Case Study: My Adventures in Forex Trading (Update: 10/09)

Posted by Dustin 18 October, 2009 (2) Comment

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My last Forex update was in April. I had recently transferred our account from a US based branch of FXCM to the UK office. The US government changed the laws and that basically took away a lot of the advantages of Forex. If you’d like a more detailed explanation, I please e-mail me and I can direct you to a more knowledgeable person.

Given the interruptions, we (my wife and I) have been actively Forex trading for a little under 5 months, but we’ve been very happy with the results.

Please take a look at past Forex updates to get an idea of the beginning of our journey.

· 1/15/09: Balance: 15,485.80 Equity: 13,530.00

· 2/16/09: Balance: 16,768.40 Equity: 13,981.30

· 3/16/09: Balance: 17,971.20 Equity: 15,116.20

· 4/16/09: Balance: 20,341.88 Equity: 18,171.08

When you look at the past articles, you will see that there is mention of a demo account. Unfortunately, the transfer of our account from the US to the UK resulted in the demo account evaporating so I will not be reporting on those results going forward.

My strategy - correction - my mentor’s strategy, is that I read the charts before I go to bed, when I wake up, and when I get home from work. I read the charts at those times and put trades in from what I see. I’m not an active trader, per se, because I simply choose entry and exit points based on the charts. Basically, I make my money when I’m asleep or when I’m at work. I put in as much as 10 minutes and as little as a few minutes into Forex trading each day. The key for me is to be consistent and not greedy. Instead of going for the home run trade, I go for lots of base hits.

In the last month, my wife and I started to become serious about Forex trading and decided to put more money into our account because of past performance success.

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If you look at the beginning balance and deposit, you can see that we made a significant addition to our account. This addition is what enabled us to do as well as we started doing in terms of profit this month: $1,375.80 ($2,974.40 in total earnings).

Forex is a great market because you trade based on margin, however that same margin can also get you into trouble very quickly. It’s really important to have a good margin percentage. I know it’s difficult to get a perspective on what I’m talking about, but basically you want a really high margin percentage. My current margin percentage is at 98.85%. You want to make sure it’s above 90%. We were able to make more money this month than in any previous month because we have more money in our account. This gave us a higher margin percentage given our trading level, giving us the ability to trade more units. Yes, I know this may seem very confusing, but stay with me. The more money I have available to keep my margin percentage, the more units that I can trade which means I can essentially make more money and take on the same amount of or less risk if I choose.

Photo by: Kevin Dooley


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What is Leadership?

Posted by Dustin 22 May, 2009 (19) Comment

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This is the first part of a series on leadership.

Leadership is a tough quality to define. When NFL scouts look at a prospect, they classify leadership as an “intangible.” Leadership is definitely a quality, while tough to define, is a trait that you’ll able to distinguish whether a person has “it” or not.

When you take a look around you and throughout history, the world has been fortunate to have been inhabited by a whole host of influential leaders. Some of the most admired leaders have been Martin Luther King, Jr., Gandhi, and Franklin Delano Roosevelt. What made these people such great leaders? Were they particularly great public speakers? Martin Luther King, Jr. undoubtedly was a great speaker, but I’m not sure the same can be said for Gandhi and FDR?

While leadership is certainly difficult to DEFINE, there are attributes that we can associate with signs of being a leader.

1. Visionary: A leader brings a vision to it’s group. It’s a plan by which others can FOLLOW. This vision brings the followers the emotion of hope and something the followers can strive to achieve. The vision should be clear and the leader should stand up for what the leader believes in.

“A leader is a dealer in hope” – Napoleon Bonaparte

2. Reliable: You don’t want to follow someone that shows up late or doesn’t do what they say they are going to do. In a leader, you want someone that’s reliable, with a message that people can follow. If leaders aren’t consistent if their efforts and their actions, it causes followers to begin to doubt the dedication of the leader to the cause. I can’t find a citation, but historian Doris Kearns Goodwin was recently on The Daily Show. She stated that during the Great Depression and during FDR’s tenure a citizen once said something to the effect of “I don’t have any money, don’t have a job, and I don’t have a reason to live, but I keep on going because I know FDR is there.”

“Deligating work works, provided the one delegating works, too.” – Robert Half

3. Audacity: It takes guts to be a leader. It’s not for everyone. Some people would prefer to tag along for the ride and that’s fine. Not everyone can or should be a leader.

