EG $500 to $5K Trading Journal

Hello everyone!

My name is EG and I have been trading Forex since 2009. A little bit of background about me: I lost (3) $25k accounts from 2009 to 2014. It wasn't until 2015 when I started to break even and eventually started making profits. Trading is one of my sources of income along with Real Estate and microlending.

The reason why I lost so much money for 5 straight years was because I was quick to jump from one strategy and time frame to the other. I just woke up one day and came into the realization that all strategies and time frames I traded were profitable, it's just that I never gave them a chance to work because I was so quick to move on to the next promising strategy.

Anyway, since we are on quarantine (been on lockdown since mid-March and has been extended until May 15th, but highly likely that it will be extended again), I decided to open a small $500 account, pick one random strategy, and journal my way through.

I will also be creating Youtube videos to journal my trades.

Please follow my journey. Sit back, relax, and enjoy the ride!

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Swing Trading: Positions are held from 2 days to 30 days
Charts: 4 Hour - 3 Line Break Charts (Tradingview.com / Investing.com)
Indicators: 34 EMA Wave, 5/9 EMA Cross
Markets: Forex, Futures, Equities

1. BUY
a. Price must be above the 34 EMA Wave
b. 5 EMA is above the 9 EMA
c. Price must be 3 pips higher than the close of the previous bar
d. Wait after the close of the bar before opening a new position.

2. SELL
a. Vice Versa
** Only trade if moving in the same direction as the Daily.
** Use 15 Minute chart for entries.

3. EXITS
a. SL is hit
b. The system says to open the opposite trade
c. Price closes below 9 EMA when long; price closes above 9 EMA when short

4. MONEY MANAGEMENT
a. Risk 1.5% of account on every trade
b. Stop Loss (SL): Major Pairs -40 pips; Minor Pairs -55 pips
** Move the stop loss to Breakeven (BE) +3 when price has moved +50 in the direction of the trade

***UPDATED MAY 4TH, 2020***
b. Stop Loss (SL): Major Pairs -25 pips; Minor Pairs -35 pips

c. Trailing Stops
** Move trailing stops +50 after every 50 pips
+50 pips = BE +3 pips
+100 pips = +53 pips
+150 pips = +103 pips
+200 pips = +153 pips
+250 pips = +203 pips

5. POSITION SIZING
$250 = .1 lot
$500 = .2 lots
$750 = .3 lots
$1000 = .4 lots
$1250 = .5 lots
$1500 = .6 lots
~
$2500 = 1 lot
** Increase/decrease lot size according to current account size.

Swing Trading: Positions are held from 2 days to 30 days
Charts: 4 Hour - 3 Line Break Charts (Tradingview.com / Investing.com)
Indicators: 34 EMA Wave, 5/9 EMA Cross
Markets: Forex, Futures, Equities

1. BUY
a. Price must be above the 34 EMA Wave
b. 5 EMA is above the 9 EMA
c. Price must be 3 pips higher than the close of the previous bar
d. Wait after the close of the bar before opening a new position.

2. SELL
a. Vice Versa
** Only trade if moving in the same direction as the Daily.
** Use 15 Minute chart for entries.

3. EXITS
a. SL is hit
b. The system says to open the opposite trade
c. Price closes below 9 EMA when long; price closes above 9 EMA when short

4. MONEY MANAGEMENT
a. Risk 1.5% of account on every trade
b. Stop Loss (SL): Major Pairs -40 pips; Minor Pairs -55 pips
** Move the stop loss to Breakeven (BE) +3 when price has moved +50 in the direction of the trade
c. Trailing Stops
** Move trailing stops +50 after every 50 pips
+50 pips = BE +3 pips
+100 pips = +53 pips
+150 pips = +103 pips
+200 pips = +153 pips
+250 pips = +203 pips

5. POSITION SIZING
$250 = .1 lot
$500 = .2 lot
$750 = .3 lots
$1000 = .4 lots
$1250 = .5 lots
$1500 = .6 lots
~
$2500 = 1 lot
** Increase/decrease lot size according to current account size.

Congrats for your thred-journal, what was your exit reason!?

Bought (.2 lots) EURAUD @ 1.7042
SL = -55 pips
EDIT: SL adjusted to BE +3. FREE TRADE (May 1st, 11:45 PM)

Current account balance: $526.83

PS. If you notice the red vertical line, I like to separate the months (March 31 & April 1) so I can focus on the current months chart.

