Blog Exclusive: The Experiences of a Forex Mini Trader

I started trading currencies a little over a month ago and it has been
quite a learning experience. Since then I’ve lost $600, started a Forex
News website/blog, and have become addicted to studying charts and
following world economic fundamentals. This first post is going to be
quite raw until I can get my feet a little wet. I think we can all
learn from my experiences day trading currencies.

I think it’s best to follow just one currency pair initially. My
currency pair of choice is the GBP/USD. I know there is a 4-5 pip
spread for this pair compared to only a 3-4 for the EUR/USD and USD/JPY
but I just felt comfortable with the Sterling.

Let me go over my trades for the day:
In the early afternoon the Sterling was making a comeback versus the
Dollar and the technical indicators looked favorable for the Sterling.
I bought 10K GBP/USD at 1.7725. I went to lunch and came back to the
GBP/USD trading at 1.7750. That was a health 25 pip profit so I set a
tight 10 pip trailing stop at 1.7745. Unfortunately the stop triggered
when the GBP/USD fell to 1.7745. I was happy with the 20 pip profit
until the Sterling quickly raced up another 65 pips. This was a total
lost opportunity and a problem I have been having. It wasn’t that I was
inpatient, it was that I was just scared.

My second trade occurred a little while later when I decided to reverse
my support for the Sterling. I sold 10K GBP/USD at 1.7784. My rationale
was that the pair had hit a resistance line. I couldn’t sit at my
computer and watch the trade so I set a stop at 1.7804 and left. My
thinking was that if I picked the wrong end of the trade and my stop
tripped, I’d be even for the day. Well, the stop tripped and I was at 0
for the day.

From the daily charts, everything points to the Sterling making a
run up. The MACD and Slow Stochastic confirm this. In addition, the
38.2% fibonacci (High in 12/04 to Low in 07/05) retrace is at 1.8143. I
think if I hold a long position, I can profit 300 pips over the next
week or so. This is why I made a third trade for the day, going long on
GBP/USD. I bought at 1.7801. Since then, the dollar has come back a
little and I’ve been down between 30 and 50 pips most of the evening. I
would usually be uptight about being in this position but I have so
much confidence that the Sterling is the way to go in the coming weeks
that I’ll be able to sleep easy. It can be a big mistake though and not
setting a stop is even a bigger one.

-W 

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