4. Empowering People: Inherently, people want to do a good job. They want to succeed and make others happy. As a leader, you need to allow people to succeed. By empowering people, the leader isn’t doing the task for the person following the leader, but instead gives them the tools necessary to succeed.

5. Positive: Nobody wants to follow a person who is “doom and gloom.” A leader doesn’t need to be all about rainbows and sunshine, but there definitely needs to be a boost of positivity especially when tackling a difficult project or the “going gets tough.”

“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” - Winston Churchill

6. Motivating: If you don’t have the previous characteristics, it certainly isn’t very motivating for the follower to follow the leader let alone do a great job. A leader needs a vision, otherwise people don’t have a map and tend to get lost.

What do you think about the 6 characteristics of leadership I’ve given? Do you have any to add?

Photo by: Jim Bowen


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Case Study: My Adventures in Forex Trading (Update: 4/16)

Posted by Dustin 16 April, 2009 (16) Comment

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This year is cruising right along. Looks like I’ve been trading for about 3 1/2 months. Here are the previous three posts so you can keep tabs on my progress:

· 1/15/09: Balance: 15,485.80 Equity: 13,530.00

· 2/16/09: Balance: 16,768.40 Equity: 13,981.30

· 3/16/09: Balance: 17,971.20 Equity: 15,116.20

I want to remind you that this is a demo account. Unfortunately, it’s not REAL money. To recap, my demo account started with $15,000. The difference between the balance and the equity is the amount in trades that are open and negative. It is my mentor’s strategy, and therefore my strategy, that I don’t take losses while trading. To avoid a margin call, there are a few ways to avoid this situation. One of the most important points is that you must have a properly funded account. When trading Forex, you are trading on margin. The brokerage firm will only allow margin up to the point that you can cover which is why proper funding is important. Another tactic to avoid a margin call is to offset a trade. If you have a trade that goes negative, whether a buy or a sell, put the opposite trade in to keep a healthy margin. The last thing you can do is only trade in single units.

I’m pretty excited about my numbers this month. I started getting pretty aggressive this month by trading more than one unit. For instance, in the past, I would trade only a single unit. If I gained 40 pips, that would translate into $40 (minus any carry over fees). This past month, I started trading 2,3, and 4 units. So, that 40 pip trade that landed me $40 in the past, landed me $80, $120, or $160 for the same trade.

New Balance and Equity Numbers
Account Summary 3/16/09 – 4/15/09

Beginning Balance 17,931.40
Comm Trading Commission 0.00
Rollover Rollover Fee -20.92
PnL Profit/Loss of Trade 2,431.40
Depos Deposit 0.00
Withd Withdrawal 0.00
Option Options Payout 0.00
Comm Options Commission 0.00
AdminFee Administrative fee 0.00
MngFee Management Fee 0.00
PerfFee Performance Fee 0.00
Void Deposit Rollback 0.00
ASPComm ASP Commission 0.00
MargInterest Interest on Usable Margin 0.00
Ending Balance 20,341.88
Floating P/L -2,170.80
Equity 18,171.08
Necessary Margin 200.00
Usable Margin 17,971.08

This month I profited $2,431.40. This is more than twice than any previous month. Also, I had a few old trades come out. If I were to close my account today and cash out, including any negative trades, I would profit over $3000. I wish I could spend more time with Forex, but unfortunately I usually only spend about 5-6 hours per week on Forex. Imagine how I would do if I spent more than a few hours per week.

Another exciting development this month is that I just opened my live account. I’m being much more conservative with that account as opposed to my demo account since it involves REAL money. I’ve also only been trading for a week so keep that in mind. Here are the numbers for my account with REAL money:

New Balance and Equity Numbers
Account Summary 4/8/09 – 4/15/09

Beginning Balance 0.00
Comm Trading Commission 0.00
Rollover Rollover Fee -0.41
PnL Profit/Loss of Trade 99.50
Depos Deposit 7,500.00
Withd Withdrawal 0.00
Option Options Payout 0.00
Comm Options Commission 0.00
AdminFee Administrative fee 0.00
MngFee Management Fee 0.00
PerfFee Performance Fee 0.00
Void Deposit Rollback 0.00
ASPComm ASP Commission 0.00
MargInterest Interest on Usable Margin 0.00
Ending Balance 7,599.09
Floating P/L 0.00
Equity 7,599.09
Necessary Margin 0.00
Usable Margin 7,599.09

As you can see, I deposited $7500.00 into the account. I’ve put in 5 trades and profited a total of $99.09. It’s definitely not Earth shattering, but I’m being very careful since it is real money and I can’t have as many trades open due to my current funding level ($7,500 as opposed to the demo account of $15,000).

