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Tiny Trading Account Challenge Day 5: +$72.61

Tiny Trading Account Challenge Day 5

January 12, 2018

After experiencing a setback during Day 4 of the Tiny Trading Account Challenge it was important that I ended the trading day without making any major trading mistakes.  This is much easier to do when taking one or two trades each day, week or month.  It’s much more difficult to do with a high level of trading activity that spans multiple trading sessions.  The more consecutive winning trades that a trader realizes the easier it is to become lackadaisical and assume that trades will continue to go your way.  However, since I’d just encountered a big loss yesterday, capital preservation was at the forefront of my mind.  Fortunately, I prevailed and recovered over 50% of what I’d lost yesterday, ending the day with a $72.61 gain and once again putting my Forex trading account balance above my initial balance.

Minimizing reactionary behavior is critical to my success in this challenge.  My game plan going into the trading day was to focus on buying the Euro and selling the U.S. Dollar and Australian Dollar.  Profits were realized from buying the EUR/USD, EUR/AUD, and selling the USD/CAD.  I had one losing trading idea, which was selling the AUD/USD.  Although the Australian Dollar was weaker than the Euro, it was stronger than the U.S. Dollar.

Almost an +8% profit in one day is nothing to sneeze at, and still yet I left a significant amount of profit on the table.  The upper blue ticker mark reflects my profit target on the EUR/AUD.   This is my favorite type of trade, where I buy or sell on a retracement.  My trade entry was great and I had every intention of staying in the trade until my profit target was hit.  However, the following two reasons played a factor in my decision to exit the trade early:  1)  I didn’t want to give back my unrealized profits considering yesterday’s loss, and 2) the Friday New York session doesn’t usually result in a follow through to profit targets.  I figured that a bird in the hand was better than two in the bush.

Tiny Trading Account Challenge Day 5 Extraordinary Trading
EUR/AUD Tiny Trading Account Challenge Day 5

I ended the trading week with almost a 3% profit.  This is a great return, but less than what I need in order to hit my goal of growing a tiny Forex trading account from $1,000 to $100,000 within a 1 year period of time.  In order to get back on track I’m going to need to take on slightly more risk until I fully recover my Day 4 loss and get back to where my profits should be at this point in the challenge.  Another day or two with profits similar to today’s gains will put me right where I need to be in this challenge.

Watch this video to learn more about the trades that resulted in nearly an 8% gain on Day 5 of the Tiny Trading Account Challenge.

If you’d like to be notified when my Tiny Trading Account Challenge blog posts are published follow me on Facebook and Twitter.

You can watch the full video series by adding the Tiny Trading Account Challenge Playlist to your YouTube account.

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Tiny Trading Account Challenge Day 4: $-131.11

Tiny Trading Account Challenge Day 4

January 11, 2018

Don’t let your losers exceed your winners.  It’s a cardinal rule that traders have heard many times and for good reason.  Reasons like today when I allowed one good, but poorly executed trading idea wipe out all of my gains from Days 1-3.

On Day 3 of the Tiny Trading Account Challenge I was feeling really good about my progress as I’d already put myself ahead of my planned gains by approximately one day.  However, my eagerness to build a cushion to help keep me on track during the inevitable choppy trading periods resulted in me taking on too much risk.  I then closed out the trade at a loss at about the worst possible price and reversed directions compounding my overall loss.  Fortunately, price consolidated for a number of hours allowing ample time for me to reassess and come to the conclusion that I should have stuck with my initial trading idea.  I closed the short trade and reversed just in time to profit from a large bullish move, recovering approximately a quarter of what I’d lost.

Today’s loss is certainly a setback, but not one that’s insurmountable.   My estimate is that it will take me until the middle of next week to climb out of the hole that I dug and put myself back on track towards my goal of growing a tiny trading account from $1,000 to $100,000 within a 1 year period of time.

What Contributed to My First Losing Trading Day

  • I bought into a bull trap
  • I took on too much risk
  • I placed too much certainty in price taking the path of least resistance
  • I second-guessed my analysis and closed my winning trading idea at a loss
  • I reacted to price by reversing my trade and not sticking to my game plan

In the following video I review the Forex trade that resulted in my first losing day of the Tiny Trading Account Challenge.

