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Newbie Experiences in Forex

  • #1
  • First Post: Apr 13, 2006 5:52pm Apr 13, 2006 5:52pm
Hey Guys,

I am a complete newbie to Forex as well as to any sort of trading market whatsoever. I've been reading about Forex since April 3rd ever since I stumbled across a BusinessWeek article discussing it while sitting in the bathroom at work (we have only Forbes, Businessweek, and the Wallstreet Journal in our bathroom).

I opened up a small account with Forex.com with $250 and have since withered it down to $30 as of last Friday. Since I am not made of money as I am working for $11.50 an hour at the moment AND trying to start my own business... I decided I can't continue to lose like that so I started reading more heavily on this forum and around the net.

So far... I have devised a very simple system based primarily on some reading from the Baby Pips website. It seems to be going pretty well... I made a relatively big loss on my demo account before mastering the system and I'm still ahead of where I started. Once I close my currently open trades I'll post a little log of the trouble I've gotten into so far!
  • #2
  • Apr 13, 2006 9:00pm Apr 13, 2006 9:00pm
http://www.sundownaudio.com/forex/De...tement_413.htm

The above file will show you my current activity to date on this practice account. To follow is some analysis on my part.

****

I really blew it on Ticket #712066 AUD/JPY. Had I just waited a bit longer I could have lost much less money, I panicked a bit seeing the large negative number and jumped out even though the indicators in my system told me to stay aboard. I entered this trade with inadequate confirmation to start with.

On Ticket #846450 my indicators told me to stick around but I got out. Again, seeing the loss made me bail out. If I stayed in I could have came out with something like a +10 pip gain on this one.

My other annoying mistake was Ticket #896228 AUD/USD. I acted on this trade even though my indicators weren't all in place and I lost. I bailed out since I realized that I traded with a lack of confirmation and wanted to avoid a bigger loss, if one was to be had (as yet not determined).

****

Ticket #895328 I bailed too early seeing a tiny profit because it looked a bit shakey on the small scales. As of right now I could have gained a few more pips if I still had it. I did come out ahead on this trade, but I was hasty exiting based on hindsight.

Ticket #895448 I also bailed too early. It is currently 12 points ahead of where I sold. I went against my indicators when they ALL told me to hold just to gain the small profit. I need to learn to be more patient to make larger gains.

****

Sorry I didn't comment on all of my trades... but those are the memorable ones where I felt like I made a mistake.

****

My currently open NZD/USD trade is looking a little grim. I need to get this habit beaten before I use real money, but I acted without my indicators thinking they were *about* to turn around to a "buy" position based on 1 minute window information. I know, probably not the greatest idea on my part but I let emotion get ahead of me. This trade MAY still turn out okay based on 1 week window information with my indicators but I'm not accustomed to using my "system" with long time frames.

****

Any comments for me? Encouragement? Advice?
  • #3
  • Apr 13, 2006 9:23pm Apr 13, 2006 9:23pm
Discipline is important especially for new traders. Try stick to your trading plan/strategy for a week without emotional, and see if the strategy works. Remember a strategy may work this month, not next month; this year, not next year. There's always a tuning process. Just like a car always needed to be tuned and modify for different race track, so is your strategy. After demo for couple month, try a mini account. Trading with real money involved greed and fear, very different than demo.
Looking for pips!!!
  • #4
  • Apr 18, 2006 7:04pm Apr 18, 2006 7:04pm
I refined my strategy and started my practice account over again. So I will be posting totally new data next time.
  • #5
  • Apr 19, 2006 12:30am Apr 19, 2006 12:30am
Quoting sundownz
I refined my strategy and started my practice account over again. So I will be posting totally new data next time.
Wishing you all the best and just try to stick to your plan and forget about the heat of the battle, it's about making money, no matter how many soldiers die...


Thanks,

Nader
  • #6
  • Apr 19, 2006 12:57am Apr 19, 2006 12:57am
Take a good look at Vegas wealth builder model. It should help you quite a bit and try using stop loss order and take profit order which can cut down on emotion.
  • #7
  • Apr 21, 2006 6:24pm Apr 21, 2006 6:24pm
narafa,

Thank you for the words of encouragement.

