? Well compounding it's 11000% a year even with a low leverage... Of course this will not be constant all of the time with changing market conditions. The toughest thing to learn is to keep emotions out and trade mechanically. The other condition for me going live is the ammount of time, I put into this style of trading. It has to decrease signifficantly. Until I haven't prooved myself those prerequisites I am able to do this, I won't go live. Otherwise it would be lottery.
Lessons I´ve learned:
- Choose a strategy. The more strategies you allow for yourself the more complicated are the following advices.
- Only trade on clear signals of your chosen strategy. Don't trade out of a mood.
- Always question you decision to enter a trade. Play advocatus diaboli with yourself.
- Accept that there are days with no signals and no trades for you.
- Take notes on every trade, why you've entered it. Track down which signals prooved to be right, so you can evaluate your strategy later on.
- Accept losses and stick to your stop loss levels. Do not hope for things to turn out well by adjusting them and therefore taking a higher risk.
- Accept your wins and don't get greedy. Stick to your TP you set at the beginning of each trade.
- Accept bad days and carry on. Stick to your strategy until it is prooven to be wrong (not out of a mood!)
- Accept good days as nothing special. Don't let your positive emotions lead you to take more risk than before. Don't change strategies to get even more.
- Everyone has to learn this lessons by doing. There is absolutely no way in avoiding these traps without a thorough demo trading period. I have the strong feeling that another learning phase will start once it's about real money.
- Visible constant growth. Drawbacks are allowed, but I still have to determine to what degree.
- Necessary time for trading has to be reduced to 15min, three times a day.
- From an emotional point of view trading has nothing to do with gambling or adventure of some sort any more (as it is today, it's plain fun). It has to be mechanically.
Cheers :cheers:
(PS: Just to be clear: This is NOT my entire PLAN for fastlane. This is just one little aspect. The PLAN includes tracking of spendings, saving plans, simplifing my life, setting up own values and principles and deriving my future path from that. I intend to post on that once I succeed on my way there.)
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