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My Trading Blunders: A Lesson in Overconfidence and Risk Management from 2008

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The Background

This story happened in January 2008 in what proved to be the early days of the biggest financial crisis of our generation (so far). It was also the time of your humble writer’s baby steps in the financial market. Fun fact: my first trading account was opened in September 2007, 10 days before the exact top of the bull market. Great timing. To be honest, this was more of a lucky coincidence for me than the average beginner trader, as I wrote my thesis a few months before that on credit markets, CDSs and whatnot, so I had a pretty good idea about the sorry state of the US subprime market, which was already in shambles in the autumn of 2007. I even made a bet on with a great friend that Lehman will trade in single digits in a year… color me prophetic. An important side note is my poetically young age of 24 at the time.

Some experienced traders might stop reading at this point because the ingredients are all there for a sad, but all too common, trading disaster. A young, beginner trader with an eagerness to outsmart the market, a degree that makes him think that he already has trading figured out, and the worst blessing of all: he is right about something. The dangerous thing about being right at the right time without experience is that ALL your trades are working and you quickly forget about risk management, money management, position sizing, and the other neat things that are there to protect your capital from the biggest enemy, your ego.

It took me 5 months to reach a +25% return on my portfolio, by trading with a bearish bias in a market that was clearly rolling over. Some would say that ok nice, but nothing extraordinary. For me, it was the best of times. I was euphoric, since I was trading with a 2% stop-loss limit and a 3% initial target on my capital, and 90% of my trades were positive. Being a math guy, I naturally started compounding those returns and quickly concluded that I will be the next Paul Tudor Jones.

The Trade Of The Century

In February, 2008 it took me exactly 0 trading days to go from +25% to -10%, and at the end of 2008 I was up by 5%, in a market that was doing exactly what I thought it would. How on earth did that happen? Well, overconfidence and weekend gaps were among the main reasons, but the root of the issue is the common error of looking for the “Trade of The Century”.

Disaster struck on a Friday afternoon on a typical Friday-Trend-Day. Day-traders might be familiar with the pattern of an initial surge (or slump) and a gradual but unstoppable drift in the direction of the trend, with sometimes a buying (selling) “panic” near the end of the session. It was a bearish trend-day, with all the major indices down by multiple percents, the VIX near the 40s, Armageddon-like headlines… one could almost hear the cries of fear and despair through the trading platform.

My portfolio was up by 5% on that day, my trades hit their targets one after the other (I was trading S&P futures, FXI (the main Chinese ETF), Morgan Stanley, and VIX futures). Near the end of the session I was watching my market window with sheer excitement (error #1), and with deep regret that I am out of my positions and not profiting off the massacre (error #2). Although all of the indicators were screaming Oversold!! I started thinking about new positions (error #3). And in a moment of pure genius, I decided to double, oh wait, triple (!!!) my original position sizes (error #4 and #5). I thought it will be a “Black Monday” like open after the weekend, with the indices limit down and me walking away with 2 years of returns in one day. Sure enough, I put up the shorts on the indices and Morgan Stanley and the long on the VIX before the market close with a devilish smile on my face (error #6), while violating ALL of my risk management rules (error #7) and forgetting about gap risk (error #8).

The Fallout

The VIX at the time of the trade

The rest is history. It was the first in a series of bail-out weekends when central bankers and other leaders would sit down and come up with a plan to restore confidence and save the market during the crisis. By the US open, all of my positions were stopped out, and my stock shorts simply gapped over my stops, inflicting even more damage than I thought would be possible. I still remember the feeling when I saw FXI opening up by 10% (a stock index mind you); it was not pleasant. I lost a whopping 30% on my portfolio, and got sent back to square one, or more like square -2. I quit trading for a few weeks, which probably saved me from more losses, but after that, I needed a few more months to gather enough confidence to trade normally again.

The hardest part to accept was the fact that I was fully aware of the errors in real-time, I just shrugged them off with “I feel the rhythm of the market and it’s going lower” argument. That argument was fed by the feeling of being right, and almost invincible. On a positive note, these trades made me remember that I am no prophet, no analysis is perfect, and the weirdest things can happen in financial markets.

