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