****

varunk666,

I've printed that one out and I am still working my way through trying to make sure I understand the whole thing. This is my first venture into any kind of trading :-)

****

http://www.sundownaudio.com/forex/Log_42106.htm

New account started and new trades are logged in the above file.

Ticket #1274920:
This trade broke even. I bought too hastily and then after further study of the graphs decided that this trade was not certain enough for me to keep. I feel this was a good decision since my program is based on short term trades and this pair didn't do much of anything by the time I went to bed. I could have made perhaps 1 or 2 pips, but I didn't want to take the risk.

Ticket # 1282287:
My indicators came up strong in the short term so I bought and set my take profit at only +3 pips since I was uncertain about the longer duration. Not a bad trade 7 minutes long, that made me $120 which is actually greater than my daily trade goal when I get started (I will be shooting for $100 per day for my first year or so for real trading).

Ticket # 1314065
Again, my indicators looked very good but for a longer term than the previous trade so I held this one and set my take profit for +7 pips. I was comfortable enough on this one to go to bed and let my TP command take care of business. In a 90 minute trade I made $280.00 bringing my daily total to $400 which would allow me almost a week off at my goal income rate.

Goals:

I should be clear that I am setting modest goals for my trading. If I hit $100 per day I will *not* trade unless I see something that looks simply infallable like Ticket #1314065 was for me.

If I can reach an overall average gain of $100 per day for the next 12 - 16 weeks on my practice account I'm going to give it another go with real money (I wasted away a $250 account rather quickly to start with when I first began).

FOREX trading will only be to supplement my income. I currently work a pretty regular job for a relatively modest $11.50 per hour during the day to pay the bills -- don't get me wrong, I love my job, it's a really care free warehouse position but I realize the pay is sub-par and I need to move on eventually.

I am also working on starting a business (my trading logs are hosted on my business server) which will eventually turn into my main income stream allowing me to leave my regular job in about 2 - 3 more years. If FOREX goes well enough and I can exceed my $100 a day goals it may even become a revenue stream used to fuel new products for my business. That is a big dreamy idea, but I have been dedicating at LEAST one hour per day to studying the FOREX markets ever since I found out about them.

And thanks to everyone on the forum again! It has been a tremendous help to me so far.
  • #8
  • Apr 21, 2006 10:03pm Apr 21, 2006 10:03pm
Link below will take you to one of the most valuable (in my opinion) threads in FF. Practice will make you a master...

http://www.forexfactory.com/forexfor...ighlight=james
  • #9
  • Apr 21, 2006 11:57pm Apr 21, 2006 11:57pm
Quoting raczekfx
Link below will take you to one of the most valuable (in my opinion) threads in FF. Practice will make you a master...

http://www.forexfactory.com/forexfor...ighlight=james
Oh yes, it's a very awesome thread indeed! I've printed out most of the graphs for study and reference. I found it exceptionally useful.
  • #10
  • Apr 24, 2006 6:22pm Apr 24, 2006 6:22pm
http://www.sundownaudio.com/forex/Log_42406.htm

Ticket #1347425

I bailed out of my long EUR/JPY position too early. I got into this trade almost as soon as the market opened on Sunday before things started to get stable. I noted the major uptrends in the larger time frames so I got in (correctly I might add). Unfortunatly for me I set my stop loss too high and I got out of the trade with -18 pips.

Ticket #1349442

I made +2 pips on this EUR/USD long trade, and I don't regret getting out of this one when I did. I learned my lesson from the previous ticket and held on through the unstable period since the market was newly opened (this was more than -25 pips before it recovered). If I had set my stop loss too high I could have lost big on this one. This pair is a little too "quirky" for me at the moment so I may avoid it for a few days.