The Takeaway

This wasn’t my only mistake as a trader (I wish it would be), but for sure the most painful. Good thing is that you can learn a lot from it without committing the same errors that led to it. Simply put, don’t let your greed or fear overwrite your trading plan and your risk management rules. Don’t get me wrong, concentrated trades are great for experienced traders who are aware of the risks that they take on, but forgetting the negative part of the deal is unforgivable. In this case, I not only broke my own rules, but also ignored the fact that the assets I traded were highly correlated, so in reality, I had one huge position not 5 separate ones.

Stock correlations rise in times of crises (source: Business Insider)

Let’s sum up the most important lessons:

  • Follow your trading rules, no matter what
  • Being right is not the same as being profitable
  • Expect the unexpected in financial markets
  • Don’t look for the Big Trade
  • Be aware that market conditions can change quickly
  • Correlation sometimes negates diversification

A Timely Note on Cryptocurrencies

With the recent boom in cryptocurrencies, a lot of traders might feel like I did back in 2008; the blockchain technology is revolutionary, Bitcoin is the new gold, the market is headed for $1 trillion in market cap and you will make a fortune by investing in this technology. Remember, even if that is true it doesn’t mean that throwing caution in the wind is allowed when investing or trading the coins. Stress-test your positions with corrections up to percentage losses that might seem insane (50%, 60%, even 70%). Booms and trends in general, don’t move in straight lines, there are several emotional waves and bumps on the road.

When trading cryptocurrencies, don’t rationalize holding on to a losing trade with the “it will come back” argument. It might, but will your capital survive that, or will you panic out at the bottom? Also, in a broad correction holding several different coins might not mean that you are diversified. When the tide turns the currencies might go down together. Look at the big picture, especially when trading cryptocurrencies, and accept what the market is telling you.

As an investor, if you are in for the long run, don’t try to micromanage your holdings or catch exact turning points. Wait for deep corrections to load up, and strong rallies to ease out of full exposure if you want to trade in to the trend. This way you won’t get caught in the daily fluctuations and won’t mistake trading with investing.

What’s Your Story?

I hope that this story will help you in your path to financial freedom, and you will remember the lessons of it when the time comes. Please feel free to share your experience, trading errors, or questions regarding this post so we can all learn from it. I am positive that all traders have some similar (hopefully less painful) stories to tell.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 398 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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13 Comments

13 Comments

  1. jedadoo

    May 16, 2017 at 7:00 am

    This is wonderful. Thank you so much for sharing and keeping us grounded. I’ll take this to hear!

  2. Lukem

    May 16, 2017 at 10:42 am

    Thanks for story, I do enjoy your blog and the whole website. I really am interested in trading but I’m struggling at the moment. Would you be interested in mentoring me?

    • Mate Cser

      May 16, 2017 at 3:35 pm

      Hi Lucas,

      I am glad that you enjoy the site! We have a personalized mentoring solution in the works, we will keep you posted on that. Until then feel free to ask anything in the comments, it might help other members as well. Believe me, all traders face bad times, with similar psychological hurdles. We are here to help overcome them!

  3. pgobbato

    May 16, 2017 at 8:23 pm

    This all rings so familiar, thank you for sharing. I got into the crypto trading world a couple months ago. I caught the boom, and placed my investments well, and doubled my initial investment and then some. On a big rush from winning, I opened a huge margin long position… You can imagine what happens next. Poloniex down, couldn’t close position, by the time I could take action again my account was about to hit maintenance margin. Thinking it couldn’t go down any more, I kept my position open. That night it rock bottomed, my account was liquidated, lost about 3/5ths of my portfolio.

    Tough lesson to learn, could have been worse, I suppose. Thanks you again for sharing!

    • Mate Cser

      May 17, 2017 at 12:56 am

      Thanks for sharing this tough experience, it’s not easy to resist the euphoria and the greed. Don’t let this stop you from harvesting strong trends, just have a risk management plan, and stick to it. Holding a core position, and trading with a smaller amount usually helps with dealing with the “Fear of Missing Out”. Good luck out there!

    • majykman

      May 17, 2017 at 2:21 am

      wow I just realised our comments basically have the same story haha. Good to learn this kind of lesson early though.

