CB's Forex Trading Journal

Discussion in 'Journals' started by CBfx, May 18, 2012.

  1. CBfx


    I have about $100k that I can use for trading, which is currently sitting in cash earning no interest. I feel can use this money to take some calculated risks in the market as my retirement, kids education etc. is taken care of via other accounts, and I am not counting on this $100k for immediate or future needs. I made my small stake old fashioned way - work and savings. I am still climbing corporate ladder, and probably 10 - 15 years away from peak earnings, so I feel somewhat financially secured.

    As I work in corporate treasury, I have been watching FX, interest rates and commodities markets for some time as a hedger, with majority of my time spent tracking G7 FX due to the nature of the risk profile of the company I am working for. As I watched FX markets long enough, I started seeing things - structure of trends, patterns, etc. In other words I think I am seeing something resembling an order in the foreign exchange markets. As such, I want to test my theories with real money.

    As I am not eager to blow $100k on the untested theories that may be just an optical illusion, I will start an experiment with very small amount - $500. The thesis is that if I cannot make money with $500, I will not be able to make it with $100k. If I lose $500, it is not a big deal - a small price for a lesson.

    My plan for a year is as follows:
    • Open an account with one of the retail brokers. I like Oanda, the spreads are low and interface looks easy
    • Start trading with approximately 30:1 leverage ratio to begin with. Adjust leverage ratio as I ago along to find my "comfort zone"
    • Publish my thoughts on the markets daily, and trading statistics weekly in this journal
    • Trade only in G7s, mostly in EUR, JPY and CAD
    • Evaluate my results on Dec 31, 2012 and decide if it is worth risking $100k starting in 2013 on currency trading
    • ... or stop trading if account balance gets below $100, then close the account and donate residual to charity
  2. CBfx


    Due to the main job related demands, I had to put my trading endeavor on hold for some time. Now that things have settled down, I am ready to start. I am making the following modifications to the post above:
    • I took $20k out of $100k account and opened an account with Interactive Brokers
    • As $80k is still sitting in government money market fund, I effectively put 20% stop loss on the whole portfolio. When (if) $20k is gone, I am done with trading
    • I will be trading EUR futures only using maximum margin to equity ratio of 75% - for $20k account this equates to 3 EUR.USD contracts at the start
    The account was opened two weeks ago, and since then, I made $600, while getting acquainted with IB’s platform. Now I am ready to go.
  3. CBfx


    Initial Balance
  4. CBfx


    Balance as of Friday, July 20, 2012