Be sure to subscribe to my FULL RSS Feed to stay tuned and see how good or bad I perform next month.

Photo by Orangeacid

Other Posts

World’s Greatest Mentoring Relationships
5 Steps You Need to Take in Preparation of Being a Mentor/Protege
10 Things to Look for in a Protege
10 Things to Look for in a Mentor
Want to Be Successful? - Get a Mentor


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World’s Greatest Mentoring Relationships

Posted by Dustin 9 April, 2009 (11) Comment

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This is the fifth part of a five part series on mentoring.

1. Want to Be Successful? - Get a Mentor
2. 10 Things to Look for in a Mentor
3. 10 Things to Look for in a Protege
4. 5 Steps You Need to Take in Preparation of Being a Mentor/Protege
5. World’s Greatest Mentoring Relationships

“If I have seen further it is by standing on the shoulders of giants.” - Isaac Newton

If you look at any highly successful person, you will almost always find a mentor. It’s really hard to imagine that some people have mentors. We, as a society, tend to put people on a pedestal. In fact, it almost seems as if some famous people were just born awesome when in fact it took many set backs and failures before they achieved greatness.

“I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.” – Michael Jordan

It also seems that the older or longer ago a person lived, the more difficult it is to imagine that historical figures are people too. They are just like you and I and they too needed a mentor.

Strongest Symbol for Non-Violence in the 20th Century

There aren’t too many people that have had a more profound effect on the world than Mahatma Gandhi. Gandhi, like you and I had a mentor, Dadabhai Naoroji. Dadabhai helped start the Indian Independence Movement in 1857 and Gandhi was able to complete the task on August 15th 1947 which handed the country of India back to it’s people. This movement was the first and largest non violent resistance the world had ever seen and involved 50 million people within India. This all came from a person who had limited success starting a law practice in Mumbai and was also turned down for a part-time teaching position. While not being a direct mentor, Gandhi has been noted as an inspiration for Martin Luther King and Nelson Mandela among others.

Richest Person in the World

It’s difficult to imagine that one of the most successful investors the world has seen was mentored at one time. In fact, Warren Buffett was mentored by Ben Graham while at Columbia University. Buffett celebrates Graham’s book, The Intelligent Investor, as the greatest book on investing ever written. It’s interesting to note that Ben Graham once owned a small insurance company you may have heard of before, GEICO. Apparently Ben Graham taught his student well as Warren Buffett now owns GEICO.

Most Admired Person for the 20th Century

Mother Teresa committed her life to God through good works and truly helping others. Instead of living a comfortable life in a convent, she decided to live among the poorest of the poor and help them even though she had no income to speak of. Mother Teresa received permission from the Vatican to start Missionaries of Charity. It started with 13 members to help the hungry and homeless - those shunned by society. Today, there are more than 4,000 nuns operating orphanages, AIDS hospices, and various charities worldwide. She led a remarkable and revered life, but she may not have achieved all that she did if it weren’t for her mentor, Father Michael van der Peet.

Greatest Basketball Player

Michael Jordan is arguably the best basketball player to ever play the game. LeBron James and Kobe Bryant might think otherwise, but they are referred to as “the Next Jordan”, not the other way around. Michael Jordan was a great player, having earned Rookie of the Year, but it wasn’t until he was joined with his coach and mentor, Phil Jackson, that he flourished. Under Phil Jackson’s first year as coach of the Chicago Bulls, and the help of young players Scottie Pippen and Horace Grant, Michael Jordan and the Bulls were able to win their first NBA title. Michael Jordan amassed 6 NBA titles and became the most decorated NBA player ever under Phil Jackson.

What do you want to achieve? It’s probably not as difficult as you think.

“If you think you can do a thing or think you can’t do a thing, you’re right.” – Henry Ford

You’re only limited by what you think is possible. Figure out what you want and then find someone who’s done it. Get a mentor, ask for their counsel, become comfortable with what they’ve done, and then make it your own.