  4. majykman

    May 17, 2017 at 12:25 am

    Great article. Very relatable. Polo has been hitting people hard recently with the ddos attacks at crucial times. I’m new to trading really and I got confident because I’ve joined the game at a good time and just seem to make all the right calls until Polo crashed seconds before I tried to close a margin. That’s when I realised I don’t know half of what I need to know about trading haha. I left stop loss of one time and bam that one time. But the choices I made is why I lost 80% of all I’d made that month and now it will take more then a site crashing for a while to make me take such a loss. Lot’s of lessons learned.

    • Mate Cser

      May 17, 2017 at 1:21 am

      Thanks! I am glad you realize that it’s not just the exchange’s fault, that’s the good mindset. Thing is, when the market moves quickly, crazy things happen – glitches, flash crashes…- so again we have to expect the unexpected… Thanks again for sharing!

  5. Mac

    May 23, 2017 at 10:55 am

    Thank you for sharing such valuable lesson. I just recently learned my lesson when I dumped all my Bitcoins into Ripple after it had already nearly peaked. I then panicked and changed my entire position back to Bitcoin and woke up that morning only to discover Ripple still climbing. However, it was truly now at its peak and I still changed back to Ripple. It began falling and I kept changing my positions to other coins that didn’t move. By the time I slapped myself to wake up my portfolio was down by 25%. Fortunately I was able to partially recover and I’m now down by 12%, but it’s a lesson I’ll never forget.

  6. Elyad

    June 10, 2017 at 4:49 am

    a week ago I made a mistake and bought peer coin in hype at 0.00105 and now its 0.00077.
    what should I do in this situations? should I buy and accept the loss or sell and invest in other oppotunities like byte coin ?

  7. kennymeyer

    August 25, 2017 at 2:51 am

    Wonderful story… I can relate to your story about losing money… I went all-in on a stock (NVDA) a few weeks ago with 10x leverage, and lost almost half of my money by panicking out. Looking forward to be a better trader and investor.

  8. vlm4life

    December 19, 2017 at 12:16 am

    Very powerful. I’m long term and i found that your insight, “don’t try to micromanage your holdings or catch exact turning points….This way you won’t get caught in the daily fluctuations and won’t mistake trading with investing.”, to be VERY valuable, as that I what i’ve been doing the last week,…checking the trends too much!

  9. kendrickmane

    December 28, 2017 at 4:34 pm

    Thanks bro this blog is really helping me to get a stable mindset i paid for the week trial i was aprhensive at first, but most people are penny wise and dollar foolish.
    I decided to stop being dollar foolish, you have soldified my respect.

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“The Core of Any Blockchain Project is Decentralization” – Jack Zhang, Lightning Bitcoin

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Lightning Bitcoin is a fork of the ‘first-crypto-currency’ Bitcoin about which we decided to take the opportunity recently to speak to advisor Jack Zhang (AKA DianfuDatou / 点付大头 – known best as a Founder of Chainfunder and DAF).

Discussion topics include: what makes this project unique, as well as how you shouldn’t get it confused is not to be confused with the Lightning Network upgrade which is being applied to the original ‘Bitcoin’.

Who is Jack Zhang

Jack Zhang (AKA DianfuDatou / 点付大头) is a Chinese investor, business leader, and entrepreneur whose “portfolio includes XRP, XEM, IOTA, NEO, EOS, TEZOS, VEN”.

Zhang proudly describes himself as “one of the leading advocators of Ripple in China” having “translated Ripple into Chinese as ‘ruibobi’” – as well as the co-founder of NEO. Please note that most sources ascribe this latter achievement regarding NEO to an ‘Erik Zhang’ and so this claim requires further confirmation – however this writer sees no reason for him to lie in this respect.

He claims that his first experience with cryptocurrency was in 2011, when he entered the industry himself having previously worked as an investment banker at companies such as Zhejiang investment bank.

“I bought more than 10 thousand bitcoins at the price of 5 dollars and sold all of them out at the price of 7 dollars. At that time, I remember how I was reading posts on Bitcointalk about blockchain for several months and got fascinated by the genius design of the technology.”

Zhang says that the Lightning Bitcoin team members “come from a diverse cultural background, including China, the United States, Canada, the UK, Russia, Germany, and India.” And that:

“Currently Lightning Bitcoin has four core developers (listed on the website) with a team of 6 specialists. Eason Zhao is a CTO and H.H.Wang is a leading developer.

“Lightning Bitcoin also has an operational team of 8 outstanding and hardworking people managed by Wasley together with a community manager James Vuitton… We have independent leaders for each directions of the business;”

What is Lightning Bitcoin?

