Case Study: My Adventures in Forex Trading (Update: 3/16)

Posted by 16 March, 2009


Wow, already a month since my last update on my forex trading adventures. Here is a link to my previous two updates to note my progress:

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

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

Before I comment on current progress, let’s recap what the above numbers mean. This is a demo account which started at a value of $15,000. I am being mentored by a person who trades Forex full time. She has been trading for 8 years and full time for 6 years. I speak with her daily through Skype. Her trading style is such that she doesn’t take losses. She waits for the trading pair, EUR/USD in her case, to become profitable before trading. You’ll notice that my balance and equity are far apart. Basically, the balance is how much I’ve made from trading above the $15,000 mark. The equity portion is lower than $15,000 because I have trades that are currently not profitable giving me an equity position less than my original amount, $15,000. I currently have four trades that are not profitable. Three of the trades I’ve had since the first week that I began trading. The other position is from a trade I executed last Thursday or Friday.

What does all of this mean?

An equity position of less than $15,000 means that if I were to “cash in my chips”, I would actually lose money on the entire deal. However, that is not how I learned to trade. I will wait until the trade is positive.

New Balance and Equity Numbers

Account Summary 2/15/09-3/15/09

Beginning Balance 16,768.40
Comm Trading Commission 0.00
Rollover Rollover Fee 15.50
PnL Profit/Loss of Trade 1,187.30
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 17,971.20
Floating P/L -2,855.00
Equity 15,116.20
Necessary Margin 300.00
Usable Margin 14,816.20

For the past month, I’ve profited $1,187.30. Again, if I were to close my account and put all of my trades in, I would be positive, but not by a whole lot. As a matter of fact, I would be positive $116.20 as of the night of 3/15/09. So, why is this significant? Well, for starters, this is the first time I’ve had a positive equity position. I am therefore more likely to have a positive position in the future and will look to even increase it by a larger amount. There are three possible scenarios for my account. If the market holds at the same relative position, give the past performance of the last three months (~$1000 per month in gain), my account would increase by $1000.00. The other scenarios are that my three negative trades would either become less negative and even positive leaving me with even more gains, or I will only be slightly positive next month (assuming I stay on the trend of making ~$1000.00 in trades every month). None of these scenarios are guarantees by any means. My mentor, nor anyone else knows what the market will do. The pundits are predicting an upward trend for this week for the EUR/USD pair, but none of the pundits predicted the market crash late last year either so we’ll see.

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

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March 16, 2009

OK – You got my attention with this post. Thanks for stopping by my site BTW. I have always been curious about Forex trading but have stayed with trading in the money options instead. Where did you find your mentor? I am extremely interested in your progress and look forward to reading more in the future.

pfincome’s last blog post..Recession in America – Gardening

Posted by pfincome
March 17, 2009

I am definitely enjoying your adventures in forex trading! It is an interesting — and volatile — pastime. And with all trading, it is important to understand how it all works. You don’t actually lose until you exit your position.

Miranda’s last blog post..How Long Will Others Hold U.S. Treasuries?

Posted by Miranda
March 17, 2009

I’ve never heard of forex trading before this post, but it definitely sounds interesting. I like how you think positive. If you cash in your chips now you’ll take a loss, but you refuse to do that because you are in it to succeed.

Karl Staib – Work Happy Now’s last blog post..Professional Growth the Google Way

March 18, 2009


This is my first visit to your site. I am also new to Forex — have taken two classes and have been trading w/ a demo account for 18 days. With a $10K account, I am currently at $15,434.00, with 4 open positions slightly in the negative. My method of trading is scalping — (day trading) and I am finding it to be very interesting thus far. I was actually up to $16,000,000 in my first 10 days but started to deviated from my method, and opened about 8 positions at one time, and lost about $5,500 in one hour. I essentially got zapped and had to start over w/ my $10K. I was experimenting because I wanted to test the boundaries. Since my fall from grace I racked up another $5,000 in 5 days building it back up to $15,000+. I am earning between 60-100 pips per day.

I am hoping to make more mistakes and also to learn from others before I start using real cash. If anyone has any insight to offer (tips, case studies, education, etc..) I would be most interested.


Posted by Joseph Perez
March 18, 2009

@ Pfincome – I actually found my mentor through Linkedin. Funny how that works out. I’ve been very happy in the 3 months I’ve been with her. There is one thing I do want to make clear, I am in no way compensated for referring her (sorry, wanted to get that out of the way). Thanks for the comment and glad to hear about your interest!

@ Miranda – You hit the nail on the head. I think that’s one of the big differences between my mentor’s methods and other people. She doesn’t take losses. If her margin is not in a range she is comfortable with, she offsets the buy or sell with a sell or buy respectively.

@ Karl – Thanks Karl! Well, I can’t take credit for it. It’s actually my mentor’s way of forex trading. It’s a bit different than the way other people trade, but she’s been doing it full time for 6 years so she must be doing something right!

Dustin’s last blog post..Case Study: My Adventures in Forex Trading (Update: 3/16)

Posted by Dustin
March 19, 2009

I tried opening up a forex demo account once and got lost immediately. Finding a mentor as you did would be a huge help to learn the trading language and appropriate actions. I’m comfortable with stock trading, but forex seems like another animal completely. I’m still confused about how your mentor doesn’t take a loss? What if a positive trade opportunity doesn’t exist?

Scott @ The Passive Dad’s last blog post..Can’t Make Up Your Mind? Call A Frugal Friend

March 22, 2009


Great question. Well, my mentor trades s bit differently than any of the other forex traders I’ve spoken to or read about.

I’ve had trades in since the last week of December that only recently became profitable so I took them out. Typically, if people trade forex, they tend to trade more winners than losers to make a profit. My mentor just simply waits for the currency rate to come back into favor.

I hope that makes sense!

Dustin’s last blog post..5 Reasons Why You Should NOT have a Store Front

Posted by Dustin
April 3, 2009

The Forex market is a non-stop cash market where currencies of nations are traded, typically via brokers.

Posted by traders india
Posted by jee
January 3, 2011

Forex trading is potentially very rewarding, but unfortunately most successful traders blow their bankroll at least once before they eventually become profitable.

You need immense discipline, good money management skills (ie cutting losses early, letting winners run, etc) and a profitable trading system.
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