Month: March 2014

Forex Million Dollar Journey Account Up 50% This Week!

Image

The “Million Dollar Forex Journey” account started the week at $124 and currently stands at $200 (as of Thursday afternoon).  We’re doing pretty well so far, right?

If there’s one key to this trading strategy, it’s low risk entries.  I take some trades that aren’t strictly by the basic Dance strategy that I’ve outlined.  Let’s look at one that’s a good illustration of other things I look at when considering a trade.

Image

I took this trade, buying Aud/Usd just above .9060, despite the fact that the market had been crushed in the previous day’s trading and had gapped down sharply on the open.  So what led me to buy it? – Several things.  First, despite the tumble down, Aud/Usd had held up fairly well compared to the smackdown that Gbp/Usd and Eur/Usd had suffered – so even in weakness, that looked like some potential strength.  Second, it had just gotten a fairly nice 15-minute candle bounce off the .9050 level (long wick on the bottom side, and a strong close), yet still had a considerable gap to fill from the open.  And that was my third consideration – I figured there was a pretty good chance of it moving up at least enough to fill that gap.  Another very important factor in my decision: Confluence of support points.  The confluences were as follows:  Price was just above the 200 MA on the hourly chart, the 50 MA on the 4-hour chart, and the 50 MA on the daily chart as well.  (Although I’m trading primarily off the 15-minute chart, I regularly change the time period to see how the market looks from higher time frame perspectives.)  There was also a daily pivot support line around .9060 – so that’s 4 different significant supports for the market, all right around that .9050 to .9060 level.  I did have to risk a bit more than I ordinarily like to when initially opening a trade – running my initial stop down at .9042 – but that was still a reasonably limited risk compared to the upside potential of the trade (and, in fact, the market just headed right on up from there and never got anywhere near my initial stop).

Oh, one other factor in that trade – It was the very beginning of the trading week, so I figured that even if I did end up taking a 20 pip hit, I had a whole week to make up for it.  I’d have been less inclined to take the same trade near the end of the trading week.

Something I wanted to note about our journey here – I realize that the absolute dollar amounts we’re dealing with at this point are not exactly a fortune.  But here’s the thing – doing the exact same things I’m doing now to make $10 a day, when the account is up to $2,000, will make $100 a day; when it’s up to $20,000, will make $1000 a day.  Try to keep that in mind – we’re learning, with relatively small amounts of money, how to, later on in the million dollar journey, make very large amounts of money.  Plus, $200 may not be a fortune, but $150 is still a very nice 2-week return on just a $50 investment, right?

I’ve appended, at the very bottom of this article, a reference chart that shows the ideal day-to-day account growth, all the way to a million dollars.  Now of course actual trading isn’t going to go exactly like that, but the chart is the reference guide I’m using to figure out what kind of profit to aim for each day/week, and what lot sizes I need to be trading (obviously the lot sizes traded necessarily increase as the account grows – somewhere between the $200-$300 level of equity, I’ll be moving from .05 to .10, 10 micro lots, as my standard lot size).  In any event, I just wanted you to see that this steady growth rate, although it may seem like little money in the beginning, it pretty quickly becomes big money.  Looking at the chart, you can easily see how, even from our next-to-nothing starting point, one could be earning a living from trading within the space of just a few months.  I don’t know of many businesses besides forex trading that you can start with only $50, and within 6 months be making $1000 a day.

Characteristics of Currency Pairs

If you engage in forex trading long enough, you’ll become familiar with the little quirks and characteristics of each major currency pair.  Here are some things I’ve noticed about the major forex pairs.  These aren’t hard and fast rules of operation, but they are tendencies, things to keep in mind as you trade the forex market.

1 – Aud/Usd: The Rule of 4 and 6 – Again, let me stress this is not a hard and fast rule, the pair won’t always behave this way.  Nonetheless, I’ve noticed the following common pattern in Aud/Usd.  Going down, if it drops lower than the “4” level, it probably goes on down to the next “0” level and possibly lower.  Example:  If I’ve bought Aud/Usd just above .9050, I’ll usually place my stop just a bit below the .9044 level – It’s been my experience that if it takes out that “4” level, it probably drops on down to at least .9040.  In other words, if I get stopped out at .9043, I probably would have been stopped out even if I’d placed my stop a bit lower, around .9040 or even .9039 – so maybe I save a few pips and minimize my loss by placing my stop at .9043.  Conversely, if Aud/Usd is going up, if it makes it to the “6” level, it usually goes on up to the next “0” level and maybe higher.  Example:  Aud/Usd is trading just above .9080 – if it makes it to .9086, then it probably reaches at least .9090.  So, if I’m long Aud/Usd and I see that .9086 level breached, I’m more inclined to think that I can get a few more pips out of the trade.