For exits, I rarely use b. and c. Most of the time my trade gets closed if it hits SL or trailing stops. It's no fun to close a premature trade just to see it go in your favor as soon as you closed it.

I also don't set targets. I just let the price run to however high or low it can go and protect my profits with trailing stops.

It also helps to avoid watching the charts too much.

I only watch and move my stops on the following hours (Philippine time/GMT +8):
6 AM, 10 AM, 2 PM, 6 PM, and sometimes 10 PM if I'm still awake. Keeping yourself busy in between those hours helps a lot.

I received a couple of messages on how it is possible to risk 1.5% of account if I trade .2 lots with -55 pips.

As per FXCM,
For US pairs, .1 lot = 10 cents per pip
For minor pairs, .1 lot = 6 to 9 cents per pip depending on the pair
e.g (For EURAUD, .1 lot = 6 cents per pip)

...so with that having said, my stop loss for minor pairs is larger than USD pairs (USD pairs are also less volatile).

Really Great Piece on parallels of professional poker players and traders (money managers, fund managers, personal wealth managers et al). One of my friends and broker sent me this way back November 2012 and it's still very true to this day.

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I have played poker on the professional level for the past 7 years as my only source of income. In that time I have ridden extravagant highs and abysmal lows, financially, emotionally. I have gotten to live through a vast range of unique life experiences, fun times, odd situations. Playing poker for a living is a roller coaster for sure. There is no set wage. The level of difficulty of the game itself can run the gamut from seemingly impossible to Midas touch. You can make a year's worth of rent in a few hours, or you can go months of full-time play and break even, or even lose.

When I began, I never expected to make a livelihood out of it. For me, it was a challenging game with an intriguing strategy behind it, and I enjoyed the competitiveness and the creativity required to play well, just like Scrabble or chess or a reasonably fun video game. Back then, that's all it was: just simply a game. Eventually, after losing small sums here and there, I eventually started making a concerted effort to learn from my mistakes (going to Borders and reading poker strategy books, watching poker on ESPN, looking at hands I played and really trying to figure out how/why/where I was fucking up). After several $100 deposits into online poker with my debit card, and many sleepless nights just encapsulated with the game and playing for hours on end, I found myself suddenly doing well. It felt like when you string together a few sessions at the driving range and your swing starts shaping back up. Of course, this was after countless days failing miserably on the virtual felt, with no clue what I was doing wrong or how I should be playing differently.

Eventually I started winning, and so with the boost in confidence and a curiosity in how far I could progress, I dedicated more hours and energy to improving and moving up in stakes. When I was 19, I approached a six-figure annual salary playing less than full-time hours per week. At that point I was juggling university life with what was transforming into a full-fledged career. When my higher education was complete, I had to decide between taking an entry-level job, at a severe pay cut, or continue forth with the poker venture. I decided that the opportunity was too unique and invigorating to pass up and that I wanted to ride it out as long as I felt competitive and enjoyed the game. It was really fascinating, and a $40k/year job in a cubicle didn't seem very appealing when I was making several hundred dollars an hour playing online poker in my pajamas from home in between rounds of golf, episodes of Entourage on Netflix, and happy hours with pals. For the most part I focused on cash games, as they are a more consistent influx of winnings than are tournaments, which are volatile in results and are laden with variance. I focused on cash games for many years, playing when I felt like it, and not playing when I didn't feel like it.

This was one of the most amazing benefits of playing poker professionally, no set hours. Some days I would wake up and want to play all day, and so I did. Other times, I would go a week without wanting to get dealt even one hand. Similarly, I could play for a few hours, go to the gym or grab a bite or hang out with some friends, then play again with later down time. Also, when on a downswing, I could take a few days off and purposely not think about poker at all, so that I could come back refreshed and play a better game upon my return. And of course I could craft my personal schedule however I deemed necessary.

I personally began using this flexibility to start traveling, since I could play online poker from anywhere with internet. I started following live poker tournament stops throughout the world, places such as Auckland, Melbourne, Las Vegas, Vancouver, and many other cities. As my income rose, so too did my expenditures across the board. I updated my wardrobe. I traveled to more places (three-dozen countries in three years). I bought a car and paid it off. I treated my friends well and ate at nice places. Sometimes, poker winnings didn't always feel 'earned' (even though I was cognizant of the work I had put in to become a world-class player and knew the earnings to be in fact earned) and so spending was easier because it didn't feel like parting away with hard-earned money at times.

