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Attachments: So I doubled a DEMO, now I have half of my LIVE deposit.
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So I doubled a DEMO, now I have half of my LIVE deposit.

  • #1
  • First Post: Sep 21, 2006 5:19pm Sep 21, 2006 5:19pm
Turning a $50,000 FXCM demo into $100,000+ was a little too easy. With my per-trade risk capital starting at $1000, I had upto 100 pips to back up my decision, and back them up they did. Four days, and two economic news releases later, I was at or above 100k.

So I opened a live account. And between homework assignments, and occasionally during the time that I should have been doing homework assignments (opportunity cost, my friends), I amazingly dwindled my original investment to 50%.

Now, let's just say I have $500 left in the account. Taking 2% of that 500 would give me, hmm, $10. Minus $5 for spread, minus $5 for the minimum stop possible.. let's see, that leaves me with, well, an impossible situation.

Should I:

A) Find a way to deposit additional funds?

B) Pray that I can find a sweet trade that only technically requires a 5 pip stop? (And repeat many times.)

C) (See what the james16 pf has to offer?)

D) Withdrawl my funds from FXCM and open a Micro account somewhere?

E) Read, read, read. Demo, demo, demo. Pray, pray, pray? Repeat.

F) Watch the eco releases and ride a breakout or two to breakeven? (why stop there?)

Is there a way out?
  • #2
  • Sep 21, 2006 5:39pm Sep 21, 2006 5:39pm
D) Micro account.

Jim
Indicators show the past. Price Action "Indicates" the future.
  • #3
  • Sep 21, 2006 5:41pm Sep 21, 2006 5:41pm
start by reading this post
http://www.forexfactory.com/forexfor...622#post103622
In trading, there is no bullshit. You either make money or you don't.
  • #4
  • Sep 21, 2006 6:04pm Sep 21, 2006 6:04pm
D) Open a micro account somewhere else. You know how AOL was like the internet with training wheels back in the day? Well, FXCM is forex with training wheels. I'm not bashing them either, I had an account with them and never ever had a major problem, but when I got serious, it was time to move on.
  • #5
  • Sep 21, 2006 6:10pm Sep 21, 2006 6:10pm
50,000$ to 100,000 in 4 days?
  • #6
  • Sep 21, 2006 6:33pm Sep 21, 2006 6:33pm
I'm sorry, did I say $50,000? I meant $41,467.18 to $107,453.88.

Now, don't everyone rush at once to the conclusion that the few ammount of trades that were made indicate a wholly unprofessional gain on my account. Because you might be wrong. I don't know.

These gains, did however, as I have implied, give me a false sense. As I am now searching for the best solution for reversing the damage I have now done with live funds. Despair? Yes. Fear? Yes. Depleted self-worth and so on? Yep! Regret? ..not really.


Mr. Green. Thank You. I've read the post and it was very informative.

Although I prefer to not be marginalized. And it should be said that I have been trading ONE currency, with one system, and one lot, etc.

The problem now is, where to go from here? Self evalutation? Will this turn my hypothetical $500 into $520? Meditate on this, I will.
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  • #7
  • Sep 21, 2006 6:44pm Sep 21, 2006 6:44pm
Study James16 chart thread, study some of the strats on this site, apply money managment and when you do find a strat or system that fits you, follow the rules of the system.
  • #8
  • Sep 21, 2006 6:52pm Sep 21, 2006 6:52pm
Dude,
Stop or cloes the mini account mate.

The first step for you there is to get a micro or smaller account. Really! You've already said it your self...

"Now, let's just say I have $500 left in the account. Taking 2% of that 500 would give me, hmm, $10. Minus $5 for spread, minus $5 for the minimum stop possible.. let's see, that leaves me with, well, an impossible situation."

...It's an impossible situation. You're trading at about $1 per pip. If you were to open a micro you would be trading at about 10c per pip.

If you were to open an account with a broker that had an even lower 1c per pip available you'd be sweet. That would be like trading $1 a pip with a $50,000 account. The same situation you were in on demo!!

