After thinking about
publishing my forex demo account stats here, I finally came to the conclusion
that I must share my results and my trades with you guys. In my previous
article I wrote that it's possible to earn some money, but you have to practice
a lot in fx practice account until you come up with a trading strategy that
works and money management that is good for your capital and doesn't blow it up
within a week or two.
Right now I have several
demo accounts where I am testing various strategies (trend, swing, range) and
money management techniques.
What I find interesting is that almost all my
strategies work one way or another, but even my demo accounts are blown up from
time to time. So I started thinking why it’s happening like this. What's wrong
with my trading, and why profitable strategies turn my account to losers?
What I found out after analyzing
my trading style and character was shocking. It's not my strategy that's
important here. It's my character and discipline. So right now I am keeping to
strict trading discipline and money management, because it's more important
than just having a super strategy bringing thousands of pips per month. That’s
just some thought to take into account, when making the next trade...
Let's head on to my trading
account and my trades...
Yesterday I was buying
several EUR/USD pair positions from 1.3405 with stops at 1.3379. As it was my
demo trading account, I made some trades without any stop losses and forgot
that there was a FOMC and rate decision to be made by the US officials in
the evening. I got pretty much busted, when I opened my demo trading account
and saw that my EUR/USD trades without stop loss orders are in deep sh...(OK,
OK…minus). I closed them instantly and opened opposite trades selling EUR/USD
from 1.3290. It’s a pity that EUR USD price went so much down in the first hour
(more than 140 pips), but anyway, it's best to trade with trend than against it.
Right now I suggest waiting
for the price to touch at least 1.3285 and then sell euro and buy dollar again.
We might see the pair retrace to this level today in the evening or tomorrow,
depending what kind of news the US
releases. Today we will hear the initial jobless claims and existing home sales
reports later in the afternoon and those might trigger the market in either
direction, especially when there is such an extended trend. If prices shoot up
for the EURO and other currencies against the dollar, I suggest buying USD from
safe levels after the storm calms down and the emotions in the market cease. On
the other hand, if US
news comes out better than expected, then we will see the extension of the USD currency
trend against all other currencies.
I am also on the lookout
for USD/CAD currency as it seems that this pair is ready for major moves up. The
best entry level is right at 1.0287. Stops should not be over 100 pips and if
the market moves in your direction then stops have to be moved to break even
levels to preserve the capital and money.
I have learned one lesson in my early
trader’s life: you can never be sure about the next move in the currency
market. Just when you think that the new trend is beginning and the old one is
finished, the price comes back with a new momentum, breaking all the resistance
and support levels and taking all your stops losses. So, it’s better to be
prepared for any unexpected moves.
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