Photo by Vincent

Other Posts
Carnival of Personal Finance #199
Rich Life Carnival #19 - Money Blueprint Edition
5 Steps You Need to Take in Preparation of Being a Mentor/Protege
10 Things to Look for in a Protege
10 Things to Look for in a Mentor

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5 Steps You Need to Take in Preparation of Being a Mentor/Protege

Posted by Dustin 6 April, 2009 (6) Comment

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This is the fourth part of a five part series.

1. Want to Be Successful? – Get a Mentor
2. 10 Things to Look for in a Mentor
3. 10 Things to Look for in a Protege
4. 5 Steps You Need to Take in Preparation of Being a Mentor/Protege
5. World’s Greatest Mentoring Relationships

Whether you are interested in being a mentor or a protege, there are some steps that you should take before entering into this sort of relationship. One thing to keep in mind is that no mentoring relationship is the same. All mentoring relationships are unique.

1. What Do You Expect – Before setting out to do anything, you need to consider what you want to accomplish. This goes for mentoring or just about anything in general. If you are a mentor, are you looking for pass on specific knowledge? For a protege, what would you want to get from a mentoring relationship? This step is most important and expectations or goals should be known by the mentor and protege. I would suggest that the expectations be SMART, but that is ultimately up to you. Remember that mentoring is a relationship, it’s constantly growing and changing course, and nothing is set in stone.

Personal Story

As I mentioned in my posts, I have a FOREX mentor. She actually approached me. I really didn’t know anything about FOREX trading and had no desire to learn. After she initiated the contact, I read a about the subject. It sounded interesting, but I still wasn’t sure what she would be doing exactly. She explained that she would spend as much time with me as I wanted using Skype. After speaking with her on a separate occasion and saw that she wasn’t trying to make money off of me, I was all in.

I am now trying to find the same sort of mentoring, but in real estate investing. I think I may have found one and look forward to sharing my experiences when I do.

2. Assess Skills and/or Experiences – Before entering into a mentoring relationship, the mentor and protege need to assess each other’s qualities to ensure a good fit. There are many ways to do this such as by exchanging resumes or cover letters. The cover letter should obviously be geared towards the potential mentoring relationship. You may want to include your goals for the mentorship. Another way to assess the potential mentor or protege is to actually meet. It’s preferable that this is a short meeting. You are basically trying to get a feel for the other person and see if they’re going to be a fit or not.

3. Be Prepared to Retract – If after exchanging resumes/cover letters and possibly meeting with the person, you may find that you two are not a match. That’s OK. It’s better to find out ahead of time before much time is invested. Whether you are a mentor or a protege, you want to make sure that you’ve found a good fit for you. If both parties aren’t fully committed or compatible, move on. A mentoring relationship can be as rewarding as you want it to be!

4. Set Boundaries – Think about how personal you want to get in your mentorship. Perhaps a protege is mentoring under someone to mentor them in starting up a business. Many people are really “tight lipped” about their finances. How detailed does the protege want to get with their finances? Is this instance, it might be crucial for the protege to disclose his or her finances, but this is a boundary that the mentor/protege needs to think about. Related to that, does a protege disclose a possible partner’s financials? Be sure that you are very clear with your mentor/protege from the beginning about boundaries. It would be a real shame for spend a few weeks with a person and then come to a halt due to a boundary that wasn’t discussed, but is crucial to the process.

5. Why Do You Want to be a Mentor or Protege? – Perhaps, if you are a potential mentor, you want to pass on your knowledge to others. In fact, you may even be so inclined because you feel like you owe society because someone was generous enough to mentor you in the past. For a protege, maybe you want to hone a particular skill. Perhaps you want help in a broader sense, such as personal development. Whatever your position, figure out why you want to be a mentor or protege. I know that’s one of the first questions I’d ask if I was interviewing a prospective mentor/protege.

Have you been a mentor or protege before? Did you do anything to prepare for the mentorship?

Photo by: Marina Cast

Other Posts

First Edition of the Carnival of Pecuniary Delights
10 Things to Look for in a Protege
10 Things to Look for in a Mentor
Want to Be Successful? - Get a Mentor
5 Reasons Why You Should Have a Store Front


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