LearningToPimpPips trading Journal - "Additional Stream of Income"

[LearningToPimpPips]

Introduction

first things first...I'm a believer that the only way you make actual goals become real is to write them down, communicate them, and make yourself accountable. I've seen so many acquaintences say, in retrospect, that "I've always wanted to do that", but never taken steps to actually make it happen. The way I make things happen is to write them down on paper to be clear on my goals.

Forex trading is my newest passion and my plan to an additional stream of income. I already have 2 (corporate job, in addition to owning 2 car repair shops), and want to add a third.

I came to forex through a spam message in my mailbox. For good reason, I turned down an opportunity to pay $3000 for a holy grail system. My journey then took me to investigating managed forex accounts, and then into education site to do it myself.

I ended up on babypips.com, and went through their educational section. Helped my grasp what Forex is about. However, that site tends to favor indicators and I wasn't a believer that there was a consistent way to make money doing that by relying on mathematical equation. I knew I needed to learn the intuition and principles...not a robot who would tell me blindly to do something. Through a video on youtube, I learned about forex4noobs.com.

I have been soaking up as much as I can about forex for the past 2 weeks. Looks like I picked a bad time to study in terms of doing active trading, as we haven't had a solid trade during this period of time. That however, may be a blessing as I have been able to learn a lot from reviewing every video on this blog since Jan, and absorbing as much as possible.

Goals:
I intend to become a Forex trader with a goal of 75 pips/wk during the first 6 months. Then my goal will increase to 100pips/week.

I will demo trade until July 1st to get comfortable with the GFT trading and MT4 trading platforms.

I will open a live account in the 2nd half of June with $1000USD, and trade 3% of my account at 100:1 leverage, primarily using the GBP/JPY pair. The $1000 initial investment is the reason for learning the 2 trading platforms as I will need to start with a micro account, and then move to a mini. Unfortunately, GFT doesn't offer micro accounts, so I will choose a broker using a micro account, and then transition to GFT once I have enough money to trade 2 mini lots and move to GFT (about $7000 mark).

I will not withdraw any funds from the account. My 3% trading guideline will increase as the funds in my account increase.

I officially started my formal demo trading on 5/19. This has been an exercise to learn to deal with the desire to "be in the market". I am being patient and not entering unless appropriate. I check the charts every 4 hours during the 8am to 10pm Easter time timeframe.

I will mainly use alarms, and automated trading overnight in the US on the demo account (primarily the early London trading session). My success or failure will determine if I start to get up at night to actively trade the positions during London time.

I look forward to sharing with you my successes and failures as I learn more.

[LearningToPimpPips]

First 3 days of demo trading...

no trades.

Current lines on my chart:
S/R 204.82, 201.80, 200.00

Scalp: 201.50. I removed 205.00 yesterday and decided to use the 204.80 S/R line.

[rogan]

Good luck and I look forward to reading your journal.

[Syres]

You have the right attitude and you've picked the correct lines. I personally won't trade 201.80 because while market has been away from it timewise, it had trouble last time it was crossed by price action. I don't trust this line yet until it shows more proof of being valid again.

Everything else you've got down suprisingly well when considering how little experience you have. I think you have the right approach. You really have done your homework well.

Great success to you!

[mackgren]

Who are you thinking of using for your micro account? I too don't really want to splurge $2500 initially for a GFT account even though I love there platform. Let me know please. Cheers! Mark

[Fetor]

Originally Posted by mackgren

Who are you thinking of using for your micro account? I too don't really want to splurge $2500 initially for a GFT account even though I love there platform. Let me know please. Cheers! Mark

Upon recommendation I closed my account last year with FXDD and went with a GFT mini account and a EFX account. I opened a GFT mini account with the minimum 250 and put the rest in my EFX account and then trade with EFX, but use GFT for the charts. I really like the combination personally. Just remember though that you need to make at least one trade every 60 days with GFT or your account will go inactive and there is a fee to reactivate it. The GFT account is a mini with 400:1 (EFX is 100:1), I'm not sure if GFT offers a micro account.

[LearningToPimpPips]

Originally Posted by mackgren

Who are you thinking of using for your micro account? I too don't really want to splurge $2500 initially for a GFT account even though I love there platform. Let me know please. Cheers! Mark

Right now I have a demo account with Alpari using MT4. I am still researching which broker I will go live with. I will post an update to this journal once my research is done.

It should be in the next few weeks.

