beginner in forex market

Discussion in 'Forex Trading' started by Ashley8, Sep 5, 2006.

  1. Ashley8


    Hi, I’m a newbie in the currency market and I’ve acquired more losses in trying the system than actual profit. You really must know what you’re doing beforehand.
  2. Funny enough, you're right. But then I think you need to know what you are doing in every arena of endeavour that you expect to succeed in.

    Any other approach is a version of insanity. Welcome to the real world!
  3. Ashley8,

    Welcome to ET.

    Profitable trading has been the hardest thing I have ever undertaken in my life.

    Michael B.
  4. Hi Ashley8,

    What system?

  5. You might examine the Zweig system that I remember posting on I find EURUSD tests well with 6 % entry, 1.3 %exit, 5 % risk, cash only (no margin) and long positions only. I only have 7.79 years of EURUSD exchange rate data to test and prefer to have more data before trading with real money. You might use these parameters as a starting point.

    Number of trades 12
    Total profit $ 30808
    Profit after subtracting $ 10.00 commission, slippage per transaction: $ 30568
    Risk is 5.00 per cent of equity.
    Drawdown is 0.0161 (1.61 per cent).
    Cumulative Annual Growth Rate (CAGR) is 3.92 per cent.
    CAGR / Drawdown is 2.44
    Instanteously Compounding Annual Growth Rate (ICAGR) is 3.42 per cent.
    Annually Compounding Annual Growth Rate (ACAGR) is 3.48 per cent.
    Information Ratio is 0.99
    Initial capital is $ 100000
    Long trades only.
    Growth rates are calculated after subtracting commission & slippage.


    The growth rate of about 4 % is not much but perhaps with 20 % margin it might increase to about 20 % growth.
  6. How right you are I have similar experiences wherein the more I try to break even, the greater my losses become. Fortunately, my friend referred me to a firm located in the British Virgin Islands that was able to help me recover a portion of the losses I incurred with currency trading. Even though the firm was not able to help me recover all and break even, I’m still thankful nevertheless.
  7. leveragefx

    leveragefx ET Sponsor

    I have seen many traders make the same mistake. What they tend to do is take HUGE losses and have avg sized wins. One for example was 68% winning with an avg win of about $50 but with an avg loss of $150.

    The key in trading forex is to trade WITH the trend until the market has gone too far based on statistics, implied volatility extremes derived from currency options prices and then trade against the trend.

    For me I find using the 5 min chart to determine direction and then trading off of a 35 tick chart made up of only FXCM, GAIN,COES,HOTS,GFT banks works great. I'll buy lower keltner on the 35 tick chart if trend is up on 5 min chart and short upper keltner if trend is down. I am very quick to get out so avg loss is about 6 pips and have about an avg win of the same after spread. I'm about 80% winning doing this overall. That's one strategy, the other is to short at the avg high of the day but on the fast 35 tick chart upper keltner. Usually when this gets hit the market reverses. I try to catch 10 to 20 pips on these trades as market is way overbought. Reverse for buying lows. Out of every 10 buy the low sell the high you are likely to take one 20 pip loss as the currency is abnormally strong/weak. It's a part of the game of trading.

    One other thing I do to increase avg win size and cut avg loss size is to trade small at the beginning of the day, maybe do 2 or 3 lot trades and then once up $300 to $500 on the day increase to 5 or 10 lot trades. THat way if I'm off that day or market is not acting like it does 9 out of 10 days then I'll lose but have small losses. I only increase size when doing well.

    Another suggestion is have a few strategys you employ and KNOW the probabilitys of them working. The BEST strategies may give you 3 to 5 trades a week so you need to trade LARGE size when you see them. I have one method that is about 95% winning. If market down a lot or up a lot on day I will short/buy at the place where most traders have their positions. This trade almost always works the first time touched as losing traders will exit their trades at even giving me nice 6 to 15 pip pop. I'll do 10 lots here.
  8. sooo... Ashley how is your quest going...we have not heard from you in this thread, since you started this thread.

    Michael B.
  9. Ashley8


    I'm doing pretty good. Jane Sawyer introduced me with this firm that helped me recover my losses and now Im earning more money than I have ever dreamed of. Thanks a lot Jane!:D Im so glad I took your advice.
  10. leveragefx

    leveragefx ET Sponsor

    Pretty suspicious that both parties both registered in September and only posted in this topic? :)
    #10     Oct 3, 2006