Sky's 2 week Demo Results

[Skydaemon]

Gonna keep track of relative performance on my forex demo here.

Opened $5000 demo yesterday, played around and now it's a touch higher so that's starting point baseline.

Now that I got the mechanics figured out mostly gonna trade evenings and weekends and see what I can turn it into in 2 weeks. At the end of that I'll likely decide on whether to go for a real acct or not. If I don't get lazy I'm gonna push and see what I can achieve as a max.

But step 1, trade the demo 2 wks and see what happens. Anyone wants to leave pointers or make notes on what I do, by all means! Also, since I really have no guidelines what's considered a good return on active forex trading?

Day 1 starts in an hour when I get back from lunch @: $5400

[ForexWolf]

Originally Posted by Skydaemon

Gonna keep track of relative performance on my forex demo here.

Opened $5000 demo yesterday, played around and now it's a touch higher so that's starting point baseline.

Now that I got the mechanics figured out mostly gonna trade evenings and weekends and see what I can turn it into in 2 weeks. At the end of that I'll likely decide on whether to go for a real acct or not. If I don't get lazy I'm gonna push and see what I can achieve as a max.

But step 1, trade the demo 2 wks and see what happens. Anyone wants to leave pointers or make notes on what I do, by all means! Also, since I really have no guidelines what's considered a good return on active forex trading?

Day 1 starts in an hour when I get back from lunch @: $5400

Howdy & congratulations on testing out Forex. I think you will find it can be a fun, exciting and challenging market to trade in and it can be immensely rewarding and satisfying. I love it and do not trade anything else. I will be anxious to see your progress and I wish you well...

With that said...I will tell you this honest truthful fact straight up front: Success in Forex requires you to become a disciplined Trader..in mentality and in practice. Its a fact that over 90% of all Forex new traders will lose their real money account in 3 months from losses and surprises, if they do not do a few things first....

First--Demo and TEST, paper trade and practice out your trading methods and hone them to adapt to the volitile markets such as the currency markets. In my view--2 weeks does not give you a lot of exposure to how Forex works or the various "moods" the markets can swing into. I often suggest 3 months minimum of demo and paper trading before putting real money on the line and for making a decision if its for you or not. You could run into a great trend market and winning trades will be like pulling apples from a tree--but a week later you jump in with real cash (and often after a demo is over) the market changes and the swings change--and suddenly winning methods and trading turns into a ton of losing trades. Or you could find a crappy market and test out and get nothing--and get the wrong idea about Forex. It takes time to learn. But don't get overconfident too quick.. The key to winning at Forex is Consistency and Discipline. If you develp a method with a 70% win ratio--meaning you are right and make pip gains with 7 out of 10 trades--provided you do proper money management you will come out ahead at the end of 10 trades even if 3 are losers. If you don't manage well--3 losses could cripple you...

Second--learn the markets and the pairs you trade. Each pair has its own moods and actions/reactions to economic and fundamental influences and to other pairs. Some are regular pairs, others are commodity influenced pairs..but each moves differently to its own degree. I often suggest a trader spend one month exclusively on each pair you intend to trade and learn how it moves, how it swings, when it moves and why--look at no other pair--stick with one and learn it inside and out--see if you like it and it makes "sense" to you. If it makes no sense--why trade it. If you jump around from pair to pair without knowing the pair--you could find it moves very differently.. One pair may move 20 pips in a hard day of trading--another will move 200 pips on a sneeze in the same time period. Learn which are most volitlie and when. After several months of doing this, you will have learned several pairs from which to choose from as you trade and seek out opportunities. Also, each currency has its own reports it waits for every month...each pair has its own mood and volitility factors...each currency has its own influences for politics and non-economic factors and foreign relations--learn them to avoid being broadsided in a trade.

Third-practice good risk and money management for a realistic view of Forex Trading. If you are demo' testing a $5k account but plan in real life to use only $500 mini acount--you can get a false sense of security when you go to really trade. Many Forex Traders will tell you a risk of no more than 2% of your account on any trade is the best method-and I agree its a good starting point..but most new traders fail at considering this. If you are using $500 and with a 100:1 leverage to manage a $10k Lot size in a trade--you are putting $100 of your account up for that trade, which is really putting over 25% of your account at risk with only one trade. So make sure you take a realistic view of Forex in trading your demo.. The DEMO's you get from many brokers are configurable to how you really will trade if you set it up that way..otherwise they are a "tease" to novice traders, cause they give you a high $ account to play with and big leverage ratio and full size $100k lots.. and it really leads many novice traders into thinking that Forex is easy and the money is huge--YEs that is true the money is huge--but the trading is volitile, dangerous and must be disciplined in methods or you can really lose your shirt. It appears easy--but it takes a lot of practice. Trust me I know this--I blew out my live money account 5 times before I finally wised up / woke up and took things very disciplined in my approach.. Don't let a demo acount with $10per pip gain of 100 pips lull you into a sense of security or dreams of quitting your job tomorrow....the knife of leverage and margin cuts both ways and it takes practice to learn how not to get cut badly.. The larger the account you start out with--means the lower your risk percentage is per trade--the better in your favor. Don't jump in with real money until you have developed and practiced, learned and disciplined yourself to trading in Forex.

