Am i making progress?

I blew up an account at the age of 18 with real money (all my money at the time) and over the last 3 years all I did was read (no practice trade). About two months ago I started paper trading forex and i can never consistently keep profits. I make 20% on an account in 2 weeks then i lose it, then i make it again, then i lose it. I have like 6-7-8 losers in a row (that make me lose 20%) and then like 1-2 massive winners that makes me go back up the 20%. I paper trade risking about 2%/trade and i try to keep profits running by setting initial take profits and letting the rest run, sometimes the rest gets stopped out, sometimes it gives me a huge winner. I feel like i am going around in circles. I used to be very impulsive but i have toned that down slightly. I also tell myself i will focus on longer term charts but i tend to zoom into the 1hr and 4hr charts alot.

Can anyone who has been through this provide some insight as to what i should change or look into?

Just from reading my post, it seems like i have too many losers? since i have lets say 7 losers in a row then 2 winners thats only 22% win rate, which is low? I try to trade price action at key areas of S/R, but I'm thinking maybe my stops are too close so i constantly get stopped out?

Please help me out.

Hello fellow Canuck

Well, you've got a good start with an understanding of price action and S/R levels. However, don't shy away from indicators just for the sake of being a purist - when used properly, they do serve their purpose well. I suggest that you read the following thread, it's short, by a fellow Canuck (how about that, eh?) and best of all, combined with your present understanding you'll probably find that you can resolve some of your take profit and stop loss issues. Remember, keep it simple.

http://www.forexfactory.com/showthread.php?t=106165

Worth it's weight in gold, IMHO.

i suspect you are having trouble with market structure.

if nothing else look at a chart and ask yourself what kind of market youre seeing. that should be your point of start.

there are only 3

bull
bear
ranging----ranging is devided into 2 but you never know till after the fact (toppping or consolidating) a clue here is that topping is after a big up move and consolidating after a big down move.

in reality the market is an unpredictable predictable order in chaos. that is why people lose their money.

combine fundamentals for direction (gdp, interest rates, employement rate) and understand that the dollar is the reserve currency traded in close to 80% of forex transactions. so concern yourself with where the dollar is moving and understand correlations in pairs.

once you have done that, read about what moves the market and how the market is moved. understand that supply demand and liquidity are very important.

price is a meassure of the three forces. undersand that delealers and market makers WILL hunt yours stops, think where you would put a stop loss.

now dont do it, it will be hit, that is part of liquidity so look in to it to understand it.

understand that price cannot be predicted so focus on what you CAN control.
your risk exposure

in the very basic

you should scale in, start small and only add to a position when it goes your way. (do not be concern with the waves, but have a feel of the overall direction, and you should be okay)


the markets is hard work, and is more art than sience. so these are broad statements but.....
these are statements that have taught me a lot

" he who knows the enemy and himself is victorious"
"he who knows himself but not the enemy for every battle he wins he will equally suffer defeat"
" he who doesnt know the enemy or himself will succum in every battle"
"no one ever went broke taking a profit, however no one ever went rich taking a 4 point profit in a bull market" ----jesse livermore


also keep in mind that trading should be like waging war, you are in the line of fire the moment you put your troops in the maket (lots) make sure you position them in a defensive way, at areas of least risk but understand that stop hunting happens. so dont rely on S/R lines.

using foreign capital gives you more freedom to risk more (hense scaling in, as you place your lot and the market moves your way it shows profit scale in such a way where that profit is being risk but not your core acount, and so repeat the process"

I am new to FX live too. Been practising on forextester until I got comfortable, though I have to admit that backtesting has been more successful.

What I have to share is a spreadsheet that shows the results of 40 pip gain daily over a 100 trading days. It keeps me motivated.

I wish I had started out young like yourself.

My guess is you are overtrading.
Try trading only with a major trend in place (a trend on the weekly, monthly). Like usd/chf only to the downside. Then you should be able to make money.

Hi staffpro,

I am sure most successful traders have blown up an account or two
when they started out, it's part of learning.

I have found paper trading is only good for the very beginnings of an idea,
once you have a system or method you think is profitable, try to trade it live but using the smallest pip value you can (micro account).

The fact that it's real money (even small value) makes a big difference to paper trading results. Try it and see.

Good trading to you.