2 – Gbp/Usd:  Gbp Tests Everything – Gbp/Usd will usually test tops and bottoms more frequently and more fiercely than the other major pairs – at least, that’s been my experience.  It can be frustrating if you happen to buy around a near-term low, only to see Gbp/Usd threaten your stop over and over again as it starts to move off that low, but then backs up to it several times.  The good thing is that if a particular price level withstands Gbp/Usd’s multiple tests, then Gbp/Usd tends to finally rocket away from it, making a substantial move in a short period of time.  Gbp/Usd, in my opinion, is also king of the fake-out spike.  For example, just prior to a big, sustained move upward, it will often make a quick, dramatic spike to the downside, sometimes in even less than a minute.  This is particularly true if it’s been flat-lined at about the same price level for a period of time.  It almost acts like a high jumper who, before making his jump, wants to first back up and get a good running start.

3 – Eur/Usd:  Scared of News – When there are even moderately important news announcements or data releases, Eur/Usd seems to me to be the pair that initially reacts the most skittishly or erratically, zig-zagging up and down before choosing a direction.  I’ve seen relatively unimportant data releases come out, and where Gbp/Usd and Aud/Usd barely moved at all in reaction to them, Eur/Usd fluctuated wildly, 10 pips or more for a minute or two before settling down.  How is it useful to know something like this? – If you’re in a trade and the market is near your stop, and there’s any kind of data release due out in the next few minutes, you may want to consider either closing the trade (assuming your stop is probably going to be hit anyway) or temporarily moving your stop a bit further away from the current price just to allow for a momentary price fluctuation against your position.  (This does not apply to major data releases like CPI and the NFP, releases that nearly always result in large price fluctuations in all of the major pairs.)

I ran across a useful tool that you can download for free from the Currency News Trading web site.  It’s a “currency strength meter”, a tool that basically indicates the current market strength of each of the major currencies (usd, eur, gbp, chf, jpy, aud, cad, nzd).  The good thing about this tool is that it calculates how a given currency is doing overall against the other major currencies.  I may only be watching Eur/Usd, but this calculator also factors in how the Euro is doing against JPY, CAD, GBP, CHF, and AUD – pairs that I may not be actively watching.  How can you use a tool like this? – Say you’re in a buy trade in Eur/Usd, but the strength meter shows that overall – taking into account all the other major currencies the Euro is traded against – that the Euro has been weakening over the past hour or two.  You might then want to consider at least tightening up your stop in case it starts to weaken against Usd, too.

All right, that’s enough for this week – Be back here next week and we’ll look at some more trades, talk about good trading principles, and…well, I’ll think of something fun to do.  🙂

As always, I wish you great fortune in all things.  Please comment below and share this article around (there are easy sharing buttons on the left hand side of the page for Twitter, Facebook, Google+ and LinkedIn).  See you next week!

Jack Maverick

Jack Maverick is a writer and forex trader.  Find him on Google+ at https://plus.google.com/u/0/103534926809963693894/?rel=author  and check out his novel, the psychological thriller “A Cross of Hearts”, on Amazon at http://www.amazon.com/Cross-Hearts-J-B-Maverick-ebook/dp/B006GHJ0ZC/