4th--Have a plan..trade your plan. Be disciplined in your trading--plan things out and look ahead. I plan everything--entry, exit, stoploss, validations, when I trade, when I plan--if I don't have a good reason for each its not a valid trade. Record your progress and take notes of how you do... Every trader has a bad habit or two--but in Forex one bad habit can kill 10 good habits you have. Discipline in Forex trading and planning your trades is a must...its very easy to panic in such a volitile market.

5th--Stop Losses are your friend--use them..and learn how to use them to your advantage and how to use them correctly. A properly place stoploss won't get hit in a good trade if you placed it properly...and it will save you from total devestation in a bad trade. Learn trade structure as part of using stops--move them to protect yourt account and risk exposure. Unless you like driving in heavy traffic without brakes on your car--always use a Stop loss. If you think stops are fir sissys or will limit your trading--just give your money to the first person you see at a gas station..cause you don't care about keeping it. There is no bad profit--and no excuse not to bank your winning trades and protect those profits. If you let a good tradse go on too long and it goes bad, that is as bad as not setting a stop to protect your account. Making pips is easy..its keep your winnings, and limit your losses that is the challenge. This market can be very volitile and dangerous--it can swing 100 pips or more in a matter of seconds on big news events.

6th--Know when to trade and when NOT to trade. Know what to expect from the markets.. If you take a EUR/USD trade at 4pm EST and expect to see it run 100 pips in two hours--forget it--you're at the end of the NY session and beginning in the Asia session and in the wrong market.. If you take that same trade however at 3am in London and hold it thru til New York opens--yes you can expect big moves like that. Learn your markets.. If you see extreme uncertainty and volitility which makes it impossible to catch a trade--or a news story of a hurricane hitting and leveling tokyo comes out--stop trading. A good trader knows when to trade--and when not to trade... Let the trades set up and come to you...don't force a trade, don't chase a trade, don't fight a trade.. Never forget you are the surfer and Forex is the ocean wave...wait for your wave and learn how to ride it and when to get out before it tosses you on a rock to bleed...

7th--Learn the X Factor.. You may be a great technical trader on a chart--but Forex is also influenced by fundamental news--politics, economics, political change or unrest, natural disasters, military tensions and concerns, foreign relations..anything that could effect a country's economics--Forex can be effected by it. Same for Econ news releases=--learn when they come out--and learn how to play or avoid them. You can have the most text-book chart set up for a move--and the "x factor" comes in as a bad sales or jobs number--and you can toss that textbook right out the window as teh chart breaks every indication for one direction and goes the opposite. If you have a stoploss--you can be saved. Forex is too big an entity to influence by your trade--it will do what it wants, when it wants, if it has any woes or concerns...

8th--you do not have to become an economist or an expert in foreign politics...but you do need to keep yourself informed when you make a trade. Its not hard--a good trader is a good observer and listens to reports, analyst views, but makes their own decision. Never over assume in Forex, and never underestimate it. Forex reacts as its own entity separately from stock markets. One day the dow could go up and the dollar down..the next the dow could go up and the dollar goes up. Assume nothing...and if trading News reports--trade how the market interprets the report, not what the report says. A good news report could still have a currency weaken and vica versa...nothing is to be taken for granted.

9th--Discipline, practice, consistency.. Develop these things, admit and find and nix any bad habits that could mess you up. Learn to trade regularly... If you trade random times during the day, and random pairs--you learn nothing.. Each market is different--many pairs move at different times..some markets are active, some are nutz and volitile...others are slow and sluggish... Discipline is key to your practice and your developing consistency in trading and winning..and those are what you need to succeed in Forex. You don't need to buy some magic system or alerts which promise 1000 pips per month--no shortcuts in Forex. Forex requires you to become a Trader. Anyone can do this if they take the time to learn and do...

