How I lost £000 trading Forex. The side of forex trading not told…It seems too many there are lots of opportunities on the internet to make money none more so in the forex or even the stock market. So what do you need, well a pc and internet connection and oh yeah an account of which there are many that you can choose from. I am not going to go into naming forex trading companies that’s for you to find out that is rule number one.
Trading can be simple, fun and make you a lot or lose you a lot of money at the same time but at the end of the day it comes done to one thing “YOU”. Quick reminder I am not selling anything so you can just read on if interested.
There are a lot of people offering trade ideas for the day most of them claim to have been in the business for donkey’s years, well I haven’t but in the short space of time I have come to realise that the best strategy is one that you come up with. In my opinion the use of candle sticks time charts should be your best friend as a retail trader trends whether up or down should not make a difference to you.
I have made several mistakes in a short space of time and the biggest I think is not taking my own advice. I would at times be sure that a I will trade from short or long but then I come across some commentary which says otherwise, and what happens, I do exactly the opposite of what I set out to do.
Below I have sort of set out some daily objectives which I think everyone should come up with their own and not base it on someone else’s.
Trading Objectives
- Not to over trade to collect profit realistic to account balance
- Cut trading to not more than 3 days a week unless market conditions allow it
- Should account get to £500 in a week on current balance to stop trade and take a break for a few days.
- Should the account at any point go over £500 by close Friday difference should be withdrawn to maintain a balance of £500
- Trade in no more than 4 different pairs
- On busy information release days trade only after release
- If unsure of market direction close open trades before American Markets open especially Wall Street
- To use both 1 hour 15min and daily charts to get clear picture on trade direction
- Try as much as possible to catch entry points on the 15 minutes chart after observing market action for a while.
- Try to always trade in the direction of the market ie momentum on the day.
- Not to try to cover losses immediately after losing trade
- Not to over leverage with no justification or proper research that defines market direction
- When getting excited with a highly profitable position EXIT at acceptable position
- Use MACD, RSI, PIVOT POINT ON PRICE, and CADLE STICK to determine entry points
- If possible trades to be closed before 8pm uk time
- AVOID OVER TRADING 1 OR 2 TRADES GOOD ENOUGH IF THEY MAKE UP FOR BALANCE IN THE ACCOUNT EACH DAY whichever way it goes losses or gains.
When I set these objects here is what I posted after a week…
“Week did not work out as planned as I deviated from the strategy several times which cost a lot. Week starting 19th July 2009 new focus”.
- To identify direction on a daily basis
- To have at least 2 open positions with any pair at different entry levels first one should have a take profit not too far.
- After first target met move second one to breakeven
- Second entry should be when the first position is in negative (-) and against favoured direction.
- Do not trade if there are too many distractions i.e. your wife (lol), children, cats, dogs, etc
- Do not be afraid to take a £5 gain when you can take a £20 loss
- Should focus more on managing risk than the potential gains.
- Not to keep trades open through the night if balance and stop looses cannot handle volatility.
So after that review strategy changed but still strict as the account balance is low until the objective of £500 is met.
If I am being honest greed and selfishness is the root cause for most of the bad trades that I have made over the past months. When that trade you have just made looks very, very good it might be but hold on way to long and you will be taking a fraction of you highest profit.
My advice always do you own assessment and follow it others use different techniques and might have a different portfolio compared to yours so take their strategy only to complement yours. The most important is to never break your own rules and go over the set objective but it is in our human nature to once in a while stray.