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Tiny Trading Account Challenge Day 3: +$40.98

Tiny Trading Account Challenge Day 3

 

On Day 3 of the Tiny Trading Account Challenge I profited $40.98.  This is more than double the profit that I needed to generate today towards my goal of growing a small trading account from $1,000 to $100,000 within a 1 year period of time.  As mentioned in my Day 2 post, I am working on building a reserve to get me through the more challenging trading cycles and this is the type of day that I needed.

Similar to earlier in the week this was a day when trades that were opened during the New York session did not close until a subsequent session.  It’s a known market cycle.

Watch this video to learn more about Day 3 of the Tiny Trading Account Challenge.

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Tiny Trading Account Challenge Day 2: +$22.51

Tiny Trading Account Challenge Day 2

January 9, 2018

On the second day of the Tiny Trading Account Challenge I focused on building a cushion on my trading account.  The Forex market continues to show a nice range of pip movement presenting an opportunity for me to gain some additional profits, so that when another choppy market cycle rolls around I can scale back on my trading activity.

Actions That Contributed to a Profitable Trading Day

I chose to take trades across all 3 Forex sessions.  This worked out well, because sometimes the trade setups that form during the New York session don’t follow through to the next level of major support or resistance until the Tokyo, London or even the following New York trading session.  Knowing this, I decided to enter some trades during the New York, Tokyo, and London trading sessions with the expectation of  some of them being closed prior to the end of the upcoming New York trading session.

As expected, I realized profits on a number of trades before the start of the New York session.  Icing on the cake was that I’d generated enough profit from those trades to hit my daily tiny trading account profit goal.  At this point I could have stopped trading, but for reasons mentioned previously I decided to carry my trading activities into the New York session.

Tiny Trading Account Challenge
Tiny Trading Account Challenge Profit/Loss 01-09-2018

Although the opportunity was there for me to gain significantly more than a $22.51 profit, this is Forex that we’re talking about, which tends to be highly volatile and I’m trading on a 1:50 leverage account, which can work for or against me as a trader.   I choose to use leverage to gain small incremental profits towards my $100,000 goal.

To see a review of some of the trades that I closed during Day 2 of the Tiny Trading Account Challenge watch the following video.

 

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Tiny Trading Account Challenge Day 1: +$23.16

Tiny Trading Account Challenge

Over the past couple of years I’ve been hearing about tiny trading account challenges.  This is when a professional trader starts out the year, month, etc. with a micro trading account and grows it to a significantly larger size within a specified period of time.  The concept is along the same lines as trading contests, which have been around for forever, but instead of competing against other traders you’re competing against yourself.

The idea is to set a stretch goal — one that is attainable, but challenging to reach.  In my case, my goal is to grow a tiny trading account from $1,000 to $100,000 within a one year period of time, starting January 8, 2018.

Trading challenges caught my attention, because for years I’ve been talking about the financial benefits gained through compound interest and consistency.  And for us traders, it is compound interest and not excessive leverage that is the secret sauce when it comes to growing a trading account.

Day 1

My first trading day had ideal trading conditions and is exactly what I needed for a great start.  If we continue to see a wide range of pip movement in the coming days this should allow me to start building a reserve to get through the inevitable choppy trading periods.

I finished my first day with a $23.16 profit on my tiny account from one trade, which I reviewed in this video.

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Forex Trading: Why You Need to Protect Your Playbook




Most Forex traders know that there is no central exchange in Forex, but I don’t think that many understand what this means.
 
Unlike stocks, options and futures where your trading orders are routed to a central exchange and clearing house this does not exist in Forex.
 
The majority of Forex trades that are executed never leave your broker’s computer systems. Your trades are either put up against another trader(s), a business partner (market maker) or the broker themselves.
 
For this reason, I have been gradually changing my stop loss management approach across all of my styles of trading  as mentioned in a previous post on Facebook. If you think about it, many traders are simply handing over their playbook to a broker who can sway things in the favor of their business partner or their own counter trades. After all, who’s more valuable, the trader who’s going to be around for a month or two or the long-term relationship with a business partner/market maker?
 



If you’ve been following me for the past several years, you may have saw me post a screen shot years ago (since deleted), where a broker increased my spread to 100 pips during the rollover from the New York to Sydney/Tokyo session. They came up with a lame excuse for doing this and then during another instance increased my spread to 150 pips.  
 
Think about how slight or major adjustments to your spread can cause you to get stopped out or miss your take profit level. I’ve had many instances of this occur over the years and it adds up to a nice profit for your broker and their business partners.
 