10th--Finally, learn what kind of trader you are--and what kind of trades you like. Some folks like short term trades, some like swings and intraday moves..some like mid or long term trades which take several days to months to hit a target...do you know what kind of trader you are? What you like may not be what you are good at--its a fact.. Realistically trade how you like, but also what you are good at. For example--I like fast quick "action" trades that I could do in an hour or two..picking up 10-20 pips here and there--but I SUCK at it and am impatient sometimes if I do them and often break even or lose.. However I do very VERY well at mid term and day or longer trades that give me 10-20x the pips I would get on a 10 or 20 pip goal in an hour...so I trade what I am good at, not neccesarily what I "like"... The result--I trade and succeed at Forex VERY very well... Decide what you want and learn what kind of trader you are--you can either trade what you are good at or trade what you like.. If you trade at what you are good at--the "like" part will develop.

This scratches the surface..and I hope this helps ya and you are able to do well.. If you have any questions--please don't hesitate to ask. We're here to help--and we're not gonna lie or BS you.. Forex has been great to me and I love it--I want others to find success and love it as I do. I look forward to your results and wish you success!

FXW

[Skydaemon]

Ok restarted with a new broker demo. $50000 acct, 100:1. I really wanted a $5000 acct so I'm gonna multiply everything I do by 10 to duplicate that effect.

First 2 trades one went ok and one very badly, lol.

I decided to use 20% of account per trade to see what happens this first day.

First trade was a quick one:

Sell usdchf 100 1.09110
Sell usdchf 1000 1.09100

Close usdchf 100 1.09045 profit 59.61
Close usdchf 1000 1.09055 profit 412.64

Second batch of trades I got killed on lol, guess that's what learning is about. I get the feeling there's a lesson or two in here, so despite the fact that I'm getting killed I'm gonna follow it through and mark the damage. Better get my bad habits out of the way now I figure.

Sell eurjpy 100 158.615
Sell eurjpy 1000 158.65
Sell eurjpy 3000 158.665

Close eurjpy 100 158.9 Loss 2323.87
Close eurjpy 1000 158.9 Loss 264.9
Close eurjpy 3000 158.915 Loss 6972.01

This next one is really 10 trades as I was screwing with the doubleclicking order purchase stuff but I'm just gonna list it as one with an average price.

Sell eurjpy 1000 158.8575

Remains open with a stop loss at 159.2

Yeah these trades above are called throwing good money after bad. Good to see averaging down works about as well here as it did on pinksheets. "There is no bottom"

Basically this last one can be chalked up to an irrational belief that after a 500 pip solid upstreak in one day it was time to stop and reverse at least partly. All exited on stop losses, and although the last hasn't yet I'm thinking it well might too as that stop loss is at 159.2. I also had not intended to complete these trades in half an hour, i was thinking more like tomorrow for a close time.

I'm unsure of the lesson to take away on this one. Either I shouldn't set tight stop limits on huge runs that I think might reverse within a day.

Or, I shouldn't enter such things until it shows a real sign of stopping or reversing.

Quite possible this is related to the suggestion to only use 2% of an acct to trade with also as I can see margin getting swallowed very quickly on tears like this that you wanna leave open for a few days.

I still think betting against the eur/jpy is a good bet, but I find myself unable to pick a reliable entry point at this moment, and not entirely sure what will mark the end of the tear, or even what set it off. I'm also not sure how significant a 500 point increase is, it seems huge to me, but then I dunno anything yet. In my mind I equate a 500 pip gain to about a 500% increase in a stock, perhaps that's a poor way to think of it.

So yeah, day 1 lost 20% of the account and climbing. Good thing this is practice...

[Skydaemon]

I also haven't settled on what currencies to trade in. I want something that's active at the times of day I actually trade, but I want something I can understand too. I also hate this 6-8 pip spread stocks like most of the gbp ones and I much prefer things in the 2-5 range.

Also, I prefer to trade around say 8 pm est to 7am est or in some block of time around there.

I think I'm gonna try avoiding the gbp and nzd because of the spread. Gonna avoid the aud I think as well cause I don't really know anything about australian politics/economics.

I'm tending towards some combination of usd, jpy, eur, chf, cad. The cad doesn't seem to do very much while I trade however so I've avoided that so far. I might end up using that for long term trends though as it's where I live and I get the currency economics reasonably well here.

Ideally I'd like 2-3 active trading pairs during my times and 1-2 month term ones which I can leave open (one will probably be the cad/usd).

Any suggestions? I'm not so interested in temporary stocks or something just for learning, I'd rather play with what I'm gonna end up with and beat through the lessons up front.

