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Thursday 29 September 2011

Signal providers

I am using the following zulutrade signal providers, with manual stop losses.

(all providers set at 1 microlot)
Successone - Stop loss 81 pips
Quick Draw - stop loss 61 pips
Murrey Math - Stop loss 51 pips
HighProfitfactor - Stop loss 60 pips
FX 178 - Stop loss 81 pips
Forex Cruise Control - Stop loss 111 pips
FORABCD - Stop loss 46 pips
Easter Egg - 52 pips
Co FX 24 - 71 pips
Climber SB - 42 pips
cci12345678 - 71 pips
Alpha & Oxygen - 82 pips





Tuesday 27 September 2011

Week 1: September 24th, 2011 - A bad start











Well my first week trading was a complete disaster and by the end of the week I was down £168 (1100 pips). All of the signal providers I had selected were making bad trades and to make it worse I was making manual trades to make up some ground and these were also turning bad. The Euro was tanking, the GBP was tanking and by the middle of the week I had 15 trades in the red.  It was very clear that without a plan and by blindly following a selection of signal providers my account was going to blow up very quickly. If nothing else it was a valuable learning experience. The key points taken from this week were as follows:

1) Signal provider selection is of critical importance. It is not enough to select the 5 most profitable SP's at any given time and expect this to transform into winning trades. I will discuss this in more detail, however it is very important before selecting a SP to carefully analyse their trading history very carefully. This is covered in more detail in Signal Provider Selection.

2) The use of stop losses. A stop loss can protect your capital against large swings in the market that can blow up your account. The mistake I made was trusting the signal providers I chose to close bad trades before these became unmanageable, and instead of stopping out at say 80 pips had trades that were down 250 pips and going against the trend. It became very obvious that a successful trading strategy must utilise stop losses in order to set risk exposure for each signal provider and the account as a whole.

3) Understand the market conditions on a weekly and daily basis, look for key dates and announcements. In the future I will be suspending trades prior to fed announcements, the volatility around this time is too hard to trade around.

4) Avoid the temptation to close out winning trades manually. This might seem a good idea at the time but more often that not it will limit the upside to winning trades.

There are a couple of other mistakes made, but these 4 are the most important.

In the next blog entry I will write about the system I have devised for evaluating signal providers and setting stop losses.

Monday 26 September 2011

Zulutrade First Week

Day 1.....Account up 7%, the theory is working in practice. The system seems too easy, why isnt everybody doing this I ask myself. Nevermind we dont want everybody to find out about it.

Day 2......Not much going on today. Canadian FX Signal provider made 2 trades worth around 9 pips, account is still moving in the right direction. My plan to double my money within 6 months is on track.

Day 3.......Account down 25%. This was not supposed to happen, must increase stakes to make up the money.

Day 4.....Situation is becoming critical, account is down 35%, a number of open positions are worryingly in the red (-200 pips) and appear to be going against the trend. Dammit.

Day 5.....I am forced to close out positions and disable the account, every trade seems to be going against me. The signal providers I am following are doubling down on bad trades. Wow this is not going to plan, I realise I have picked the worst week to start trading. Stories of a Greek default are all over the news and Operation Twist has sent the markets into a frenzy of volatility.

Demoralised and discouraged I end the week down £168 (1099 pips) . I think I need a drink

Friday 9 September 2011