According to Zhang, Lightning Bitcoin is “a coin that takes the best from existing blockchain titans and adds advanced consensus mechanism.”

“Lightning Bitcoin forked from Bitcoin blockchain at block height 499,999… Lightning Bitcoin (LBTC) is a fully decentralized Internet-of-value protocol for global payments.

“The specific applications include peer-to-peer transactions and exchange platforms. Any users that operate on the LBTC protocol can enjoy instant, secure and nearly free global financial transactions of any size.”

Lightning Bitcoin is far from the first (nor will it be the last) fork from Bitcoin. A number of observers have claimed that the correlation between new forks and over inflation of Bitcoin. Jack Zhang however sees it as follows…

“Back in 2017, Bitcoin blockchain started to face network congestions, and a lot of other problems, that is one of the reasons why there were so many hard forks popping up. However, all of them changed either size or difficulty adjustment, what in my opinion did not improve the situation. That is a consensus that makes the difference. Pow and PoS are easily centralized, while DPoS represents true decentralization. Moreover, DPoS has the benefit of high efficiency, with little resource consumption.”

This mechanism utilises the relatively young Distributed Proof of Stake (DPoS) protocol which this writer has written about in a recent article, despite its basis upon the Proof of Work (PoW)-based ‘Bitcoin’.

Zhang states that Distributed Proof of Stake “allows separation of the voting power and block production, with no risks of a hard fork.” In fact, the aftermath of the announcement of DPoS adoption coincided with the company taking on another of its advisors “Stan Larimer a founding partner of Bitshares… we found mutual interests, as a result Stan joined Lightning Bitcoin advisory board.”

“Lightning Bitcoin uses DPoS, with the forging interval of 3 seconds, and the block size of 2M. We have achieved the TPS of thousands of transactions.

“Anyone can use LBTC, without censorship. The transaction fees are charged only for preventing network security issues, like DDoS attacks. It is not an off-chain solution on top of the Bitcoin blockchain as Lightning Network. I personally believe that Lightning Network will face the problem of centralization eventually.”

Furthermore,

“Lightning Bitcoin’s on-chain governance system enables LBTC holders to vote for the blockchain improvement proposals and the delegates who maintain the network as Lightning Nodes. It solves the problems of centralization of bitcoin by incorporating all participants in the Lightning Bitcoin ecosystem into the decision-making process.”

Lightning Bitcoin vs Lightning Network

Due to the similarities in naming, it seems natural that there may be a little confusion on behalf of the public and crypto-investment community with regards to the differences between ‘Lightning Bitcoin’ and ‘Lightning Network’.

“There is some confusion, you are correct.

When Lightning Bitcoin forked in December 2017, for Lightning Network it was still unclear when it is going to be launched, since it was still at the internal testing stage; only after four months later, in March 2018 when Lightning Network released its beta, both projects started to be confused by users in some countries.”

This, according to Zhang, is actually a problem more specific / limited to region,

“In other countries, like China, lightning network is not that well-known, as well as it has different Chinese name, that gives us more room for the development in Asia.”

Present and Future of LBTC

“Currently, Lightning Bitcoin network is stable, we constantly improving its functions and adding more products.

“The next big step for LBTC that we are working on right now is the development of on-chain governance, that will allow the network to self-improve and self-upgrade.

“In the future, stable upgrades of Lightning Bitcoin network in combination with chain governance, and decentralized transactions will allow cross-chain flashovers and smart contracts… the exploration of the on-chain governance model will become one of the most important tasks in the current stage of LBTC.”

Zhang continues to discuss the future for the coin in-detail as well, including that:

“In short, after complete integration of on-chain governance, next milestone is the development of new decentralized exchange. It will be an important component of the LBTC payment function.

“This exchange will have both basic functionality such as flashovers function of the gateway, as well as a system to guarantee the ease of cross-chain operations. Additionally, it will have the function of early crowdfunding of project under the necessary supervision.”

Finally,

“After implementing and perfecting the decentralized exchange, the development of intelligent contracts based on the UTXO model will be carried out, and a high-concurrence-based public chain ecosystem will be established to guide the flow of DAPP traffic.”