And as I type the eur/jpy is back down at 158.6 and coulda even been a profit by now if those stop losses hadn't triggered....

Fooey.

[ForexWolf]

Howdy.. Key to your issues--patience... Many traders get in a trade and exit just as quick--trades take time..

Forex for beginners is not unlike putting in a brand new viodeo game, picking up the controller and banging around the game crashing into everything..and then finally deciding to read the directions and objectives and what the the controls are... So as for a first time at trading--you're doin great to raise the right questions you are asking yourself and seeing, and you're doing just what you need to do to see how it works and how volitile it is. They don't call Forex "the most dangerous trading" you can do for no reason...but it is also "the most rewarding and even playing field" you will find in open markets...IMO.

The answers to the lessons you are learning are in my answers to you originally below in this and the other thread... You're learning you have to choose and study your pairs and their influences, to study and learn the markets & times, and seeing this isn't just as easy as it may look..which is all a good thing to learn now rather than later. I think you may also be seeing that my claims of how long it may take to learn is true. Learn and take those risks now in Demo before you find out the hard way and get creamed in real money. This is your practice time--it may seem frustrating or confusing at first--I was overwhelmed my first trades, but really you have a LOT to learn about Forex and trading it and if you take the time to learn it, the payoff is the best and you can do $VERY$ well....

Biggest mistakes many new folks do is over-trade, rush their trades, and trade unfamiliar pairs or trade without a plan etc. Nothing wrong with jumping in and trying everything in Demo--thats what demo is there for--and it shows you how deep the pool is.. Lots to learn. Another 'fake out' that newbies focus on is the spreads--this is a tiny tiny tree in the forest. Do not be concerned with the spreads--really its true--they are not that critical to your success.. When you learn to trade in Forex and are successful in your trades, the spread becomes almost meaningless..you are making profits--and one or two or four pips difference from one broker to another really won't matter at all. Those pairs with larger spreads are often potentially very volitile in swings, and can quickly move out of those spreads very fast from a trade entry.. When traded right--you won't notice or care about the spread.. You're on the right track--but there is a LOT to learn and a LOT to Forex trading...just understand its going to take time and you cannot expect to see instant success or accurate results in a few days of testing the waters.

For trading 8pmEST to 7amEST is one of the most active times in Forex--you can plan trades early during asia around 8pm and look for set ups so when London kicks in hard at midnite to 4am EST and New York gears up at 6-7amEST to open at 9am, you can be ready for the volitility those markets bring and be able to get results...

My suggestion on your plan to hold a few trades for a long term, and trade multiples at once--great idea but you have to be able to trade what the market has to offer.. Not every day is a prime trading day on every pair...some days I get to the charts and they suck--so I step aside and wait and watch for better trading times to develop on the chart a day or two or more later.. This is part of knowing when to trade and when not to trade and the not forcing a trade lessons. As for holding long term on some pairs--this is where you have to check your interest rates on the pair you plan to hold. If you decide to hold a pair with a lower interest rate to the countercurrency--you can end up paying interest daily on your hold.. Make sure you structure any long term holds in your favor for interest rates paid or deducted from your account. Long term holds for months require a VERY large amount of account capitol to have to endure monthly swings of several hundred or more pips--but they can pay off very well if you are right. This is why many folks hold the majors against the Yen (.50% interest vs holding a high paying currency that has 4% or higher), or they hold commodity pairs like NZD and AUD because of their very high 7-8% interest rates that really can PAY you daily to hold....

Fortunately for you and anyone else reading--the answers and guidelines to how to find structure and beginning success in Forex for your questions has been listed for you in my answers already...so consider that a beneficial step ahead of things and check those frequently--you'll find I've already addressed a lot of questions you have and some questions you have not yet raised. My suggestion is when you hit a wall--check my answers and suggestions in the initial response where I listed things out--the answer and the lesson you are on is there. If its not clear or you need any questions you have or any concerns specifically answered-- just ask..we are here to help and its no problem at all...

FXW

[Skydaemon]

Just to update this. I'm not gonna post the trades I made cause there were a ton and I can no longer open the demo thing as it's shut me out for the weekend and I can't even launch it.

I did stay up all thurs night though and trade from midnight to 6am solidly.

1am, 2am-2:30am and 5am were real interesting times.

Around 2 or so I looked up market open times to figure out what was goin on cause the whole thing had lit up like a christmas tree.

I did settle on currencies to play with, but actually I found the most benefit so far in trading currency circles. It was very helpful in seeing the trends and revaluations they were putting in place when new markets took over.

