Trading Update (December 2015)

Second month into my Forex trading. Things did not go well and I had lost a huge chunk of my trading investments. Although it is going to be tough, I will continue to press on. Looking at what went wrong, learn the lessons and move on.

Trading did not go well for my Forex. I have lost a huge chunk of my initial investment. The amount that I have left in my account is currently at 1,257.76. Lost a total of $3,742.24 or 74.84% of the initial investment. Not a very good way to start off my trading journey.

What Happened?

One important step to do in investing and trading is to review the trades, whether they are successful ones or those that we lost. Review of trades is overlooked by many investors and traders as many feel that we should quickly move on especially for the ones we lost. However, the importance of trade review allows us to understand what did we do wrong, why did the trade moved against us and finally how we can do better.

The first month I started trading Forex again, I closed the month down by around $1,500. That left my account with around $3,500.

In December, during the period when Fed was announcing the interest rate hikes, there were opportunities to enter new positions and very soon, I had opened up 5 new positions totalling up to 20 lots. With each lot at 0.5 mini, I had unknowingly opened up 10 mini-sized ($100,000) positions.

With Oanda’s margin requirements 2%, the total margin that I will require for the 10 mini-sized positions will be $2,000. Because of the volatility during December, very quickly the positions started going negative and all my positions were soon liquidated due to margin call.

Lesson Learnt

One important lesson, and a very basic one, that I had learnt from December’s Forex trading. Never over-trade.

Wanting to earn from Forex trading fast enough requires opening of minimally mini-size positions. Being a double-edged sword, price movement can move very fast with or against you. If it goes against you, very soon you will be facing a margin call and lose a huge portion of your account.

Always understand what is the kind of positions that your account size allows you to take. It would be better to earn slower than to over-trade and risk getting margin calls.

What is Next?

I will not be putting more money into the account (until I think I am ready to increase my position size). I will be carrying on with the $1,200 account size, opening nano-size positions to polish up my trading and building up my account size from there.

Trading Update (November 2015)

One month past very fast after I started my Forex trading. A simple update on how my Forex trading is doing while I am still thinking of how to present the trading results in future.

Starting off in November, I will be doing some trading (see reasoning here). This post shall be the first update on my trading journey. As I have not given a thought on how should I present my results from my trading, the formatting shall be firmed up while I go along.

My Initial Investment

After thinking through and making some calculations, I decided to invest $5,000 into trading Forex. I have opened an account with Oanda, made the transfer of the funds and started off my trading in Forex again.

Journey So Far

My trading journey in Forex did not start off in a good way. Made a couple of small mistakes and lost around $100. However, the “killer” was two of my trades in NZD lost around 750 pips each!

I had some good trades profiting a total of around 1,350 pips but because I was only starting off, I trading with only 1 micro lot which meant the profit was around $135. Just when I upsize my trades to 0.5 mini per lot, I lost the two “killer” trades which not only returned the profits in the start, I was down by $615.

After the loss of the two “killer” trades, I had a series of losing trades while trying to “revenge” the market by trading on the hourly and below timeframes. Very soon my account was down by $1,500.

The Bottom Line

After the two “killer” trades, I total lost my sight of my trading plans and started to go back to the trading pattern which cost me dearly in the past. Luckily, or unluckily, I had managed to see the problem fast and it did not wipe out my entire initial investment. Shall remind myself of the trading plans and restrict myself in doing “revenge” trades again.