Million Dollar Forex Journey – Day to Day Ideal Account Growth

Day#

Start Balance

End Balance

Daily Account Gain

1

$100.00

$105.00

$5.00

2

$105.00

$110.25

$5.25

3

$110.25

$115.76

$5.51

4

$115.76

$121.55

$5.79

5

$121.55

$127.63

$6.08

6

$127.63

$134.01

$6.38

7

$134.01

$140.71

$6.70

8

$140.71

$147.74

$7.03

9

$147.74

$155.13

$7.39

10

$155.13

$162.89

$7.76

11

$162.89

$171.03

$8.14

12

$171.03

$179.59

$8.55

13

$179.59

$188.56

$8.98

14

$188.56

$197.99

$9.43

15

$197.99

$207.89

$9.90

16

$207.89

$218.29

$10.39

17

$218.29

$229.20

$10.91

18

$229.20

$240.66

$11.46

19

$240.66

$252.69

$12.03

20

$252.69

$265.33

$12.63

21

$265.33

$278.60

$13.27

22

$278.60

$292.53

$13.93

23

$292.53

$307.15

$14.63

24

$307.15

$322.51

$15.36

25

$322.51

$338.63

$16.12

26

$338.63

$355.57

$16.93

27

$355.57

$373.35

$17.78

28

$373.35

$392.01

$18.67

29

$392.01

$411.61

$19.60

30

$411.61

$432.19

$20.58

31

$432.19

$453.80

$21.61

32

$453.80

$476.49

$22.69

33

$476.49

$500.32

$23.82

34

$500.32

$525.33

$25.02

35

$525.33

$551.60

$26.27

36

$551.60

$579.18

$27.58

37

$579.18

$608.14

$28.96

38

$608.14

$638.55

$30.41

39

$638.55

$670.47

$31.93

40

$670.47

$704.00

$33.52

41

$704.00

$739.20

$35.20

42

$739.20

$776.16

$36.96

43

$776.16

$814.97

$38.81

44

$814.97

$855.71

$40.75

45

$855.71

$898.50

$42.79

46

$898.50

$943.43

$44.92

47

$943.43

$990.60

$47.17

48

$990.60

$1,040.13

$49.53

49

$1,040.13

$1,092.13

$52.01

50

$1,092.13

$1,146.74

$54.61

51

$1,146.74

$1,204.08

$57.34

52

$1,204.08

$1,264.28

$60.20

53

$1,264.28

$1,327.49

$63.21

54

$1,327.49

$1,393.87

$66.37

55

$1,393.87

$1,463.56

$69.69

56

$1,463.56

$1,536.74

$73.18

57

$1,536.74

$1,613.58

$76.84

58

$1,613.58

$1,694.26

$80.68

59

$1,694.26

$1,778.97

$84.71

60

$1,778.97

$1,867.92

$88.95

61

$1,867.92

$1,961.31

$93.40

62

$1,961.31

$2,059.38

$98.07

63

$2,059.38

$2,162.35

$102.97

64

$2,162.35

$2,270.47

$108.12

65

$2,270.47

$2,383.99

$113.52

66

$2,383.99

$2,503.19

$119.20

67

$2,503.19

$2,628.35

$125.16

68

$2,628.35

$2,759.77

$131.42

69

$2,759.77

$2,897.75

$137.99

70

$2,897.75

$3,042.64

$144.89

71

$3,042.64

$3,194.77

$152.13

72

$3,194.77

$3,354.51

$159.74

73

$3,354.51

$3,522.24

$167.73

74

$3,522.24

$3,698.35

$176.11

75

$3,698.35

$3,883.27

$184.92

76

$3,883.27

$4,077.43

$194.16

77

$4,077.43

$4,281.30

$203.87

78

$4,281.30

$4,495.37

$214.06

79

$4,495.37

$4,720.14

$224.77

80

$4,720.14

$4,956.14

$236.01

81

$4,956.14

$5,203.95

$247.81

82

$5,203.95

$5,464.15

$260.20

83

$5,464.15

$5,737.36

$273.21

84

$5,737.36

$6,024.22

$286.87

85

$6,024.22

$6,325.43

$301.21

86

$6,325.43

$6,641.71

$316.27

87

$6,641.71

$6,973.79

$332.08

88

$6,973.79

$7,322.48

$348.69

89

$7,322.48

$7,688.61

$366.12

90

$7,688.61

$8,073.04

$384.43

91

$8,073.04

$8,476.69

$403.65

92

$8,476.69

$8,900.52

$423.83

93

$8,900.52

$9,345.55

$445.03

94

$9,345.55

$9,812.83

$467.28

95

$9,812.83

$10,303.47

$490.64

96

$10,303.47

$10,818.64

$515.17

97

$10,818.64

$11,359.57

$540.93

98

$11,359.57

$11,927.55

$567.98

99

$11,927.55

$12,523.93

$596.38

100

$12,523.93

$13,150.13

$626.20

101

$13,150.13

$13,807.63

$657.51

102

$13,807.63

$14,498.01

$690.38

103

$14,498.01

$15,222.91

$724.90

104

$15,222.91

$15,984.06

$761.15

105

$15,984.06

$16,783.26

$799.20

106

$16,783.26

$17,622.43

$839.16

107

$17,622.43

$18,503.55

$881.12

108

$18,503.55

$19,428.72

$925.18

109

$19,428.72

$20,400.16

$971.44

110

$20,400.16

$21,420.17

$1,020.01

111

$21,420.17

$22,491.18

$1,071.01