So last night I was mainly playing with eur/jpy, usd/jpy, cad/jpy and I had a secondary set of usd/cad, usd/chf, and eur/usd which I played whenever
they came back to where I liked. The secondary set didn't move to tradable spots too often so I'd set targets for them and look again when they got back into a range I liked.

I actually found it very helpful to watch them in combinations like that, especially during london's time. Either it would be obvious that one specific currency was getting revalued across the board in the same direction. Or two that have no reason to separate would, and it would make a nice opportunity to capture the move back together (for example usd/jpy and cad/jpy usually stay about the same distance and go in the same direction, when they don't they usually will soon).

London was very very nice to me with the currency circles above, I believe every single trade I made from about 1:45 to about 4am was profitable and there were quite a few, including that trade above which didn't finish:

Sell eurjpy 1000 158.8575

That trade made me over $5000 on it's own during the london only session and it woulda been slightly more if I'd held until the us nearly opened, but I dumped it when the volume/speed slacked off.

By 4:30am I was back up over $50k in total balance.

Then the us opened and I got killed. Seriously 98% of everything I did went sour from about 4:50 to 6 before I went back to stocks for the open there. I _might_ have made 1 profitable trade from 4:50-6am. most of the rest lost hundreds and a couple bit me for a thousand each. I lost around $13000 after the us opened within an hour or two smashing everything I gained during london and putting me right back where I started that night.

First thing that happened, everything snapped to the moving average and started 'whipper-snappering' in ways I just could not predict at all. Next, they devalued the yen in a bunch of places (everywhere except the eurjpy which london had been taking down all night) that took me a while to catch onto but it was definitely an early trend. I remember it cause somehow I didn't see that coming until after it was largely done. They also reset the usd/jpy and cad/jpy and swang it around in a way that I tried to follow and got regular losses for my efforts. They really didn't care about the usdchf so I just left that as it barely moved.

[ForexWolf]

Originally Posted by Skydaemon

Then the us opened and I got killed. Seriously 98% of everything I did went sour from about 4:50 to 6 before I went back to stocks for the open there. I _might_ have made 1 profitable trade from 4:50-6am. most of the rest lost hundreds and a couple bit me for a thousand each. I lost around $13000 after the us opened within an hour or two smashing everything I gained during london and putting me right back where I started that night.

I'll let ya in on a little tip about market changes between London and US--if London moves hard one way on a pair, when the US opens it will very often recover that pair the opposite direction right back to a 60% or so degree to balance out the hard move... It doesn't happen everyday--but it does happen quite often.... Just something to be aware of..its not a secret or anything--just not many folks pay that much attention to it...

FXW

[Skydaemon]

Have you noticed any influence of stock market indexes on results?

As an experiment I took a Sell position on usd/jpy to see what happens when tokyo opens since the dow was lower friday and the hang seng and topix were up. usd/jpy and cad/jpy are trended that way already it seems, bouncing off moving average downward.

Shall see what happens when tokyo opens.

I'd also taken a position on aud/usd since it was active and possibly on an old support at .8793, though I am not sure if it will get traded during tokyo.

// actual positions are:

Sell usd/jpy 106.845 -> trailing stop loss was too close and it exited at 106.7 for $1358.95 gain
Sell usd/jpy 106.850 -> trailing stop loss was too close and it exited at 106.7 for $1405.81 gain
Buy aud/usd .87930 -> this retraced from it's highs and trailing stop lossed out at .8800 for a $700 gain.

[Skydaemon]

Another thing I find weird, but am unsure of what to do with. Is the inversion of currencies.

So for example during london it didn't happen. But after the us open the cad/jpy kicked out past the usd/jpy in the wrong side and stayed there quite a while. Judging by the usd/cad the usd/jpy should be higher than the cad/jpy, but sometimes it isn't. During the us market it was actively traded and happened with volume.

There's probably some hint at movement in the usd/cad here in the future I think, maybe during us open.

// sorry i'm just blind and maybe it was just the narrowing of the range.as it was off 106 to 105 I think.

[Skydaemon]

3pm it picked up volume, they ran with trends.

First impressions:

They narrowed usd and cad, then increased the yen everywhere, and are increasing the euro. Leaving myself a note to come back later and see if they hold it to london.

usd/jpy and cad/jpy dropped pretty good down to 106.250 (usd) at the moment. Although it had reversed and given back it's gains before charging ahead.

The eur/usd didn't move much but it reversed it's early course for what it did do.