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Trans-Fee Mining: Investigating FCOIN and The Future

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Trans-fee mining’ is a concept utilised by a growing number of projects and exchanges which has not received much in the way of critical attention recently from either mainstream financial or specialist cryptocurrency publications.

The Fall of F-Coin?

Thanks to a company called FCOIN, most of the news which has appeared has been negative. Statistical information regarding the exchange can be found at popular aggregate ranking website CoinMarketCap.

Despite positive coverage earlier this year from the likes of Forbes’ Andrew Rossow, David Hundeyin of our sister site CCN.com wrote more recently that the exchange had been “Accused of Crippling Ethereum Network for Cheap Publicity” with a supposed aim of gaining publicity.

These pundits are joined by community members such as Reddit poster u/ltcisking (along with a large amount of other concurring, Google-topping results), who recently wrote a post aimed at proving such allegations, entitled ‘One of the biggest scams to ever hit Crypto’.

Twitter has also seen its fair share of investor complaints as well, including the following…

As well as the replies to this post,

What is Trans-Fee Mining?

Due to the unusual circumstances in which the ‘trans-fee mining’ sits (being supported by a number of independent projects despite the reputation of FCOIN): it is a difficult methodology to describe.

It builds upon the concept of the ‘exchange token’: which is most often associated with coins such as BNB (Binance Coin), which can be used for staking towards a particular crypto in the exchanges ‘community coin of the month’ program.

The original FCOIN implementation appeared to build upon this vision at first. The token’s value is derived from the fact that it has a stable value, and that it can be used on-platform (like BNB) as a means of purchasing other tokens whilst offering regular returns on investment for long-term holders of the token.

What is FCOIN Doing Now?

FCOIN has issued various statements which appear to support the sentiment behind the claims which they have faced. These include a recent August 14th post, with the telling title ‘FCoin community referendum end and recent plan publicity’.

Highlights of the piece include new objectives such as

“1.Complete and publicize the destruction of the remaining unissued FT.
“2. Complete the delivery of all FT warrants and withdraw the FT warrants from the market…
“4. As of the end of the referendum, the previous trans-fee refund will remain unchanged (based on the price of the FT related trading pairs before the suspension), and then, all the trans-fee refund will be stopped (including all return plans based on FT issuance).
“5. We plan to establish an FCoin mechanism and an announcement cleanup team. The team untied and improved the current FCoin mechanisms and standardized the release of various mechanisms in the future, and made a unified interpretation.”

At best, this may be an admission of fault, and at worst: an ambiguous and uninformative piece of messaging which fails to outline the situation with a strong brand or executive voice.

This comes in addition to a couple of announcements regarding ‘compensation planning’ with regards to investors who had “participated” in the fundraising of the ‘GU’ and ‘QOS’ tokens through their service.

The latter included the assurance that this process “compensation plan is an initiative taken by the platform to protect the interests of community user” concluded with the damning statement that:

“The FCoin platform has informed the QOS project parties and urged them to conduct self-examination of market price fluctuations and recent media reports as soon as possible. It is not excluded to take delisting and other related measures. The specific plan will be subject to the subsequent announcement. During this period, QOS will be temporarily suspended.”

Torch-bearers of Trans-Fee Mining?

Various claims of discrepancy against FCOIN’s actions as a company however, have not discouraged many projects which are attempting to build their own version of trans-fee mining. Whether or not they have been inspired by the short-lived success of FCOIN’s implementation is yet to be confirmed!

One of the most recent organisations which has decided to foray into this difficult and all-but-controversial territory is BitMart, an exchange founded by current CEO Sheldon Xia. Their approach is branded ‘Mission X’, and utilises their proprietary ‘BMX’ token.

“All transaction fees from the BMX market will go directly to the users who supported the project. In addition, successful projects will enter BitMart’s main trading markets.

“This program gives users the ability to decide which projects they want to be listed on the exchange, creating a self-regulated market.”

The platform piqued this writer’s attention upon noticing a disparity between public consensus and professional news coverage. Whilst the latter has published next to nothing with regards to the platform, a quick search of social media and communities such as forums seem to illustrate a positive and transparent image.

CoinEx was recently reported to have achieved unprecedented growth following the release of their token – however, like FCOIN have been called out for discrepancies. This time regarding the faking of volume metrics.

