I’m learning Forex Trading again
Well, after making a tremendous profit with my demo trading account on eToro, I’m finally back into learning how to trade the Forex market. Seriously, those 600 virtual Dollars I made while demo trading where due to the fact that I took such a big risk…a risk a normal/pro trader never ever would take.
Today I learned some good lessons on risk and money management, which is probably the most important part in Forex trading. E.g. I learned not to risk more than 5% of your trading account on a single trade, usually professional traders take less than 3% per trade. I also realised that a high leverage, like I used on my ultra-profit demo trade, is the worst thing you could potentially use while trading your positions (I used a 400:1 leverage). You could destroy your whole account within a single trade.
You may ask why I tell you all that? Well, I just want to point out that I’m still busy and won’t maintain my blog as regulary as I should . Right now I’m back in learning everything about the Forex, different strategies, technical and fundamental analysis and many more things. I do this because I think the Forex market is such a great money making opportunity that it’s well worth the time invested in learning it.
If you want to find out more about the Forex, I highly suggest to visit Babypips, Forex Strategies Revealed and Oanda as a really nice trading platform (which is even registered and therefore much more secure than eToro for example).
Have a nice day,
Querblogger
The right way to invest in the market is forex.Make money trading currency by online trading.And need a good guide and support to invest in forex like this site.And more informations are provided in a simple way in our site.
Comment by johnbrickson — November 14, 2008 @ 2:35 am
Forex trading..I am afraid of this kind of business.
Comment by Lhurey — November 15, 2008 @ 3:45 am
I’ve been looking into Fx for about three years now, and the only money I’ve made was demo money.
But still, better than nothing. If you want to seriously start trading I suggest you pick up some quality reading material rather than spend time chasing “holy grails”.
Babypips is a good learning source, but as soon as you know the basics you should start reading some well known authors. For instance I’ve read Elder’s “Come into my trading room” and started reading “Trading for a living”. Even though he mostly describes trading stocks and such, his methods seem to work for me. I’ve been using Triple Screen combined with elder-ray and impulse indicators for a couple of months now and I made more pips than with any other system. That’s proof that old methods and ideas never really become outdated in the markets.
Good luck to you!
Comment by Cristi — November 21, 2008 @ 1:12 am
Hi Christi,
thanks for your suggestions. I know that there isn’t something like the “holy grail”, neither in the FX nor in any other business. But I’m willing to learn as much as I can about how the FX works, different strategies, money management or trading psychology. I estimate that I have to spend more than a year before I’ll able to start trading with real money. And even then I’ll only start trading with money that I can afford to lose.
I’m currently reading “Methods of a Wall Street Master” by Victor Sperandeo. Although it’s not up to date and also mainly focused on stocks, it’s still a great read and I think his methods and views on the market could be easily adapted to the today’s markets too. I’ll also take a look at A. Elder’s books since I’ve already heard they offer quite some excellent material.
Thank you very much Christi.
See you and good luck to you too!
Querblogger
PS: Why don’t you start trading with real money? I mean, 3 years of demo trading should have given you enough knowledge, especially when you already have a profitable strategy at hand, or am I wrong?
Comment by Querblogger — November 21, 2008 @ 8:25 pm
Hey Querblogger,
Well let’s see. Yes I’ve been studying forex for about three years, and the reason I haven’t traded real money yet is because I didn’t have any. When I first heard about Fx I was 17. I was still in high school. Back then I was thinking that in 6 months max I would find a good system, get a part time job and save up enough to start a micro account somehwere. Now I look back and realise how lucky I was. Most people wash out the first time they try forex, because once they loose money, they’re scared and turn away. For me, the lack of capital was actually good fortune. No money to loose at first meant nothing to scare me, so that kept my interest in currency trading.
I tried an experiment two weeks ago, I opened a live account at a broker which accepts alertpay, and funded it with 10$. The mimimum trading volume was 0.01 micro lots, that’s 1$. So 10$ of my equity. I then proceeded to trade that capital using my current trading system only applied to intra day charts. I normally trade daily and weekly charts. I was lucky enough to double the 10 bucks my first week, and last week I lost most of my profit. Right now I have 11$ and some change left. Ok, no big deal, I didn’t loose my initial investment right? Wrong. What if the bad week came before the good week? Risking 10% of my equity would have left me with squat.
My first instinct was to add more cash to that account, and get revenge on the market somehow. But then I realised that wasn’t going to work. I decided to stick to my demo account untill I save up enough. When I’ll be able to practice safe money management, which to me means no more than 2% of my equity on any given trade, and no more than 6% on all open positions, I won’t trade live.
As for my trading strategy, of course it’s profitable. From my experience I can tell you than more than half of the strategies I tested were profitable. It’s the human factor that makes them unprofitable. I used the exact entry signals and method on my little live account, but as soon as I bent the rules a little, (trading with a 10% equity risk, trading intra-day with a system mainly meant for swing trading, holding on to positions during volatile times and major news events, and I can go on here
…) my equity went under. Right now I barely have 2 months trading with Elder’s methods, and that’s actually the longest time I’ve spent with one strategy. But until I get at least 6 months of equity growth I won’t start trading live.
I plan on sticking to this strategy. If by chance I survive one market cycle (that’s ~ 4 years, just after I finnish college) I’m hoping I’ll be able to quit my day job :).
Comment by Cristi — November 22, 2008 @ 12:39 am
Hi Querblogger,
thank you for documenting your learning curve here on this site, very educational. Personally I went through much of the same. Apparently this is true for all traders to some extend, at least for those that stick around and are still in the game after a couple of years…
Good luck to you, may your drawdawns be minimal…
cheers
Currency Trader
Comment by Currency Trader — December 2, 2008 @ 3:04 pm