Crazy Doc Trading Journal

I am starting this journal which I am sure will get people telling me I am a fool for the risk I am taking in forex. But here goes anyway . Please also don't take anything I right as bragging....I wish to set a foundation for this journal and discussion.

I have always invested appropriate to where I am in life. In other words, if I have many earning years to go I am more agressive - as I get older I start shifting to a more conservative stance. Makes sense right?

But here I am in forex trading in my mid 30s. My overall portfolio exists of stocks, options, mutual funds, real estate and commodities.

My plan with forex is to have enter it as part of my high risk portion of my portfolio. To this end, I will use higher leverage to work towards high growth. Nothing ventured, Nothing gained. Of my overall portfolio, the risk actually ends up at 1%. But trades within Forex account are more at 15-20%.

Hope you enjoy my journal....and follow me on this journey.

Dr Z

Starting account balance is 5,100.

I entered the following trade via a buy stop limit.

Long GBP/USD at 1.9720. with 3 standard lots. I have also moved my stop to Break Even.

DZ

Here are the first 5 target levels. Notice they are not trades. This is because nobody can dictate how much the market will give on each trade. These levels are to give me a mental track of where I am.

After hitting level 10 I will start explaining my trades and how I pick them.

Trade closed at 9807 with +261 pips. (3 lots at 87pips)
New balance 7769.64.

This trade cleared Levels 1, 2.

Dr Z

I entered the following trade via a sell stop limit.

Short GBP/USD at 1.9900. with 3 standard lots.

DZ

I do something very similar Doc, use higher than the recommended leverage, based on my appetite for risk, my stage in life, and my win/loss ratio. Good on ya! I look forward to reading your progress.

Thanks for your post. 1st one to post and not call me nuts.. 1st trade on this journal completed nicely. After 2 years of forex trading, I finally have gotten past setting $ targets. I stay in the trade until my manual trading stop is hit or it doesn't make sense to stay in the trade anymore. I will also start adding to my positions as I move stops to BE (and it still makes sense to stay in the trade).

We will have to see how the current trade plays out. It is almost 100 pips against me at this point. The criteria for trade entry is still valid so I am holding this position.

Dr Z i like this journal
i hope i can learn from experience trader


-novice trader-

Question: What leverage are you using, and with what broker?


Suggestion: I'd consider averaging out your entries. Since your standard position is 3 lots, why not space them out, 30 or 50 pips apart. So on your last trade, you could have sold 1st lot @ 1.9900, 2nd lot @ 1.9950, 3rd lot @ 2.000 or something. Depending on how quickly the price moves against you, you can increase or decrease the distance between entries. And if the draw-down is short-lived, and you haven't gotten filled on all 3 lots, you can always add at original price once it returns there.

After all, GBP/USD is a fairly volatile pair, and anyone would be hard-pressed to catch the very top or bottom with a single entry. Most of the time, after taking a position, you'll sustain a mild or severe draw-down, and it's nice to have some ammunition left to average out. Even if you end up with 2 or 1 lots instead of 3 when you reach your profit goal, you'd be in a very good shape still, being so highly leveraged as you are.

Anyways, just a thought... GL

Thanks for the suggestions. My account balance is in the journal. and also the number of standard lots. I trade about 1 lot for every 2500 in equity. The entry is by a breakout - so I set the limit entry and if it breaks the order executes.

This rally from 9700 is looking exhausted. I will be watching closely tonight for a change in direction for cable while being cautious to any upside move. Over the last 7 months cable has moved from 1.88 to 2. about 1200 pips. Hard to claim this as a carry trade given the relatively small spread between rates of USD vs GBP. Yikes I better just get back to trend trading.....and stop clouding my head with all this analysis

Well, well, well. Looks like watching the 4hr didn't work out so well. Three problems I encountered.

1. I added to my position before being able to move my previous to break even. This essentially led to a double down situation. Basically resulting in increasing my risk exposure.

2. I did not look to higher timeframe for guidance.

3. I should have also utilized the higher timeframe for adjustment of stops. This would have kept me in the trade from 1.97ish. Current trailing stop would be at 2.0020.

None the less. I quickly wiped out most of the trading account in a very short timeframe.

Lessons - Leverage is dangerous. Adding to a position on break if already negative is a no-no. Any other lessons? I will be reviewing why during an obvious trend move I failed miserably.

Dr Z.

It has been exactly one month since my last post. I just wanted to give an update on what I have been doing. I have spent the last month researching options within the Forex market.

I utilize options extensively trading the Nasdaq and S+P. Why not with forex? See leverage is acheived through options and your risk is controlled - you can never lose more than what you paid for the call or put.

Research has been challenging in trying to find brokers that allow Options. If you know of any feel free to post here.

Within the next month I will be opening a 20K account with a Forex Option broker. My risk will be between 5-10%. This means I will be paying 1k to 2k for the call or put and I will be looking for expirations between 2weeks and 1 month. I also will not be adding to the positions. I am in no rush to make or lose money.

I have realized that if you are leveraged - often you get stopped out and then the currency moves in your direction. It also means that I am immune to stop hunting as well. I can ride out these spikes because my risk is preset and position stays open regardless if the currency goes against me.

I will be reviewing the entry and exit guidelines as my exit previously was a trailing stop....with options I will have to do this manually.

All trades will be taken on Daily Charts. The following currencies will be watched. gbpusd, eurusd, gbpjpy, eurjpy, usdchf, gbpchf.
3 gbp
3 usd
2 eur
2 chf
2 jpy
This should be well balanced.

Dr Z