Most poker players are quick to accentuate or focus on their wins but rarely talk about their losses. Even when I was at the peak of my career, playing my absolute best, putting the most time and focus into it, playing the highest stakes, I still had many horrendous downswings. I had countless break-even months. I would win $40k in a week and then drop it the next week. My worst session was six hours and I dropped $25k. I remember it to this day. I went to grab sushi with a friend that night and she lamented that the bill was $40. I abstained from describing the poker doom session I had endured earlier that afternoon.

Times like those can be very testing. Most people can only relate to what it feels like to lose ten bucks on a hand of blackjack. But it's not just the money factor, although it is a big one. It's just simply the constant scrutiny and constant setbacks. Most people's jobs don't involve constant failure where you just get kicked to the curb over and over, but if you are to accept the long-run nature of poker statistics, you are going to lose all the time if you play a lot. And all I can say is there is no other feeling than to play poker as your job and lose an exorbitant sum here and there or suffer prolonged downswings. You feel like a piece of shit. You question your skills and merit. You start to question everything. It is very disheartening and discouraging and you start to think about all the things you could have bought for yourself or others with the money you just lost playing a game of cards. Mostly, you actually occasionally envy the people who can just clock in and clock out of work and take on no responsibility and suffer no duress and receive the same paycheck each week.

(This paragraph rings very true to me --- People think trading is easy... but if you suffer prolonged drawdowns -- You will really feel like a piece of sh*t and question all your skills and merit. You will even think why you chose this profession in the first place. - Nikki )

Of course, that is the inherent trap, because this is absolutely the wrong way to approach the game mentally. And so people who cannot harness their emotions usually end up having a tough time coping with the downs in poker and ultimately do fail. Poker as a profession is not for people who need constant reassurance or encouragement. You really have to be brutally honest with your performance and nobody is there to help you but yourself. You have to be very hard on yourself and you have to grow calloused to the constant cutthroat nature you voluntarily step into. Someone above mentioned an estimate that 80% lose in the long run in poker, but I think, and have heard, a more accurate statistical guess that only 5% win at poker in the long-run, and out of those, only 5% of them can live off their winnings. Moral of the story is that very, very, very, VERY few people have shown the ability to beat poker over a large sample size. It takes exorbitant mental determination to persist through the trials and tribulations and taxing nature of poker.

At its best though, poker as a profession is unbeatable. There is no better profession in terms of the capacity to bolster your quality of living with the least sacrifice or downside. Literally unbeatable, aside from inheriting a fortune or something, and even then there is the argument that poker is better because you are feeling competitive and can focus on something. Many poker players are jaded and unhappy individuals, but many too are not. Using your life situation (of which income and time are variables, but not the entire equation) is a skill entirely separate from card playing. If you are good, though, there are endless seas of money just waiting to be had. You can make a LOT of money playing poker, but yet have the time and capability to do unique things with your life. You have to realize that most people in this world are condemned to pretty mundane lives. Countless millions of people will have to work retail, customer service, things like that for meager salaries for their entire lives with two weeks off a year, and even those individuals are luckier than a proverbial infinite amount of others. Poker is not a cake walk and it's not a dream life devoid of any concerns, but it can catalyze at a reasonable frequency a life that most people can only dream of (me included when I began).

The flexibility is the best part. You can be wherever you want for the most part. You can make time for your friends and family. You can sleep in. You can craft your schedule around your hobbies and outside interests. You can travel and take vacations whenever you want. These things are HUGE in the grand scheme of life and happiness, and are things that most people in the workforce can only wonder about as some lofty conjured pipe dream that is unattainable. At its best, poker as a career didn't always feel like real life. It felt unfair, like some cosmic loophole that nobody else was seeing. I once made $109k in one day, when I was 21 years old. Some people never make half that in a year. And what did I do to deserve that? Just some study here and there in a pedestrian game of cards. My previous job before poker was at Baskin Robbins where I made $6.75+tips/hour. Suddenly I found myself jetting all over the world for tournaments, meeting interesting people, staying at nice hotels, eating at nice places, wearing nice clothes, and more importantly being able to pursue my hobbies and interests on the side, such as blogging, acting school, and various sports.