[LearningToPimpPips]

Originally Posted by Fetor

Upon recommendation I closed my account last year with FXDD and went with a GFT mini account and a EFX account. I opened a GFT mini account with the minimum 250 and put the rest in my EFX account and then trade with EFX, but use GFT for the charts. I really like the combination personally. Just remember though that you need to make at least one trade every 60 days with GFT or your account will go inactive and there is a fee to reactivate it. The GFT account is a mini with 400:1 (EFX is 100:1), I'm not sure if GFT offers a micro account.

GFT doesn't offer micro, but I like their charts. Your $250 to keep the charts may be what I do in order to keep the package. I may also look into the australian broker that Nick uses to use Dealbook, but not with GFT.

[LearningToPimpPips]

OK...trade updates...

Good thing I'm demo trading as I am still learning to use the trading platforms.

GFT account:
Balance: 2500

Apparently with my playing around and seeing how things work in the Dealbook/GFT demo account, I inadvertently left a short sell open last night at 203.05. No reason to have a trade here as there are no lines. There was no stop loss or Take Profit assigned to the trade, so the position was closed at 204.85 (margin call?).

The loss was -1728.54.

New balance 771.46.

Also, I learned that this demo account doesn't have the ability to trade mini lots (or at least I need to learn how to do that. I'll be reasearching that with GFT today.

Until I figure out how to trade mini's on the demo, this account is essentially dead as I need 1,000USD to be able to buy/sell a standard lot.

Another option would be to have more funds inserted into the demo, but this is a temporary fix as having to trade a standard lot ($1000/lot) on a $2500 account is much higher money management than I would be comfortable.

At this point, I like the charting features of GFT better, but I am more comfortable placing trades and seeing positions on MT4.

Lesson Learned: Demo trading is valuable to get comfortable with the trading platform as if I immediately went live, I would be feeling more bitter than I already am.

I won't report on the pips/profit(loss) on this account yet as this was a PUBCAC error...Problem Exists Between Computer And Chair.

MT4 account
Opening Balance: 2764.27
1 std lot was bought at 205.00
1 std lot sold at 205.70

Pips made: 35 (70 pips on the first half)
Profit: 675.09

Pips running total: 35
Profit running total: 675.09
New balance: 3473.62

I opened another .5 std lot Long position at 205.76 with a stop loss at 205.10. This position is still open. I'll explain why in Lessons Learned.

Position open:
.5 lot long at 205.76

OK, 2 more lessons learned here and a validation.
Lessons learned
1) I only had one position set here, instead of 2. So the technique to to close 1/2 the position after 70 pips, and move the s/l to break even for the 2nd half couldn't be done. I learned I need to place 2 orders at a S/R line to
be able to accomplish this.


To workaround this for the current trade, I closed my full std lot after a 70 pip profit. And reopened a a half lot to simulate the trade if I had done it correctly the first time. I made the stop loss at 205.10 to account for having to pay the spread again so my break even will be correct. As I was typing this, the GBP/JPY is breaking the 206.00 line, so I updated my s/l to 205.35 (the halfway point). I'd rather lock in the pips, than retrace and hope for recovery. 1 pip in hand is better than 2 in the bush.


2) I inadvertently made this a full std lot instead of a .1 lot (mini). Given this demo account has $3000 in it, I will trade 1 mini lots which is about a 3.5% risk. A little higher than I would like, but close enough to shake a stick at. While it looks good to have a $600 profit on a trade in an account with 2700 in it (22% profit in 2.5 hours), it could have been a 700 loss if the retrace made it down to 204.30. I'll report the profit, but I'm not happy that I didn't enter the trade correctly and realize this worked out this time, but I'm still a noob.

Validation

1) I had this trade setup to go automatically and the position was opened at 13:36GMT (which is 0746 where I live). I was taking care of the kids at this time and not in front of the computer. I had my s/l at 70 pips, so it weathered the retrace from the line before breaking through stronger.

My plan to automatically fire overnight orders is OK so far...will need to keep close tabs on this plan.

Will update when I close my 2nd half position with the result.

[LearningToPimpPips]

Still in for half my full lot. Updated my s/l to 206.00 after the current high of 206.50 in the current 2000 4hr candle.

My logic on updating the s/l to this point is if the index retraces 50 pips to 206.00, I will have half my position closed for 70 pip, the other half at 100. This averages to 85 pips...accounting for the spread, this will be a 78 pip trade and my current goal is 75 pips/week. This will accomplish my goal and let me watch the market tomorrow without wanting to jump in.

I will continue to let the 2nd half ride to make more pips, but I am locked in right now to my weekly goal after only 1 trade.