February 15, 2013
Answering the original goal of the blog:

Welp, what started as a project to learn more has become a self competition. And damn do I enjoy competition.

I probably posted something about it at the end-of-the-year blog series, but I’ll re-hash it here. In my eyes, the answer to the question put out on day 1, Jan 1, 2012 is yes. Yes it is possible to make money trading. But I need to prove it. To myself, and to anyone who might stumble onto this blog. That is the point of allllll of this. The only way to do this is to have a proven record of success, which myfxbook does. I already started 1 account, posted it, and lost a little. I then hedged a position with another account which led to what appears to be an even bigger loss. Honest statement. However, in the world of the internet I don’t expect anyone to believe that I truly hedged it. A true observer should be open-minded yet slightly skeptic. The link to the account is not to be deleted until the end of 2013 minimum.

1 thing is certain: the world of investing and speculation is not easy. To expect great results in 1 year is laughable. I am also not the average ‘lets make a blog and go for it’. I really committed to the blog and learning, and will continue to do so until I succeed.

Here’s what’s going to happen:

I’m giving myself until the end of the year to be profitable. Considerably profitable. The results I want to achieve should leave no doubt to the question “Did I get lucky?” It will be clear. I will have either succeeded or failed.

I will dummy test against 20 different random buy/sell hold situations. They will be listed at the bottom of this post, and are assuming an open position today (even though markets are closed). The ‘random walk theory’ will not be an available argument. That being said, I will say the yens have been absolutely crazy. It is very possible that they will make gains of over 100% by the end of the year and will blow my results out of the water. We will deal with it then.

I will not add any more money to the account. Even though it is in a hole not due to my system, I will be content with digging myself out of it. More of a challenge I suppose.

I’m not boasting nor bragging about how easy this will be. It won’t be. The talk is gone, the observations and hindsight trading are gone. All that’s left is completing the task.

In all, it is fairly basic: the account that was started Jan 2, 2013, will have a 1 year test to answer the question of Jan 1, 2012. That’s it! see ya’ll on the other side.

Control test: 15 pairs, both buying and selling. I’m seeing weekend spreads, but 10 pips isn’t going to make the hit or miss when the end of the year rolls around

EUR/USD BUY 1.33628
EUR/USD SELL 1.33585

AUD/USD BUY 1.03083
AUD/USD SELL 1.03022

GBP/USD BUY 1.55203
GBP/USD SELL 1.55152

USD/CHF BUY .92229
USD/CHF SELL .92144

USD/CAD BUY 1.00663
USD/CAD SELL 1.00615

NZD/USD BUY .84574
NZD/USD SELL .84424

USD/JPY BUY 93.534
USD/JPY SELL 93.468

EUR/AUD BUY 1.29710
EUR/AUD SELL 1.29610

EUR/GBP BUY .86126
EUR/GBP SELL .86068

EUR/CAD BUY 1.34504
EUR/CAD SELL 1.34404

EUR/JPY BUY 124.978
EUR/JPY SELL 124.878

AUD/NZD BUY 1.22109
AUD/NZD SELL 1.21821

AUD/JPY BUY 96.418
AUD/JPY SELL 96.292

GBP/AUD BUY 1.50651
GBP/AUD SELL 1.50512

GBP/JPY BUY 145.146
GBP/JPY SELL 145.031

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December 29, 2012
Dec 29, 2012: Top 10

8. Journal trades!

I have essentially done this all year, and it’s something I’d like to continue as I trade next year. It doesn’t have to be in great detail, or with pictures and everything, but it’s important to be able to look back on trades on a very objective point of view. It prevents me from being able to over or under estimate how well a trade went, and streaks of trades that turn out a certain way will give insight on a trade mechanic or price flow structure that I was previously unaware of.

9. Lose to win

I’ve said it a lot, and I’ll keep saying it. Both as a lesson and self reminder, think long term. Whether it be for a job, extra cash, or retirement fund, there’s always time. A lot of it. Don’t rush for trades, don’t make huge expectations to be fulfilled. Just take the trades as they come, and really try to be satisfied as long as long as you are profitable. Once being profitable is in the bag, then start moving on to be more ambitious with goals

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December 28, 2012
Dec 28, 2012: Top 10

7. Beware of fake outs

in combination with the previous lesson/s, be careful when trading the breakout. Especially with lower time frame trading, fake outs lead to quick hits to the trading account. One rule that I have developed is the following: If I am currently watching and actively trading the market, I wait for a close on my entry time frame. For example, if I trade using my 1 hr 20 pip strategy, I use a 5 minute entry TF. If I long as price breaks out of the previous days high, I will often take the trade after a 5 minute candle has closed above the previous days high. Larger time frame entries are slightly less prone to fake outs, but in general, if it is not a limit order, waiting for a close above the entry point on longs (or below entry point on shorts) is the safe bet.

