My CFD Journey: Day 2 Up $8 000
Today was an interesting day. I followed the speech of Donald Trump live and tried to see if I could pinpoint a good buy or sell order based on his speech. He was mostly positive about the American economy and there was little to no new information that could give a strong indication on what to trade. Then I waited for the GDP numbers by the US. The GDP was expected to be at 3.0%, while it came in at 2.6%. It was lower than expected by analysts and I thought this would be a good day to short Dow Jones. I initiated a short call on Dow Jones at 26442. I could have taken profit a couple of times, but I decided to wait it out a couple more hours. Unfortunately, this trade did not correlate with my own rules. I traded against the trend. I keep arresting myself for making stupid mistakes like this even though I’ve pledged to follow my own rules, which are as follows:
- Only risk max 2% of my bank roll per trade.
- Have 0 active positions during the night (first of all, I lose sleep, second; you are charged an interest fee for leaving a leveraged product overnight.)
- Always trade on last month’s trend including the previous day(s). If they do not correlate, I will not trade.
- If one position is lost, I’ll double the amount (martingale) and do a second trade. I’ll only stop doubling after 3 consecutive losses.
- Do not think about lost trade opportunities.
- Markets to trade: Dax & Dow (minimum spread).
- Stay updated on economic releases prior to entering a trade.
- Do not have emotional ties to the money. I like to call them “points”.
As you might expect, that trade went horribly wrong and I lost all the gains I had yesterday. However, since I’m using the martingale principle, I initiated a second trade, shorting Dow Jones (AGAIN!) at 26465. While doing that, a notification from CNBC popped up on my phone saying:
Treasury Secretary Mnuchin says a stronger dollar is in the best interest of the country.
I immediately looked into shorting GBP/USD, but since I already was in a trade (unfortunately), I left that opportunity. That was a mistake, as GBP/USD fell with more than 500 points right after. But as the rule tells me: Do not think about lost trade opportunities.
My second Dow Jones short call ended up with an even bigger loss.. And I ignored my own rules for the second time. (Damn it’s hard.) Then I initiated my last trade for the day; I shorted Dax at 13342. This was a bit safer call as it was at its peak and the market was soon to close. I have experienced that just before a market closes, you can see sudden price changes. This was a trade more aligned with my trading rules, as Dax has been in a decline the last week. And yeah, I knocked that ball out of the park and ended up with 59 232 NOK in total profit, approx. 8 000 USD. I’ve now “made” $14 000 in two days.
|Day||Date||Asset||Order||Entry Price||Take Profit||Stop Loss||NOK||Bank Roll NOK|
|Day 1||25.01.2018||Dax||Buy||13268||13274||13262||50 162,00||2 050 162,00|
|Day 2||26.01.2017||Dax||Sell||13342||13318||13392||59 232,00||2 109 394,00|
I would like to highlight that this is a very risky trading strategy, and shouldn’t be followed unless you can comfortably lose your bank roll.
I wish you all a great weekend. My family and I are going for some sushi.