Make or Break Year for Petra!

There's nothing wrong with old and boring. Add me to the list!

Look forward to reading your report in December 2010.

seems to be an inspiring story come end-2010
I wish u the BEST!

I have not been posting much at the factory lately. Personal choice---trying to keep my head clear and focus on my little account. As I said at the beginning of this thread, I am trying for my 2nd profitable year in a row. As June comes to an end, I thought I would give a little update:

Starting Bal = $5,000

June ending Bal = $8,674.

I have made a lot fewer trades this year that I did in same time frame last year. I have made my good trades mostly on EU and UJ. Progress seems (to me at least) to be slow...but I have been in positive territory almost the entire 6 months. I don't think I will duplicate last year's results... but that is ok. I must continue to temper my expectations and take only the trades I really, really like.

Hope all is well with my Factory Friends! Good trades to you all.

Regards,

Great result --- keep up the hard work!

Well done, you are clearly on the right path. Good luck further, keep your FF friends updated

Good to hear Petra. 6 more months and you can start caning it!

Petra,

I think you have done remarkably well. The returns are well above average (forget the actual cash amount for a second).

Keep up the good work - you are there....even if you don't (yet) admit it to yourself.

All the best for the future.

regards
daytrading

good attitude!
well done, over 400% in a year!! good luck in your 8th, make or break year. Im 2 years behind you. Watch that risk and you will be fine

Hope you to success, mate. And you can come back giving us good news.

Wishing you the best, Petra.

Nice results so far.

Good luck for the rest of 2010!

Well, I guess it's time to report on my progress. As you may remember, calander year 2009 was my first straight up profitable year. I started with 5k and ended with 28k (and change). So, how about 2010?.......

Starting Balance 5k....... Ending Balance 14K (and change).

So, that makes 2 profitable years in a row. Now, what to do? I guess I should clearly state what I want out of forex. I am 3 years away from being able to take an early retirement. I will still be fairly young. I am hoping that I can use forex to supplement my retirment income. My retiment check will net me about 3k per month for life. If I could do another 3k from forex, that would take me from boring, scrape by retirement to fun, free, enjoyable retirement.

With the forex profits I have achieved along with savings, I have just over 50K that I can now commit to forex. I have 3 distinct choices:

1) Quit forex, save the 50k, and open aother business in retirement. But that's not really retirement, is it?
2) Slowly build my 50k over the next 3 years into 100K, trade forex in retirement only looking for 2-3% per month (very conservative). This would supplement my retirement well.
3) Continue very aggesive over the next 3 years, accumulate 500-600k, buy an annuity to supplement my income.... and really concentrate on sailing and golf!

So, there ly my choices. Any input you guys might have would be appreciated. I am currently flat and out of the market at this time.

Regards,

Hi Petra,
well there is always the fourth option, which I noticed you didn't mention at all. By that I mean combining the second and third option by splitting your portfolio into two accounts - an aggressive and a conservative one. If memory serves me right, then this is what Nassim Taleb talked about in one of his books (or maybe in one of the podcasts with Russ Roberts over at EconTalk). In order to achieve medium growth, you are much better off making aggressive bets and conservative bets, for example investing some of your money into bonds and some into venture capital, than for example investing it into some stocks that is doing well right now (but might crash and burn).

By dividing your portfolio into two, assuming that your fx results are not a random chance and are thus consistent and repeatable, you can earn more money than you would if you chose option 2 by virtue of allocating some of your money into a more aggresive fund while at the same time avoiding a total meltdown which could happen if you chose option 3 by virtue of having some of your money in a conservative fund.

From my personal point of view, this is what I would choose. Being too aggressive when you already have some years on your back means you can't afford big losses. However, one can't take anything for granted in terms of how much money you need to survive in the future so it's always best to be prepared. Resource scarcity is an issue and it doesn't take a genius to see that this will have an effect on prices, and I'm not just talking about oil here. Inflation is another worry. I'm not an inflationista, nor a deflationista, I simply don't know what the future holds. But it's still good to be prepared. I hope this paragraph didn't scare you because that was not the intention - just being grown-up about the dangers lurking around.