A game changer for me is when I started setting audible alerts on my trading platform and cell phone at price levels prior to my take profit and stop loss prices. Once the alert triggers I start monitoring my trades more frequently, which can result in either an early exit prior to my profit target or preserving my capital during a stop loss run or price spike.
I was once a naive trader, but the more that I learned about the industry, I started to realize that the inexperienced trader is prey in the midst of a hungry pack of wolves.
 
Some food for thought and more on this topic in a future video.
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Nearly a Dozen Doji Candlestick Patterns in One Day: Backtesting Exercise




Nearly a Dozen Doji Candlestick Patterns in One Day

Last week I posted to social media that the Forex market had formed nearly a dozen doji candlestick patterns on the Daily chart. When this occurs traders should take notice, because it only occurs 2-3 times each year. When nearly half of the most commonly traded Forex pairs form a doji candlestick pattern it’s time to pay attention, because either the market is reversing or offering an opportunity to rack up 150+ pips in a short period of time from a counter-trend trade.

Continue reading Nearly a Dozen Doji Candlestick Patterns in One Day: Backtesting Exercise

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Is It Time For NZD/CAD Bears to Take Profits




Is it time for New Zealand Dollar / Canadian Dollar (NZD/CAD) bears to take some profits?

The NZD/CAD has been in a downtrend for the U.S. summer months.

The pair is  currently down approximately 700 pips since the bearish decline started towards mid June 2017.

Traders who caught the entire downward move racked up some handsome profits.  However, as with all financial markets, price doesn’t only make lower lows, in the case of a downtrend, there are also periods of consolidation or pullbacks.

Most recently NZD/CAD traded in a range from mid July through mid August before breaking out of the range a couple of weeks ago and resuming the downtrend.

NZD/CAD Daily Chart

Traders who caught the most recent bearish drop and stayed in the trade until hitting a major level of support racked up over 200 pips in profit in less than a 2-week period of time.

The pair has recently hit a major level of support in the .9030 area. Traders who are short the NZD/CAD may want to consider taking some profits or exit their NZD/CAD trade all together.

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Forex Trading Opportunity – August 24, 2017 (AUD/USD)

AUD/USD Trading opportunity




An intraday trading opportunity has developed on the Australian Dollar / U.S. Dollar (AUD/USD).

Individuals interested in taking this trade, should consider getting short in the .7875 price range with a profit target of .7850.

The current price is approximately .7874 and this trade is expected to reach target within the London or New York session.

The current time is 6:34 AM(UTC) and 2:34 AM (EST).

Traders should be cognizant of the time of this posting as to not enter this trade late at which time price could be moving to the upside.

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Forex Trading Idea: Week of August 20, 2017 (NZD/CAD)




Forex Market Strong and Weak Currencies

As we kickoff the New York session the Swiss Franc (CHF) is showing strong intraday bearish momentum.  The currency is down -0.13% since the start of the trading week and has recently retested the 1.0391 resistance level (futures).

The Japanese Yen (JPY) has strong bullish momentum going into the New York session.  JPY is up 0.22% for the trading day.

The following list of currencies are down since the market opened on Sunday:

  • Australian Dollar – AUD
  • Canadian Dollar – CAD
  • US Dollar – USD
  • Swiss Franc – CHF

The following list of currencies are up since the market opened on Sunday:

  • British Pound Sterling – GBP
  • Euro – EUR
  • Japanese Yen – JPY
  • New Zealand Dollar – NZD

Trading Idea

The following trading idea has been developing for the past several hours and presents an opportunity to take advantage of New Zealand Dollar (NZD) weakness.   The NZD has been trending to the downside for the entire month of August following disappointing Employment Change numbers reported at the beginning of the month.

Bearish New Zealand Dollar (Daily Chart)

Bearish New Zealand Dollar

Traders looking to get short the New Zealand Dollar may want to consider taking an entry off an area of resistance for the New Zealand Dollar / Canadian Dollar (NZD/CAD)

 NZD/CAD Resistance Level (1-hour chart)

Potential profit targets for the NZD/CAD bearish trade are as follows:

Support Level #1:  .9155

Support Level #2:  .9115

Note: This is not an intra-session trading idea.  Those who take this trade should expect to be in the trade for hours or possibly days.  

Learn How to Identify Levels of Support & Resistance