That said, you may also have had a good run the first time, but at least this way you aren't risking a college fund ammount or similar.
Bundy's status today: "Waiting..."
  • #9
  • Sep 21, 2006 7:28pm Sep 21, 2006 7:28pm
It appears by the statement you posted that you doubled the demo account in around 10 trades. With this information you should have never gone live in the first place. Any system where you are going to double your account in a few trades, you should also be willing to lose the same. If I were you I would stop trading, backtest your system for a minimum of 300 trades (which is 30 times what your demo record shows), and you can procede with live trading when your money management system from your backtesting says it is safe. Sorry if I sound rude, I don't mean to.
  • #10
  • Sep 21, 2006 7:46pm Sep 21, 2006 7:46pm
Twinchell's right on it.
...and yourself. LOL

"E) Read, read, read. Demo, demo, demo. Pray, pray, pray? Repeat."

After re-reading your post , 2 trades to get from $50,000 to $100,000!

Nothings that easy! You really did just luck it man. You may have used your intelligence to increase the odds, as you should, but if you'd had kept going on that demo for 6 months you'd have started your tenth demo account by now. :

Don't give up though. There is so much free information on this site you'll get there if you have the patience.
Bundy's status today: "Waiting..."
  • #11
  • Sep 21, 2006 8:40pm Sep 21, 2006 8:40pm
OK, well although I had a disclaimer for Twinchell's statement..

Quote
Now, don't everyone rush at once to the conclusion that the few ammount of trades that were made indicate a wholly unprofessional gain on my account. Because you might be wrong. I don't know.

That is unimportant because he is absolutley correct.

Bundy too. So I'm going to either Demo a couple 50k FXCM acnts or Demo a few $500 interbank micro accounts. Both of which will mimic my current situation.

The reason I would temporarily stick with FXCM is that my charting software recieves an FXCM datafeed. However, trading live with FXCM is no longer an option.

I've read on the interbank site you can specify the ammount of the demo, which IMO would act as psychological reinforcment. Either way, It is highly unlikely that I recover my hypothetical $500 with my remaning mini funds. So a mico is the way to go. Thanks for the advice.

I stopped trading live last week after I tried to get revenge on the market. Sad times.

Why most brokers offer and advertise 'open an account for $300', I don't know. Sounds scammy.

On a side note, my university has just opened the brand new "trading lab" which includes about 6 large plasma screens all streaming news, 2 stock/FX tickers, and about 30 top of the line dell's each with dual flat-pannels attached to pivoting arms! SUHWEET!

And you must be a finance major to enter the room, so it keeps the kiddies out.
  • #12
  • Sep 21, 2006 8:47pm Sep 21, 2006 8:47pm
Quoting 4X=0
Why most brokers offer and advertise 'open an account for $300', I don't know. Sounds scammy.
Yeah, I suppose once one did it, the others had to to compete.
Quote
On a side note, my university has just opened the brand new "trading lab" which includes about 6 large plasma screens all streaming news, 2 stock/FX tickers, and about 30 top of the line dell's each with dual flat-pannels attached to pivoting arms! SUHWEET!

Oh yeah!! That sounds totally aawesome.

Do they give you the cash to start an account as well?
Bundy's status today: "Waiting..."
  • #13
  • Sep 21, 2006 8:55pm Sep 21, 2006 8:55pm
Quote
Yeah, I suppose once one did it, the others had to to compete.

Yah I guess it's a way to 'get them in' before they figure out $300 ain't enough. Then they go ahead and deposit the other $29,700.

Quote
Oh yeah!! That sounds totally aawesome. [img]images/smilies/cool.gif[/img]

Do they give you the cash to start an account as well? [img]images/smilies/biggrin.gif[/img]

Funny you ask, because I just filled out my application for the 'student managed investment fund' which is operating with 100k of donated capital. I don't believe they have anyone that participates in FX, but one of the key points on my resume for the application was that I can take an account from 100 to 50% in a matter of days.
  • #14
  • Sep 21, 2006 9:50pm Sep 21, 2006 9:50pm
Quoting 4X=0
...but one of the key points on my resume for the application was that I can take an account from 100 to 50% in a matter of days.


Except you know how it works? If you WANTED to take an account from 100 to %50 you'd make a profit! LOL
Bundy's status today: "Waiting..."
  • #15
  • Sep 21, 2006 10:26pm Sep 21, 2006 10:26pm
Quoting 4X=0
OK, well although I had a disclaimer for Twinchell's statement..
Backtest that system throughly, because, believe it or not, there are very profitable strategies that have serious drawdown. It sounds to me, however, that you are not trading any pure mechanical system, so drawdown, in that case, is also a function of the trader (fear, greed, emotion, blah, blah, blah). If you can make your system purely mechanical, if its not already, you're ahead of the game. Then the next step is to backtest, backtest, backtest.
  • #16
  • Sep 21, 2006 11:55pm Sep 21, 2006 11:55pm
Ahhh.. the dreaded demo account.

