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:
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
|PnL||Profit/Loss of Trade||1,187.30|
|MargInterest||Interest on Usable Margin||0.00|
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.
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