Ticket #1350864

NZD/USD is one of my favorites. It has been on a recovery swing lately and last night was no exception. Once again I bought a bit early so I had to hold on while the market stabilized and went about it's normal course. I ended up with +11 pips on this trade, a good deal if I do say so myself. I got out almost at the perfect moment as it's lower than my sell point at the time of posting this. I may have to start shorting this pair for a while since my indicators are turning south on me as I watch them while typing this!

Ticket #1351376

Realizing I was indeed RIGHT about the EUR/JPY trend earlier and only made the mistake on my stop loss I got back in to this pair long. I made back 10 pips to regain a good bit of what I lost on my all too conservative stop loss. I could have made +18 pips had I stayed in from the point of my original EUR/JPY ticket, but we all make mistakes. This pair has since taken a sharp down turn of well over -100 pips, so I got out at a very oppurtune moment on this one.

****

LESSONS LEARNED:

New Personal Rule:

* Do not trade on Sunday until the market has been open for a few hours. I saw some tremendous leaps at the time of the market open which weren't indicitive of the "real" trends, and the market had to correct itself before following it's course once again. It'll save me alot of headache and risk to stay out of the markets until around 2 hours after open time (about 8 PM EST).

* I had already made a rule similar to the above for weekdays, I don't trade until 8:30 PM EST on weekdays for the same reasons. When the Japanese market opens up I got killed on several trades on my older practice accounts. I simply don't trade until those markets open so I can see what they will do to the pairs I am watching. I miss some oppurtunities this way but I see it as risk management.
  • #11
  • Apr 24, 2006 7:19pm Apr 24, 2006 7:19pm
If you don't mind my suggestion, It is not the Sunday or the earlier trades that I have found to be problematic. You may notice that during certain hours the markets can be expected to have greater activity. Like the 17:00 to 19:00 ET of the Asian open, The 00:00 to 02:00 ET of the London open, the
8:30 ET of the US News, the 8:00 to 10:00 ET of the US open and London close.

If you know there is greater action at these times. you may be able to work it to your advantage.

Take a look at a chart. I follow the GBPUSD pretty closely. You will see increased action during these time frames... That is opportunity knocking.

Thanks Scott



Quoting sundownz
http://www.sundownaudio.com/forex/Log_42406.htm

Ticket #1347425

I bailed out of my long EUR/JPY position too early. I got into this trade almost as soon as the market opened on Sunday before things started to get stable. I noted the major uptrends in the larger time frames so I got in (correctly I might add). Unfortunatly for me I set my stop loss too high and I got out of the trade with -18 pips.

Ticket #1349442

I made +2 pips on this EUR/USD long trade, and I don't regret getting out of this one when I did. I learned my lesson from the previous ticket and held on through the unstable period since the market was newly opened (this was more than -25 pips before it recovered). If I had set my stop loss too high I could have lost big on this one. This pair is a little too "quirky" for me at the moment so I may avoid it for a few days.

Ticket #1350864

NZD/USD is one of my favorites. It has been on a recovery swing lately and last night was no exception. Once again I bought a bit early so I had to hold on while the market stabilized and went about it's normal course. I ended up with +11 pips on this trade, a good deal if I do say so myself. I got out almost at the perfect moment as it's lower than my sell point at the time of posting this. I may have to start shorting this pair for a while since my indicators are turning south on me as I watch them while typing this!

Ticket #1351376

Realizing I was indeed RIGHT about the EUR/JPY trend earlier and only made the mistake on my stop loss I got back in to this pair long. I made back 10 pips to regain a good bit of what I lost on my all too conservative stop loss. I could have made +18 pips had I stayed in from the point of my original EUR/JPY ticket, but we all make mistakes. This pair has since taken a sharp down turn of well over -100 pips, so I got out at a very oppurtune moment on this one.

****

LESSONS LEARNED:

New Personal Rule:

* Do not trade on Sunday until the market has been open for a few hours. I saw some tremendous leaps at the time of the market open which weren't indicitive of the "real" trends, and the market had to correct itself before following it's course once again. It'll save me alot of headache and risk to stay out of the markets until around 2 hours after open time (about 8 PM EST).