Demo accounts just don't teach you anything.

There are only two reasons you should ever use a demo account. They are:

1. When you are COMPLETELY new to trading, and you need to learn what this button and that button does... (that means you shouldn't be demoing anymore than a couple of weeks.)

AND

2. When you're an established trader in a live account and you need to test your system that you've already backtested...
Mr. Trend
  • #17
  • Sep 23, 2006 2:30pm Sep 23, 2006 2:30pm
I think I've found a way out of the 'impossible situation'. And it doesn't involve retreating to a Micro account.

Quote
Now, let's just say I have $500 left in the account. Taking 2% of that 500 would give me, hmm, $10. Minus $5 for spread, minus $5 for the minimum stop possible.. let's see, that leaves me with, well, an impossible situation.

Would you like to know my work-around, My path out of drawdown hell? Yes, it involves the James16 chart thread. (I'll be walking to the library to print it out in its entirety as soon as I finish breakfast at this here cafe.) And it also involves Mr. Trend's -ever valuable- #2 reason that anybody should ever use a demo account. So here it goes:


----

First of all, trading a pair with a 5 pip spread was not helping. With a 5p spread and 5p minimum stop, my risk capital has to be at or above 10. Which means I could currently lose no more than 4 trades. So to give me some more room to breathe, I'm swiching to EURUSD which has a 3p spread. This will be a major factor in the success of my recovery. Now I can continue trading until my Risk Capital reaches 7, which affords me 16 straight loses beofre I'm under that 7. So far I've quadrupled my chances.

Next, I need to take full advantage of the information offered in the J16 chart thread. This is when 'read, read and read' will take place.

Then, I will demo this system throughout the comming week, on a 15 minute chart. Yes the signals may be less reliable, but I cannot afford the stoploss on any larger time frames.

If I have success with the demo process, I think I may have a chance at beating this most unfortunate drawdown.
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  • #18
  • Sep 23, 2006 2:54pm Sep 23, 2006 2:54pm
Well, you obviously risked more than you should have, and I want to see you doing that in a live environment. Would you have the balls to risk as much ?

Plus, do you actually have $50,000 ???? 'Cause if you don't, you do realize right that your live trades will be much smaller and the profit will be peanuts compared to your demo.....

Aslo, once you are live and the money is gone....it is really gone my friend, gone for good. If your frist two live trades are losses, you will trade the next trades with fear and chances are, you'll end up loosing again.

Then what ?

You get my point ?

Look at demos in this way: the more I loose in a demo, the longer it will take before I can go live. In other words, the longer it will take to make real money.

If you see it in this way, you will threat a demo account with the same fear, or even better, respect, of a live account, because you ARE actually losing money....not the ones you have now, but the ones you are missing out because you gotta wait more to go live....


Good luck

Future
"Lunch ? Lunch Is For Wimps !"
  • #19
  • Sep 23, 2006 4:05pm Sep 23, 2006 4:05pm
Quoting 4X=0
Then, I will demo this system throughout the comming week, on a 15 minute chart. Yes the signals may be less reliable, but I cannot afford the stoploss on any larger time frames.
This is the only thing I see wrong with plan B. It seems as though you are forcing yourself to use a lower time frame because of your lack of position sizing that your current account offers. If you think trading a HTF (higher time frame) will give you better odds, which most will say so, I still think you should consider a micro account. You can then continue with plan B, but trading a HTF might make it a better plan B.
  • #20
  • Sep 23, 2006 8:23pm Sep 23, 2006 8:23pm
Man I know how you feel, I love the Demo accounts. The first ones I tried were $50,000. Some I won, many I lost (many more).

Then I realized that I would never open an account like that given my current situation. I set out in my MM that I would only use $500. I would use micro and mini accounts like they were $50,000, because they are if you scale the accounts.

I also said that I would only work with one account, It was all the money I had. It is doing well. I am risking a bit much right now, but I am learning how different lot sizes work to build the account steadily. I have tested several manual methods and read more than I thought I ever would for this. I have GB of PDF's and e-books. I have Binders of material. My Wife thinks I am a bit crazy.

I have been thinking about going live, but I will wait for a bit. I need more of a steady hand at the helm.

I would say E) and D) are great options now, as well as C).

Good luck,
Labrat407
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