The only downside to poker is a lack of fulfillment when it comes to feeling constructive and productive. Anybody who can battle the competitive arena of poker and come out ahead has to have some inherent creativity, creative energy, or just mental wherewithal in general and there has to be something or some way in this world for that to be channeled for something bigger and greater than being good at a game. This last reason/caveat is precisely the reason that my poker career is now over and I am looking on to the next chapter of life. But, when it lasted, and at its highs, poker taught me a ton of life skills, things I will keep with me forever. It forced me to grow up at a young age and be involved with stressful, marginal decisions involving a lot of money against opponents who would leave me for dead if it was their choice. I am more attuned to social cues and ebbs and flows due to poker. I am more analytical and methodical when making decisions due to poker. Poker as a job was stressful but it prepared me to move forth, and while it lasted, allowed me to fashion an extravagant and unique start to my adult life and have an exorbitant, unbelievable amount of fun.

Bought (.2 lots) GBPAUD @ 1.9525
SL = -55 pips

Running Trades
EURAUD
SL = BE +103 (May 4th, 8:00 AM PH time)

Lots of great opportunities with the AUD and NZD crosses, but be careful not to get overexposed.

Both trades have been closed.

EURAUD = +103 pips
GBPAUD = -55 pips

I've been thinking since I only have a $500 capital, I will be tightening my SL.

Major pairs = 25 pips
Minor pairs = 35 pips

Nothing will change on the strategy except for the tighter stop loss.

Sold (.2 lots) EURUSD @ 1.0834
SL = -25 pips

Current balance: $529.22

Closed @ -25 pips

Sold (.2 lots) CHFJY @ 109.43
SL = -35 pips
SL has been moved to BE +3 so free trade already.

Sold (.2 lots) EURUSD @ 108.21
SL = -25 pips
Update: SL moved to BE +3
Closed: SL hit at BE +3

Sold (.2 lots) GBPAUD @ 1.9256
SL = -35 pips
Update: SL moved to BE +3. Free trade!
Closed: SL hit at BE +3

The main objective of this strategy is to try to catch the big moves, while keeping losses at a minimum, hence the ~1% stop loss for each trade.

Let's say for example we are trading the EURAUD pair. I would get in 5 times with a 35 pip stop loss every time and lose on every single trade.

35 pips x 5 = 175 pips
175 pips x $.13 (.2 lots // .1 lot = $.06 for FXCM) = $22.75 loss
$22.75 / $500 = 4.5% of total capital

The point is that we can hit a 35 pip stop loss 5 times and be only 175 pips in red. If we are using a proper position sizing, a 175 pip could only be 4.5% of the total $500 capital (which would not be a very significant loss).

On the flip side, we can hit one or two winning trades with thousands of pips in gains.

In the picture below, EURAUD had significant moves in March and April (which obviously doesn't happen very often). Given that example, let's say we got in and out at the perfect time we could have made around 3252 pips.

Let's subtract our total of 175 pip loss on all 5 losing trades.

3252 winning pips - 175 losing pips = 3077 pips (net)
3077 pips x $.13 (.2 lots) = $400 gain

Let's say we only catch 30% of 3252 winning pips (which is perfectly possible), that's still 1084 pips gained. NOT BAD!

There will be a lot of small losses in this strategy given the tight stop loss, but one or two winning trades could easily offset those losses and give us some extra pips!

There are four possible outcome in every single trade: small loss, small win, big loss, and big win. In order to eliminate the big loss which could lead to a significant damage to our accounts, we must always use a stop loss. No exceptions.

Losses are part of the trading business, but we can always keep it at a minimum. Don't worry about the small consecutive losses.

What I learned over the years is that we have to be able to stay in the game for as long as we can so we can take advantage of those big home run trades whenever it presents itself.

Slow and steady wins every time!!!

Good luck on your journey , losing a 25k account 3 times sounds painful but its all about persistence !

Bought BTC (.4 lots) @ 9407
.1 lot = $.01
SL = -120 pips
CLOSED SL HIT

To the moon? I don't know but looks like it wants to go higher possibly because of the upcoming halving.