Zen Trading - $30 to $50,000 by 1 August 2010

Entry at 129.495

6 pips loss. Ranging too much. Not a good trade. Will wait for market to have more volume.

Resistance area
Sold @ 129.798

Closed for 7.2pips loss. Will try again!

Looking to close the trade before news

Stopped out at breakeven

7 trades. 3 pips profit.
Tomorrow will be better.

It looks like you hope to make about 30% return per week, not counting any deposits you make. I'm afraid you are setting yourself up to fail, and I want to discourage you from going any further with this.

You have several things working against you.

1. Your account. 10 cent pips on a $30 account is deadly. You will lose, in fact you have already lost if this is money that you deposited. You need at least $1000 for an account this size.

2. Your attitude. It's easy to think positively with $30. It's not as easy with $30,000. I don't think you are taking your trades seriously enough to handle a large account.

3. Your expectations. You can make 30% in a week. I'm up almost 40% over the past two weeks. But you can't do that week after week - you'll be overleveraged most of the time and the Black Swan will eat you.

My suggestions is to deposit your $30 with Oanda and start over. Oanda will let you trade single units of currency, so you can trade as little as $1 per trade. Now, instead of trading technical noise, you can look at daily/weekly/monthly chart patterns, read the fundamentals, and make smart trades.

I don't doubt that you can read your technical indicators, but they really don't mean much at the five minute level.

Best of luck, and if you don't take my previous advice, then at least do this: do not deposit anymore money until you are making consistent wins for a few months and have at least doubled your money.

Thanks for your advice. I used to be a scalper (1 tick charts) for close to 1 year with no success, and that is why I choose to move on to higher time frames. Today, having to hold trades for more than 10 pips profit is already a challenge for me. What I used to do was to watch the price and close once the price goes against me. I know that this is a very inconsistent way of exit, which resulted in me having losses bigger than my wins.

Trading at 10cents/pip with a $30 account would mean that I need around 300pips loss to blow up the account. And setting the max loss to be around 10 pips, I will need 30 consecutive losing trades to blow up the account. If that really happens, I will really re look into how I am looking at the charts.

I will definitely take your advice and not deposit any funds until I make some consistent money, and at least double or triple my current account.

I used to be a pure technical analyst as I was looking at far too many currencies. Since I am purely trading EuroJpy now, I will heed your advice and study the longer term charts, as well as the fundamentals. I will attempt to make myself an expert in this pair. However, trading off such high time frames is something that I don't see myself doing in the near future. I believe that a longer term bias will help me in my trades, but I still prefer intraday trading as of now.

Maybe one day I will see the light and go for longer term trades. I know that people say that profitable trading is meant to be boring. However, to me, I will not want to wait for days or weeks for one signal, place a trade and do nothing. I know that intra day suits me as of now. The future is uncertain though

Alright buddy. I wish you the best of luck. I've tried scalping but it was too much excitement for me. There was no way to really be sure that I was on the right side of a trade.

If you're going to continue with this plan, I suggest looking into range trading systems. Most currencies will fall in a range pattern 70% of the time so once you identify the high and low of the range, you get a good idea of where to enter and can get multiple entries in a day.

I prefer to trade breakouts and so I line up bunch of orders on either side of a range. Once it breaks, it picks up my trades and I stay in until I get scared.

3 pips - thats a 1% return!! If you did this every day with compounding you would double your account every 3 months and achieve about 780% return annually! that is huge!! - The best funds were doing around 50% per annum in the raging bull market prior to the 2007 black swan. There is nothing wrong with the way you trade but your expectations are ridiculous. Your risk is too high and will wipe you out before your technique is given the chance it deserves. That would be a shame, you could be good taking your signals at S/R like you do but no one is that good. I dont expect you to listen to us now (DrZeus made the same point) , but you may find this information regarding risk worth looking into soon enough. Other than this I commend you on your approach

My friend that is still scalping. Anything that limits your losses to noise and only aims at small gains is scalping. If you are looking to achieve high daily % growth then the only way you can do so is:

1) Risk and leverage your trades to maximise reward on small developments
2) Take more trades daily
3) Leave the winning trade based on such a small SL to grow, which would be the best way IMO. The benefit of trading a small SL is that you can take larger gains if you can stomache it.

So 1 and 2 are not a long term viable option because the risk involved would wipe you out with little effort, besides your 10 pip SL hasnt included spread so unless you are trading E/U or U/J which at most times gives you around 1.5 spread or better then you are really just part of market fluctuations.

3 provided you take a good look at daily and weekly charts to give you some bias, look for hints with previous Price Action and where the market is as a whole (close to S/R, playing middle ground, has it ranged for X days etc) will give you the best chance at maximising returns. It will give you an opportunity to take a small SL and build a winning trade out of the longer term aspects of the market.

So for example if we were coming up to some major daily or weekly support, be it horizontal support or a trendline or both, then you could position yourself to get a trade that may net you 50-100 pips or more. This even at 1% risk will give you between 5-10% reward and that is just the tip of the iceberg, in reality the trade could go on further and before you know it you have your 50% gain (500 pip move), which could take days or weeks. This is the safest way and IMO going to be about the only way you will be able to drag this account to higher ground without going BOOM because of 1 and 2.

I will say best of luck. The initial goal is impossible, even over a scope of 5-10 years, your $30 is just to small. Your best investment at this point would be to get a program like Forex Tester 2 and do you own testing over a scope of 10 years to see how long it will take. The backtesting will give you the advantage of being able to test in a strong bull market.

Razor

Excellent point, Razor. I used a similar method to earn over 60% in December on EURUSD. Since I wasn't sure if price action would break through the trendline or bounce away, I set up a series of low leverage trades going both directions from the line.

I was able to catch the break down at around Dec 4 and hold that until last week. My final leverage was 28:1, but each of the trades was only 1:1 so I didn't have to worry about losing my account.

Thx for all the good advice! Ill definitely take them into consideration... maybe start off with demo first again while getting enough funds to start trading live. I think the key right now is to settle on a trading method. Being used to scalping, looking at candlesticks feels really different for me. I might end up using candlesticks as a guide mainly for my 1 tick chart entries. Since I have no proper system to follow as of now... this will be more of a journal for me to do my research!

Inclined towards trading pure price action on a 1 tick chart. This is something I want to master. I know that it have been done before. People with experience with trading such short time frame, do guide me along!

Might post some charts soon.

Good Luck.

I trade daily candlestick with a monthly perspective using pure price action. Trades are opened for an average of 3-10 days- Position trading to grab large pips.

Did you finally get your target of 50000 by August or not?

Do you really have to ask? He stopped posting 2 days after he started. He probably blew up his account many times over trying to use too much leverage to get unrealistic returns.

Agree with you. From all I have learned from atleast a year of Demo trading (and for the change now I am on Live account) is that all story stays within the paranthesis of only and only money management. We might get better at picking the trades but market very easily humbles the one who overleverage

You guys are right. I didn't even have enough discipline to stick to updating my journal for a week. However, I have been doing offline journaling for some time. Once I feel that I am able to contribute to the community in some way, I'll start posting again.

keep working on Anti. I know some real traders who had great success with your similar way, only price action scalping. just such kind of art trading need take time to master. but once u get it, it will be ur holy gray system...