Am I just lucky or on to something?

[tcrouch]

Ok, here's the condensed version of the story. At the beginning of 2006, I didn't even know what FOREX meant. By a chance, around the middle of January, I stumbled upon it and began reading up on it. I opened a demo account on FOREX.com just to see what it looked like and how it worked. I made a few trades to see what would happen and ended up making a few bucks.

I kept reading and reading, everything I could find. Forums, websites, news, etc. I knew I had a ton to learn about FOREX, but I was finding that my trades with the demo account were being made a little too effortlessly. Keep in mind that I own multiple businesses and I enjoy the challange of making money. This was and is to be a hobby for me.

So, in an effort to force myself to make more thought out trades, on Feb 2, 2006 I opened a live account on .com with $1000.00 USD. After the fees, it ended up being about $980.00 USD to start out with. Up front I knew this was play money and was more than willing to accept the loss of it should things go bad.

At this point, I've only been doing this for about a month. I still havn't figured out the different trend lines and systems that alot of people use. Honestly, right now my system works like this. I spend alot of time reading economic news, reading forums, and trying to figure out if I have a clue about what the pairs I'm trading are going to do. I'm mainly trading EUR/USD and USD/JPY. I recently added AUD/USD as well.

I found a program called FXHit that analyzes my history very well. I will attach it to this post. So far, I seem to be doing pretty well with my trades. I have figured out that for my trading style I need pretty large SL points. I have found that the majority of the trades I have lost on, had I been more patient, I could have at least broken back even or made some profit on them. I spend the majority of my day at my computer for a living, so it's not a problem for me to watch what's going on with the charts and keep reading posts and news about what's happening throughout the day.

My question to those who have been doing this for a long time is this. Am I just getting lucky, or are my calculated decisions and time spent watching the charts actually a "system" that seems to be working for me?

This venture reminds me of my golf playing. When I started out, I played pretty well. I wanted to get better, so I began reading, listening, changing things to better my performance. Instead of getting better, it got way worse. I did better and had more fun doing it the "natural" way.

Should I try and change what I'm doing and learn systems, etc. or do I just keep on keeping on?

http://www.tonycrouch.com/021806.pdf

[ajhardesty]

Originally Posted by tcrouch

Should I try and change what I'm doing and learn systems, etc. or do I just keep on keeping on?

Hi Tony,

There are a number of ways to answer that question and I imagine you will get several opinions, but I would rely on the old saying, "If it ain't broke don't fix it."

Maybe you're just lucky. If so, go with it until the luck starts to fade because you are off to a heck of good start. But maybe you have learned more than you realize and you are just making smart decisions. Just have fun with it and learn from your mistakes.

[tcrouch]

Thanks for the reply AJ. I hesitated even posting this because I thought it might sound stupid to some people to be asking this question. But, also, I know that in business, life, or anything experiance is the true teacher so I was wondering if there were others that started out and succeeded just as I am doing.

Thanks again for your thoughts.

[EasyJim]

I think you’re on the right path. Looks to me, that you are more a fundamental trader. It is very important to open a mini account short time after learning how to use the platform. Reading – of course. I also find very important the fact that you opened a $1000 mini account, and not a $300 or $500. Keep up the good work!

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Good Luck

[ampris2000]

as long as you know why you're making a trade you should be fine.

can you explain what you're doing and why to someone else? Or even yourself?
Try explaining why you're making that trade, why you put your stop loss / take profit at the point,etc.

[tcrouch]

Ampris. Good point. I actually had to sit down and think about that. Why do I make the decisions I make. I don't use signals or trend lines so what is it that makes me choose the trades I choose and the SL/TP I choose.

The SL/TP is easy. I have learned that both points are easily movable and the more my NAV goes up, the more SL I allow myself. TP's are really easy as well. I shoot for around 10-15pips minimum and then if I'm paying attention, will move my SL up so that no matter what I always make at least that. Sometimes I will be watching a trade gain pips second after second, and I'll just use my gut to determine the right close time on that trade. More often than not, I catch it pretty close to a pivot point. ( I think thats the right term)

As far as what initiates my trades, which pair, and which direction, I usually base that alot on what it's done the previous few hours and what the news/forums are saying. I've had plenty of scares, and several times wondered myself why in the world I made the decision I did. But, I guess, all traders do that.

Anyway, I appreciate the comments and agree with them. Routlette is areat game to make guesses on, but trading in that manner seems senseless and frankly not near as exciting as seeing your educated guesses come to fruition.

[ajhardesty]

Originally Posted by tcrouch

I hesitated even posting this because I thought it might sound stupid to some people to be asking this question...

No, no, no. Not stupid at all. In fact, I could easily relate to your golf analogy--been there, done that. I learned more about golf from the movie "Bagger Vance" than from all the books and magazines I ever read.

I certainly don't want to diminish the importance of reading and learning about the market, but I like to use them to get a more holistic understanding rather than for any specific strategy or technique. Once you're comfortable and confident, just do it.

[MickMason]

Originally Posted by tcrouch

I have figured out that for my trading style I need pretty large SL points.

I shoot for around 10-15pips

Am I just getting lucky, or are my calculated decisions and time spent watching the charts actually a "system" that seems to be working for me?

Luck or calculated decisions, it could be either, but don't forget we've been in a fairly tight range for a while. Having a big enough stop, a small target, and the patience and money (to support the position) to wait until the trade shows profit is feasible in a ranging market, just watch out for that big loss when the market breaks out, that could wipe out profit from the last 50 trades!

As it's a hobby for you I would say enjoy it, and you've already accepted the possibility of losing your $1k so if that happens it will be no big deal.

Good luck


Mick