Part 1 - My Evolution As a Forex Trader

In part 1, I left off opening up a mini-trading account in the amount of $1000 USD.  As you can imagine, I blew this account up.  I don't recall how long it took me to blow it up, but it wasn't too long.  Thinking back, $1000 is just not enough capital even when trading a mini-account.  Think about it.  If you were to allocate 1% of your capital to each trade, you could not set a stop/loss greater than 10 pips on a pair like the GBP/USD and this doesn't even count the spread.  So there is no doubt in my mind that $1000 just wasn't enough capital to trade a mini-account.  As an alternative to doing this, I could have opened an account at Oanda where variable sized lots are allowed.  In hindsight, I should have done this.   I remember losing hundreds on 1 trade, probably more than 25% of my trading account.  This was obviously money management at it's worse.

Around this same time, I spent a lot of my time finding out how to backtest strategies.  The hardest part of doing this was gathering historical data.  I tried importing data that I found freely available into a database but there were just too many data gaps which would easily throw off calculations.  There was also no way to verify that this data was even accurate.  I also tried using FXTrek and eSignal to do backtesting.  FXTrek was my first charting software of choice but I became just too enamored with eSignal and their plethora of technical indicators.  Therefore, I switched to eSignal.  eSignal was slow and expensive but I got accustomed to using it so I stuck with it for quite a while.  Their backtesting capabilities also weren't too bad.  The one bad thing with most data providers is that they don't provide you with enough historical data for smaller time-frame backtesting, eSignal was no exception.  

I remember back then trying every single indicator there was available to me.  If it "didn't work", I'd just move on to the next indicator.  I'm not sure if I really grasped that indicators were really all the same, representing the same data in different ways.  I tried so many different indicators and had 10 or so on my charts at any given time.   What did all of this do for me?  Nothing.  It just confused me.  Why did I need 10 indicators to confirm what price was doing?

I didn't have a set of trading rules to go by.  I was randomly trading whatever strategy looked good at the time.  I was very undisciplined as a result and was trading anytime of the day, a lot during the Asian session.  I would trade just for the sake of trading.  This was a very exciting time also.  I loved to come home and look at the charts and I loved placing a trade even more.  What an idiot I was....

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No. 1 :

Hell, are we related or something??!! :-P

Submitted by Simon Super Trader • 2007-11-06 20:12:51

No. 2 :

You'd think so wouldn't you!

Submitted by Craig • 2007-11-07 20:23:43

No. 3 :

Thanks for sharing we've all had our stories as Forex traders..I've certainly had mine. Currency we have a very proftible prediction Forex signals service. I welcome you to come check it out.

Jordan
http://www.iforexsigals.com
<a href="http://www.iforexsignals.com">Forex Signals</a>

Submitted by Forex Signals • 2007-11-16 14:11:27

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