When I say this to you, it's your turn to reply back and say "Pips be with you too!"
I haven't gotten that much replies back since the PIPS have not been with me this week. Or maybe they have been with me but on the negative side. huhuhu
Reckless Trading
The start of this week is the most bloody experience in my Forex trading life. I have been trading recklessly. I thought I wouldn't be susceptible to emotional trading given my experience in stock trading, but I was wrong. At one point, my usable margin was down at only 40% of my account and I had lots of several positions open at one time. Every time one of the trades goes against me, I kept thinking about whether I would get called on margin. Suffice to say, I didn't sleep very well last night.
The nightmares have started.
My mentor (Mark So) is after all, only human. He does commit mistakes as well. This week's trading strategy was to buy the USD. As it turned out, the EUR was really strong early this week and the US Dollar was battered.
I made a commitment to try and stick to my mentors recommendations for August and so I did. To be fair, my own analysis also showed that USD is strong this week. Deliberately though, I ignored the fact that my analysis also showed that EUR could be stronger this week as well.
So as not to contradict my mentor, I only placed trades that were align with his recommendations.
Trading the News
This week I learned the hard way that news involving the Aussie Dollar (AUD) and the New Zealand Dollar (NZD) don't affect the currencies that much.
There are news were the weakness or strength are already PRICED IN. So when AUD data came out weak, the AUD on the contrary rallied. Unemployment data for New Zealand was also worst than expected, but this didn't have much effect on the currency. I guess NZD is still strong because it's still the currency with one of the highest interest rates. Investors buy the NZD for carry trading (interest trading), especially this week when the USD is weak (there is Greed in the market).
Market Sentiment
The market is definitely confused. I'm not really sure if greed or a Risk On market is present especially since news about tapering by the Fed is positive - they will taper by September or any time 4th quarter this year. This should have spurred a buying frenzy of the USD.
Performance
And so I'm learning to trade Forex the bloody way. My only consolation at this time is the fact that in every venture I've gone into, I've always managed to come out at break even or even better. I'm not giving up. I'm determined to succeed in trading Forex for life. They say only 2% of Forex traders actually make money, but that's 2% out of probably billions of traders! So while the odds may be low, I know I can be one in a billion.
Still have 2 open trades so I don't have the exact numbers for now but in just 3 days I've managed to lose about 200 *insert expletive here* USD! Account equity is down to 689 USD. This can go lower because I haven't really closed out my trades. (I'm praying and hoping that it won't though! hahaha!)
Cutting loses is not easy! And I'm probably not suited for long-term trading. Once my account loses about 100 PIPS I go berzerk! I just can't stand it, especially when I haven't reduced my regular lot size purchases to accommodate such huge stop losses.
Oh well, it's just one of those trades. Hopefully I'm 200 USD smarter and more experienced. The opportunities are endless, it's time to move on to the next trade. (That is, after I take a short break from trading to clear out the mind first.)
Time for a happy fix! Blizzard ice cream it is! Yum!
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