Just blew up a 11k Forex account on a few bad trades

Just blew up a 11k Forex account on a few bad trades.

Was 4k~ at the start of april.

AMA:

Lemme guess.

You were trading on 500:1 leverage and your position went down 1% which led to a margin call? Or some other magnitude of the above?

Either way, forex is no joke. It's pretty hard.

I had a strategy that was pretty stable.
AUD fell pretty hard a few days ago, was about to cut half the position this morning, then NZD didn't cut their rates that sent the account down another 5k putting it where it ended.

I reckon it's fair lesson learned, I ignored the whole "Don't trade around news" rule of mine, which most of the time doesn't cause a problem, but when it does, it quickly turns into a big problem.

Ya live ya learn.

what is your edge?

losing everything lol.

Hey it's ok, OP. It's just money

nah, I don't think you've learned anything

you have no business in forex. none. you are an uneducated dummy

Basically that I can't predict if the market will go up or down, but I can say that because people eventually take profit, it can't go in one way for any large amount of time.

That and fibs.

Attached is a simulator run of the strategy run on one pair over a year.

Live I did it on over 15 pairs simulatinously so the growth was a lot more. Unfortunately, I'm still ironing out the bugs, and it's expensive as can be seen.

Forgot to attached

Pic related.


Heh.
11k Isn't a huge deal for me, although it is the farthest this strategy has come on live.

I'm going to re-fund from 1k with what I've learned and try another run.

I understand the gains look huge, that can't be right. If hedge funds only make 1% a year, how can this noob make over 200%?

The difference is hedge funds manage millions, if they blow the account they basically go to jail for negligence/incompetence.

If I blow the account (Most of which was profits anyway), I don't face any truely bad consequences.

That means I can take bigger risks. A 5 % to blow the account per month vs a 250% gain each month?

I'd take it any day. If I was a hedge fund manager though I wouldn't touch it.

>Basically that I can't predict if the market will go up or down

>just kidding

>but I can say that because people eventually take profit, it can't go in one way for any large amount of time

sigh. you have no idea what you're doing

>it can't go in one way for any large amount of time.

until it does and you lose all your money

so you follow trends or trade reversals?

yeah, how is a genius like you in a position where 11k "isn't a huge deal" to you?

the shitty grammar and TA idiocy suggests you make less than 100k a year

Considering I went from 4k to 11k in a month. Yeah. It's not a huge deal.

Would I prefer to have kept it? Yeah.
Is it quit forex end of the world level of loss? No.

Is it going to affect my quality of life at all? No.

Reversals, but honestly, I'm not even thinking in terms of that when I take these trades.

>it can't go in one way for any large amount of time
"the market can remain irrational longer than you can remain solvent"

This is true, but i'm not counting on price meeting some fundamental point which is what that quote has in mind.

Instead I place my bed soley on one idea:

"People are subject to greed and fear".

You don't know where the market will go, but you DO know where it has been, and where people entered in the past.

If you know those things, then you know where they'll let greed take them, and where they'll be fearful, you can exploit that to make your profits rather consistently.

Really it's an expansion on that 'stop hunting' idea. You know where people's stops are; You just need to google "forex strategies" and see where it tells them to put stops.

When the price approaches stops you know that it will act as an 'accelerator' as shorters buy back their positions causing price to move even higher.

Or longs sell their positions causing price to move further down.

i traded FX for a while.

first of all, how did you lose 11k in such a short period of time? aren't you supposed to only lose 2% a time?

I wasn't following le rules XD.
by allowing only 2% risk I wouldn't have gotten to 250% in a month.

"Oh but you wouldn't have 0 either".

Yeah but I'm more likely to re-fund and remake 250%, then say use 2% risk, and make 5-10% in a year.

Is it a strategy that will continously blow out?
I don't think so. That mistake was me doing one thing against the rules of my own strategy.

I mean, I lost some portion of the account, but that's acceptable when you're growing at 250% a month, it regenerates easily... BUT the mistake was I gambled the remainder on essentially a 50/50 bet on RBNZ cutting rates.

They didn't. So it was either I make like 4k, lose 4k, or risk losing it all.

I went with option C, and got what I deserved.

But I don't think it was a fault of the strategy itself.

To clarify, I've tested this strategy pretty thoroughly with very pleasing results if the rules are followed properly:

>the mistake was I gambled
why didn't you just buy lottery tickets?

Overfit martingale strategy. Don't bother. These strategies have succesful runs that can last even months, then blow up. Just have a look on Myfxbook, there are thousands of strategies like yours.
Price distrbution is not normal, you will have outliers at the left end of the tail (that is, long strings of losses far longer than those you have seen in the backtests). That and the fact that markets change behaviour regularly but unpredicatbly.

Your system is too fragile, and going down this way will leave you with another busted account and lots of time wasted. Robust strategies try to eliminate the left side of the tail, by maximizing the effects of the right side.
That is, trend following systems wth fixed stops that end up with long strings of losses, some winners and rare monster trades in which you can have easily 50R or 60R (R=amount risked per trade). Not so easy to backtest (since you need to incorporate a few fundamental ideas, and watch for the correlations between currencies) and psychologically demanding to trade.

My advice: try to find inefficiencies that precede huge price moves on the historical charts. Do your homework. When sufficiently confident, move to a small live account with a rigid risk management. See how your system interacts with fundamentals and with news. Elaborate a trailing stop system based on market sentiment. Always check out higher TFs for a directional bias. Always trade in that direction. Forget about anything below H1.
And don't listen to memesters, small account can be easily tripled and more in one year: hedge funds are capped by liquidity, execution and inability to employ leverage/getting in and out of positions quickly

This is some good advice.

It does use a bit of martingale, but I'm trying to implement a fixed stop now, before it was a sort of 'soft' stop, but that seemed way too susceptible of me just being greedy..

Wondering if a fixed stop will kill the profitability.