Final Thoughts

It appears that trans-fee mining as a concept is a long-way from earning this writer’s confidence, however it must be noted that there are many promising aspects. Time will tell whether talent will shine through or if trans-fee mining will fade out at the hands of opportunists.

What is important to note is that it is not the technology or idea, but the hands that are operating the machine incorporating it.

This writer cannot directly recommend the concept in its current state, but believes that the original idea is solid and if implemented in a viable way: would thoroughly warrant the full attention of any potential investor.

Until then, watch the community and keep an eye on the media – as well as word-of-mouth as this flawed-yet-promising idea is if nothing else, highly interesting!

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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My CFD Journey: 72,000 USD Up Today

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Wow the indexes are falling globally now. Dax is down with 1% today – same as Dow Jones. I would love to do a short call on these indexes, but that have seriously hurt my financial standings previously since we still are in a “bull” market with earnings reports beating forecasts and macroeconomic numbers excelling analysts viewpoints. I only want to trade by using trend following, so even if the markets are down, I love to do short buy calls as they most likely will rebound to new ATH (all time highs). The reason for just doing short buy calls is that we might be on the tipping point to a bearish market, but that’s something I would like confirmation on from e.g. macro numbers, earning reports and such. Until then, I’m quick in and out.

Here is my results

Order Entry Price Take Profit Stop Loss USD Bank Roll USD % Change
Start 258 064,52
Day 1 25.01.2018 Dax Buy 13268 13274 13262 6 472,52 264 537,03 2,51
Day 2 26.01.2018 Dax Sell 13342 13318 13392 7 642,84 272 179,87 5,47
Day 3 29.01.2018 Dax Buy 13331 13336 13313 12 508,39 284 688,26 10,32
Day 4 30.01.2018 Dax Buy 13226 13233 13176 6 625,94 291 314,19 12,88
Day 5 31.01.2018 Dax Buy 13217 13230 13187 26 474,06 317 788,26 23,14
Day 5 01.02.2018 Dax Sell 13291 13265 13327 10 834,58 328 622,84 27,34
Day 6 02.02.2018 Dax Buy 12797 12825 12772 72 314,97 400 937,81 55,36

Using ProRealTime

As I wrote yesterday, I’m using IG.com to trade CFDs. They got a tool called ProRealTime that I started to use yesterday. It’s a great tool with many more indicators and tools, and best of all, you get a good look at your stats. Here is my stats so far on ProRealTime in NOK (1 USD = 7.65 NOK – click on the images to get a larger view):

As you can see from the image above, I got 8 winning trades and 1 losing trade. I tried to buy the dip on Dax but managed to enter a bit too early. The Dax index fell quite rapidly after I initiated this trade and I wanted to keep it open as long as possible as I knew a rebound would happen. But I was not comfortable enough to sit it through so I closed it. Still feeling certain that the price would rebound I entered a buy position yet again at what I thought would be the lowest low. And thankfully, that worked and it rebounded above my initial entry point for the first trade. To ensure that I got the profits I wanted, I did a third trade buying Dax when RSI showed a trend reversal (rose above 50). I closed the trades once I was happy with the profits and because I became nervous that the price would turn back down. Then I initiated the last trade of the day going long on Dax yet again.

Here is the total overview of my trades today:

I would again like to highlight that trading CFD is very risky, and I’m still significantly down in total these last 3 years.

My trading rules

  1. Only risk max 2% of my bank roll per trade.
  2. 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.)
  3. Always trade on last month’s trend including the previous day(s). If they do not correlate, I will not trade.
  4. 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.
  5. Do not think about lost trade opportunities.
  6. Markets to trade: Dax & Dow (minimum spread).
  7. Stay updated on economic releases prior to entering a trade.
  8. Do not have emotional ties to the money. I like to call them “points”.
  9. Only enter a position when an asset is overbought or oversold shown by both RSI & Stoch at the same time.
  10. Always write down your trades and elaborate what went right or wrong.

What is the meaning of this?

Why I’m I writing all these posts? My main goal is to find a working strategy trading CFDs and be able to mentor Hacked.com members and do live sessions together. However, I would like to keep going for at least one month until I feel comfortable that the strategy I have, actually works. I would rather lose my own money, than lose any of yours.

I wish you all a great weekend. We are going to visit our family this weekend and have a nice time.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.2 stars on average, based on 56 rated postsFounder of Hacked.com and CryptoCoinsNews




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