* I had already made a rule similar to the above for weekdays, I don't trade until 8:30 PM EST on weekdays for the same reasons. When the Japanese market opens up I got killed on several trades on my older practice accounts. I simply don't trade until those markets open so I can see what they will do to the pairs I am watching. I miss some oppurtunities this way but I see it as risk management.
  • #12
  • Apr 25, 2006 6:45pm Apr 25, 2006 6:45pm
Quoting smjones
If you don't mind my suggestion, It is not the Sunday or the earlier trades that I have found to be problematic. You may notice that during certain hours the markets can be expected to have greater activity. Like the 17:00 to 19:00 ET of the Asian open, The 00:00 to 02:00 ET of the London open, the
8:30 ET of the US News, the 8:00 to 10:00 ET of the US open and London close.

If you know there is greater action at these times. you may be able to work it to your advantage.

Take a look at a chart. I follow the GBPUSD pretty closely. You will see increased action during these time frames... That is opportunity knocking.

Thanks Scott
Scott,

Thanks for the tip. I will keep my eye on the charts and see what I can make of it. At the current time I seem to lose hard at many of the times of higher volume Perhaps I just have alot to learn!
  • #13
  • Apr 26, 2006 9:16am Apr 26, 2006 9:16am
nice to hear that you chose to be a trader ,
  • #14
  • May 1, 2006 6:21pm May 1, 2006 6:21pm
I will preface this post with a thanks to you guys. I have learned a HUGE amount of information from this forum that I doubt I could have anywhere else. My demo account is working out wonderfully so far.

Since my last post I started out with a GIANT blunder... first buying EUR/USD and selling at a 7 pip loss then getting mad and shorting that pair at a 28 pip loss (emotions = bad)! That drew my demo account down below my starting amount very slightly. THIS taught me the lesson of how a price oscillates as it goes up and doesn't go up in anything resembling a straight line (which caused me to sell off in the first place)... and that if the OVERALL trend is good it probably isn't a turn-around (my second mistake to short it).

Since that HUGE set of mistakes I've made 10 winning trades in a row with 5 different currency pairs. My account, after 11 days, is at an average of $103 a day which is ahead of my goal... and that even counts days the market was closed and does not count any trading I may do tonight.

I could have made large sums on EUR/USD but I chose to be on the extremely safe side and test my strategy only shooting for $100 a day or a bit more if I was *absolutely sure* (as far as one can be) that it would succeed. This helps me become more assured of long term success (I doubt an oppurtunity as good as the recent EUR/USD will exist all the time). I also only have access to my demo account for about 30 minutes each morning and 3 hours each night, as I'm using Metrader on my home PC and have no such access at work -- so that is also a factor.

Updated trade Log:

http://www.sundownaudio.com/forex/Log_50106.htm
  • #15
  • May 1, 2006 6:30pm May 1, 2006 6:30pm
I made a typing mistake... my average is actually almost $130 a day and not $103 per day as I typed (I'm sure everyone already noticed my mistake!).
  • #16
  • May 2, 2006 5:10am May 2, 2006 5:10am
Hmmm. I didn't make a mistake at first after all, I had a long day yesterday. It was, in fact, $103 per day.

Last night I hopped into USD/JPY at 113.79, too early I might add, but I did manage to grab a 15 pip gain. I wasn't actually at my computer when it happened, I was in bed, but it it hit as low as 112.32 before it jumped back up to 114.02 (I had take profit at 113.94 to be safe).

This brings my $5k practice account up to $6405.70 as of a little before 3 AM EST.
  • #17
  • May 3, 2006 8:26pm May 3, 2006 8:26pm
Practice account sits at $6767.23 as of now, making my average $135.94 per day if I don't make any trades tonight.