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December 27, 2012
Dec 27, 2012: Top 10

6. Don’t rush entry. After a week long vacation, I can easily say that I missed a few really really good, nice and easy setups on the 4hr charts on AUD/USD and AUD/NZD. But not to fret, because I realized how many trades really do take place. Next year will offer many more set ups, just as easy and just as nice if time isn’t an issue. As a beginner trader, I have tried to stop worrying so much about getting in at optimal price, and instead just tried to get most of the trade. Bulk, bulk bulk. Get the bulk of the trade. It’s okay to be a little late to the party, but never forget that price often gives multiple entries, and to jump in because price has broken out often leads to getting kicked out because many people begin to take profits at spikes.

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December 26, 2012
Dec 26, 2012: Top 10

5. Never stop learning

Regardless of how successful I get, or how well a strategy works, the world of forex is so huge that there is always something to work. Is my day trading strategy as optimal as I’d like? Make another one with different entry/exit! Trade different time frames, make a variety of styles to create your own fund, watch how the market adapts over time. It is very possible that a strategy works great for one year or month, and then dies out the next. Smart people do this for a living. There’s no way they’ll idle around and wait to retire. They’re finding new methods to trade that others have not figured out yet, and I will always try to do that as well

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December 25, 2012
Dec 25, 2012: Top 10

4. Money management

This is something that I have not written much about at all, because admittedly it is something that I am not experienced in. However, it needs to be in everyone’s rules. A trader told me that if you picked a basic basic strategy, and just followed a strict set of rules that said when to get in and out based on % risk/reward, you could be profitable. When it comes to management, be as mechanical as possible. If you give yourself max 3% loss per trade, don’t ever ever move it. If a setup offers a great risk/reward ratio but the risk would be greater than 3%, either lower the position size or don’t take the trade. Don’t give yourself an excuse to break the rules that you have worked hard on to create

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December 24, 2012
Dec 24, 2012: Top 10

3. You do you.

As a beginner trader, I took tips and trade advice from everyone. I took trade setups and didn’t know why, but took them anyhow. Demo of course. It’s hard to explain, but after a while, I began to filter out advice from some while still taking advice from others. You should always want a reason for taking a trade, and that will never change. Assuming that all the traders who offer advice are successful, they have their own reasons for taking the trade they do right? Listen to the reasoning, and if it makes sense, if it fits, than take the trade. Everyone has their own personality that needs to be fitted into their trading model. Some like to be in the action a lot, others would rather sit back. Don’t take a big swing trade setup from a professional if you can’t handle being in the red for the first 4 hours of the trade. Likewise, don’t take setups on a 5m and 1hr chart if you’re looking to make 100 pips or don’t mind taking a trade and holding onto it for a week. Take a trade that fits your style. Use a style that fits your personality. If you’re in the process of learning your own personality and your style, remember to be open minded to what others will offer you, but do not mix advice. Combining scalp rules and mindsets with a swing trader will lead to taking poor entries and exits.

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December 23, 2012
Dec 23, 2012: Top 10

2. Support and resistance really is king.

Basics rule. Watch for the important levels and trade off of them. Support and resistance doesn’t have to be strictly horizontal. They come from a variety of things. Big round numbers, trend lines, moving averages, fib lines, etc. Its clear that some lines are stronger than others, and that they shouldn’t be take to be solid lines dictating when price will move the other direction. Rather, I like to think of support and resistance lines as bands around a line. It is common to see price move a little above and a little below the bounds. However once price moves too far through, the band snaps and price is unrestrained until the next band comes into play. Understand that Support and Resistance dictates price movement, but also understand that they are broken on a regular basis.

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December 22, 2012
Dec 22, 2012: Top 10

10 days left in the year, 10 big lessons and general things I’ve learned from my 1 year learning how to trade

1. I do think it is possible.

This may be too soon to say, but I am fairly confident in my ability to come out in the green from January to February. It may be the case that my trading style doesn’t work for everyone (since it requires me to be awake and fairly active, at least for a while) to be awake during the London session. It may be the case that my strategy guidelines will lead me to take trades I shouldn’t, but I will stick to the rules. There are a lot of methods out there that may work, and while I haven’t found the get rich quick scheme or the strategy that works 100%, or even 90% of the time, I believe I have foundsomething that at leastworks. We will see.

I do believe that forex is at least a means of portfolio building. While the best or safest way to do this isn’t day trading like I am doing, a longer term strategy may show that if you put in the time and effort, it’s not a luck of the draw as it may seem at first. If I continue trading next year, I will most likely be in search of a longer term strategy that trades strictly off daily charts, with perhaps a 4hr or 8hr entry. Something with a lower return, lower risk, maybeto be run for a year.

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December 12, 2012
Bit of a ‘Live’ trade set up for tonight

I’ll be looking to buy either on the breakout of the days high or after a retrace. Either way I’m bullish on Eur/Usd.

Option 1: Limit Buy Eur/Usd

EP: 1.30988 SL: 1.30745 TP: 1.31233(more conservative at 1.31188)

Option 2: Limit Buy Eur/Usd

EP: 1.30755 (half) 1.30655(other half) SL: 1.30530 TP: 1.3120

Only 1 is triggering. Once one sets off, I’m canceling the other.

I’d only consider selling after price goes below 1.3050, most likely EP: 1.3045, SL: 1.3075, TP:1.3005.

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