I understand that this decision is highly personal so I don't really mind if you think my idea sucks. Just giving you something to think about.

Thanks bug..... that's just what I am talking about. There are a lot of angles I have never thought of. Yours is a good one, and I am going to think very hard about it. Any other suggestions are welcome.

Regards

Hi Petra,
I'm glad you reached the level of consistently profitable trading.
You wrote you will share your success, when you found it.
I'm not thinking of exact strategy or rules, just your opinion and thinking about it.

Thanks

Brian

Hi Brian,
I do not think I have "made it" yet as a trader. However, I must admit that 2 years of profitable trading is a milestone that many traders never pass. I do think I have picked up a lot of valuable insight that could possibly be of benifit to some traders out there. I'm not sure how best to share it, though. Perhaps I should post it in my profile, or perhaps I should start a thread. I will give it some thought and let you know. I welcome your suggestions. Good trades to you!!

Regards,

Hi FX-Petra, congratulations on being profitable. If you allow me, I’ll reply from a different perspective. Turning 5K into 28K should not be used as a measure of success. However what is more important is looking under the hood, and analyzing the trading activity.

If you go with the 3rd option to trade aggressively, then you have to stop thinking in money terms, but instead in R-Multiples (multiples of initial risk). Plus you’d also need to calculate the standard deviation of returns to get an objective insight on the risk that was involved during your trading activities. From such analysis you can then objectivity adjust your money management, and as you know 90% of performance variability comes from position sizing.

If you want out of Forex, and will continue trading for the money, then you might run into obstacles when taking 50K to 500-600K in three years. The reason is that so far you’ve traded only a fraction of such size, and it might magnify your psychological weaknesses which might not be apparent when trading 5K-28K. We all have huge psychological weaknesses, and the market is the best place to act them out. Using money as an incentive impairs human performance and reduces flexibility, and I think it is a big ask to turn 50K into 500K in 3years, especially if you’ll be motivated by monetary rewards instead by being motivated by flawless execution and by working on your weaknesses. Being driven by monetary rewards and using them as a yard stick is not the way to go in my opinion. At least it didn’t work for me in the past. Sticking to proven sound trading principles which are based on psychology is what works in the long run, and I don’t think there are short cuts, ........it might catch up with you, ….......it does with everyone.

If you want to have consistently large returns and a smooth equity curve, then you must not give a damn about money and love the challenge of trading and not be pushing hard so that you can leave Forex once you make big money. This has a potential to create a conflict and a head on collision with your desire to rapidly accumulate 500-600k. I’m not trying discourage at all, I’m just pointing out that it will need a different mindset for your 3rd option, plus the outcome is not guaranteed.

Your 1st option of opening new business is also risky, and dependants on your relevant business skills. You’re in the best position to assess your business skills. The second option seems the most conservative. Perhaps you could have one conservative trading account as “bug” previously suggested, and one for aggressive trading so you don’t have to totally abandon your 3rd option. Not ideal, but at least some diversification to reduce risk and to reduce stress should help.

It’s best to follow your own bliss. You cannot buy happiness with money, and most of us started trading in order to improve the quality of our lives, and then trading becomes a major “stressor” in our lives. Follow your bliss, you live only once, let your intuition be your guidance. I wish you great prosperity.

Thanks HM,

I am in the process of splitting my account. I am taking 10% and going to trade much more aggesivley, trying to accelerate my returns. The other 90% I will be a lot more conservative with.

I'm not to worried about sweating at the 500k level. I have made and lost a lot of money over the years. Everyone has a different squeal point (when pressure affects their decisions) and mine is north of 1 million.

I thank you for your post. You made some very good points and have given me a few things to think about.

Regards,

Hi FX-Petra,

Been reading your post in AUD/USD thread since i first join FF and now in the new AUDUSD thread as well. Keep up the good work! Hope you achieve a lot of success this year!

Azayi

Thanks Azayi. My 10% high risk account is not going so great right now. I started off with a bang, but took some losses as well. Presently only up about 3% in that account. My regular account is doing fairly well. I am making money, although at a little slower rate than I had hoped. I will update all my results at the end of April (first quarter). Hope all your trades to well!

Regards,