Since my last post I made the following:

GBP/USD : +5 pips, 2 lots @ $100.00 gain
AUD/USD : +5 pips, 1 lot @ $50.00 gain
EUR/JPY: +2 pips, 2 lots @ $35.34 gain (set stop loss too high)
EUR/JPY: +10 pips, 2 lots @ $176.19 gain (got back in)

I'm feeling very good about my ability to pick small term gains and make my goal profit per day. I wish I could master when to exit trades for maximum profit (I always exit very safely and don't maximize profit) and where to set my stop losses to not interrupt a good trade.

Overall, though, I am VERY pleased with my results so far. My intent is not necessarily to make the MOST money on every trade, but to make the most possible correct trades in a very safe manner to produce a *predictable* income stream -- a steady stream is more important to me than large hunks here and there.
  • #18
  • May 4, 2006 5:51am May 4, 2006 5:51am
I cannot seem to master setting a stop loss...

I got into EUR/JPY short last night @ 143.56 and set my TP to 143.46 based on the 4H chart indications of it reaching the top of a rising wave, basically a small pip gain swing trade attempt. Well I set my SL at 143.96 only to have it hit 144.0 overnight and drop as far as 143.38 after that. So my projection was correct about the small swing but my stop loss was 4 points off so instead of making my $176.19 gain I made a loss of -$701.69 which takes my profit back a few days.

I was off about the top of the wave as well, hence the rise to my stop loss. I have a keen ability to enter the right trade at the wrong time for maximizing profits.
  • #19
  • May 6, 2006 12:21am May 6, 2006 12:21am
http://www.sundownaudio.com/forex/Log_50606.htm

Despite having recently taken the largest loss in my current practice account history my account is sitting at +$1552.35 from the start, making my average a little over $100 per day so I'm right on target.

If you look back at ticket #1839904 I had set a buy limit at cancelled... well I should have held it since I was on the right track albeit my buy limit was still too high. I made a great trade 4 days later on that pair buying 4 pips higher than my old buy limit and making 20 pips. That trade made back half of the 40 pips I lost on my big losing trade that I discussed earlier.

I have found that I am very good at following JPY related pairs (USD/JPY and EUR/JPY specifically), probably due to the indicators I use. I have been on the right track with every trade in any JPY related pair I have made; even ticket #1347425 where I made a loss... had I held that trade I would have came out very well for me about 11 days later (a long trade for me)... and also ticket #2010639 which was my biggest loss, but only due to an incorrect stop loss, it ended up at my target.

So it seems that if I can master holding time and stop losses and stick with USD/JPY and EUR/JPY (for now anyway) I may be able to increase my average. We'll see how things develop when the market re-opens and I start trading again. It really is incredible how much I learn, especially when I make a loss

And boy if only I had holding time down... I could have made a fortune on a single GBP/USD trade starting with my FIRST trade (which I got out at break even) and ending at ticket #1922789 for a 589 pip gain and with my FOUR lot position that would have meant a $23,560 gain for me. For that matter it's all the way up to 1.8584 now which would have been a 793 pip gain or $31,720 in cash. I was in and out of this pair a few times... but I never caught on to STAY in. We live and learn
  • #20
  • May 12, 2006 6:47pm May 12, 2006 6:47pm
This practice account expired on day 21 at $7298 total, for a gain of $2298 or an average of $109 per day which was right on target with my goals. My last trade was a large one, a short on USD/JPY with a gain of 29 pips using 40% of my position. This made up for a loss on day 19 due to a mistake on entering my stop loss (I was right about the trend, but my stop was taken out) and brought me ahead and back on track.

So... it appears I have what it takes to achieve my goal of around $100 per day. I have started a new practice account using MIG Investments -- this account was a practice with InterbankFX -- MIG has narrower spreads which work better with my typical short-term low pip gain trades.

The new MIG account was started last night and has moved from $5000 to $5131 already. I started that one out with a loss, again, due to the stop loss being taken out even though I was right on target with what the trend was going to do. I am starting to get very leery of stop losses as MOST of my loss trades in my previous account were stop loss hits where the pair went right back to where I expected. I am actually fairly certain that only one of the trades I made was actually totally wrong and the rest were S/L hits that would have made my T/P level.
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