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

Posted by Dustin 16 April, 2009

459207903_d5ce64f14a_b

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


------

Don't miss the next article, add our RSS feed
If you enjoyed this article, please Stumble it!
Follow me on twitter

Categories : Entrepreneur Tags :

Comments
April 16, 2009

Good numbers, eh? ;)
Trading was always forbidden zone for me. I realized there are way too many variables to control it. Seems like you are doing pretty good in controlling it ;) . That is good.

Alik Levin | PracticeThis.com’s last blog post..Protect Your Blog Or Get Hacked Like PracticeThis.com Was

April 16, 2009

Hey Alik!

Thanks for the comment. Forex trading would definitely be overwhelming if it were not for my mentor. It’s all about having the right map so I don’t get lost.

Dustin’s last blog post..Case Study: My Adventures in Forex Trading (Update: 4/16)

Posted by Dustin
April 17, 2009

Dustin,

Way to go!

A real gain of $99 is certainly a start, but your ‘paper’ gains are even more impressive.

Isn’t it funny how much easier it is to be brave when not playing with real money?

Andrew’s last blog post..How 35 workplace deaths were exposed in an internet chat room

Posted by Andrew
April 22, 2009

Looks like you’re doing well Dustin, do you have plans to start doing this with real money? Some of my best friends do this for a living…

Cheers,
Glen

Glen Allsopp’s last blog post..8 More Things to Stop Doing Right Now

Posted by Glen Allsopp
May 7, 2009

Hi Dustin, $99 is certainly better then a lose of any type. I can’t wait until I have more time to learn about investing.

Posted by Stephen Fryer
May 8, 2009

Way to go Dustin! It’s all about the learning process, and not getting too emotional, isn’t it? :)
Nathalie Lussier’s last blog post..Gratitude Monday #5: Changes Edition

Posted by Nathalie Lussier
May 10, 2009

Good work, keep it up, hope you make lots of money.

Cody Dream-Life-Coaching’s last blog post..7 reasons you may be failing

June 29, 2009

Hi Dustin! Seems like it is going good! Keep up the good work, and keep posting! This is good motivation!

TradeProfits’s last blog post..Contest over at Forex Peace Army

Posted by TradeProfits
July 4, 2009

Demo trading is actually good for sometime but becomes a stuck in a fantasy world of so many cash.I usaully tell myself ,that instead of waisting time to on demo I should do the magic on my live.what gives me joy is withdrawing from my forex account.If you are interested in seeing my trade performance you can reach me through my ID preschinfx@yahoo.com I wont say much but I know I had built an account of $9000 to $35000 in nfew days,$4000 to $12000,$5000 to $10000 in just few days. my trade histories speak for me….

Posted by chinwo precious
July 4, 2009

if you want me manage your account for you ,you can equally reach me but for such accounts I start with 100k .You will be surprised how much I can make for you.

Posted by chinwo precious
July 7, 2009

A case study in inevitability.

You will have moderate success with your “never take a loss” system until the market takes a large swing. You will then be wiped out by a black swan.

As the LTCM boys found out, “the market can stay irrational longer than you can stay solvent”.

If it makes any difference I am a professional trader with a background in statistical arbitrage and quantitative analysis. Save yourself some money and read about outlaying market phenomenon and start using stop-losses. Loss management, not avoidance is the key to increased profit.

Profit=%Win*AvgWin-(1-%Win)*Avgloss

Where %Win= #of profitable trades/#of total trades

AvgWin=Total profit/#of profitable trades
AvgLoss=Total Loss/#of losing trades.

You can see from this that the only variable directly under your control is AvgLoss.

Think about it, if all it took to win was to never lose, then there wouldn’t be much to the game would there?

Posted by Mr.Danger
Leave a comment

(required)

(required)