112

$22,491.18

$23,615.74

$1,124.56

113

$23,615.74

$24,796.52

$1,180.79

114

$24,796.52

$26,036.35

$1,239.83

115

$26,036.35

$27,338.17

$1,301.82

116

$27,338.17

$28,705.07

$1,366.91

117

$28,705.07

$30,140.33

$1,435.25

118

$30,140.33

$31,647.35

$1,507.02

119

$31,647.35

$33,229.71

$1,582.37

120

$33,229.71

$34,891.20

$1,661.49

121

$34,891.20

$36,635.76

$1,744.56

122

$36,635.76

$38,467.55

$1,831.79

123

$38,467.55

$40,390.92

$1,923.38

124

$40,390.92

$42,410.47

$2,019.55

125

$42,410.47

$44,530.99

$2,120.52

126

$44,530.99

$46,757.54

$2,226.55

127

$46,757.54

$49,095.42

$2,337.88

128

$49,095.42

$51,550.19

$2,454.77

129

$51,550.19

$54,127.70

$2,577.51

130

$54,127.70

$56,834.09

$2,706.38

131

$56,834.09

$59,675.79

$2,841.70

132

$59,675.79

$62,659.58

$2,983.79

133

$62,659.58

$65,792.56

$3,132.98

134

$65,792.56

$69,082.19

$3,289.63

135

$69,082.19

$72,536.30

$3,454.11

136

$72,536.30

$76,163.11

$3,626.81

137

$76,163.11

$79,971.27

$3,808.15

138

$79,971.27

$83,969.83

$3,998.56

139

$83,969.83

$88,168.32

$4,198.49

140

$88,168.32

$92,576.74

$4,408.42

141

$92,576.74

$97,205.57

$4,628.84

142

$97,205.57

$102,065.85

$4,860.28

143

$102,065.85

$107,169.14

$5,103.29

144

$107,169.14

$112,527.60

$5,358.46

145

$112,527.60

$118,153.98

$5,626.38

146

$118,153.98

$124,061.68

$5,907.70

147

$124,061.68

$130,264.77

$6,203.08

148

$130,264.77

$136,778.00

$6,513.24

149

$136,778.00

$143,616.90

$6,838.90

150

$143,616.90

$150,797.75

$7,180.84

151

$150,797.75

$158,337.64

$7,539.89

152

$158,337.64

$166,254.52

$7,916.88

153

$166,254.52

$174,567.24

$8,312.73

154

$174,567.24

$183,295.61

$8,728.36

155

$183,295.61

$192,460.39

$9,164.78

156

$192,460.39

$202,083.41

$9,623.02

157

$202,083.41

$212,187.58

$10,104.17

158

$212,187.58

$222,796.96

$10,609.38

159

$222,796.96

$233,936.80

$11,139.85

160

$233,936.80

$245,633.64

$11,696.84

161

$245,633.64

$257,915.33

$12,281.68

162

$257,915.33

$270,811.09

$12,895.77

163

$270,811.09

$284,351.65

$13,540.55

164

$284,351.65

$298,569.23

$14,217.58

165

$298,569.23

$313,497.69

$14,928.46

166

$313,497.69

$329,172.57

$15,674.88

167

$329,172.57

$345,631.20

$16,458.63

168

$345,631.20

$362,912.76

$17,281.56

169

$362,912.76

$381,058.40

$18,145.64

170

$381,058.40

$400,111.32

$19,052.92

171

$400,111.32

$420,116.89

$20,005.57

172

$420,116.89

$441,122.73

$21,005.84

173

$441,122.73

$463,178.87

$22,056.14

174

$463,178.87

$486,337.81

$23,158.94

175

$486,337.81

$510,654.70

$24,316.89

176

$510,654.70

$536,187.44

$25,532.73

177

$536,187.44

$562,996.81

$26,809.37

178

$562,996.81

$591,146.65

$28,149.84

179

$591,146.65

$620,703.98

$29,557.33

180

$620,703.98

$651,739.18

$31,035.20

181

$651,739.18

$684,326.14

$32,586.96

182

$684,326.14

$718,542.45

$34,216.31

183

$718,542.45

$754,469.57

$35,927.12

184

$754,469.57

$792,193.05

$37,723.48

185

$792,193.05

$831,802.70

$39,609.65

186

$831,802.70

$873,392.84

$41,590.13

187

$873,392.84

$917,062.48

$43,669.64

188

$917,062.48

$962,915.60

$45,853.12

189

$962,915.60

$1,011,061.39

$48,145.78

190

$1,011,061.39

$1,061,614.45

$50,553.07

191

$1,061,614.45

$1,114,695.18

$53,080.72

Advertisements

Don’t Trade Away Your Life

Image

Don’t trade your life away.

Life – it’s not really all about the money.  (No, seriously, it’s really not.)

As we’re just beginning our “Million Dollar Forex Journey”, this seems like a good time to talk a little about what’s REALLY most important in life – and it’s not making a million dollars.

Having a lot of money is good for a couple of things:  One, it does relieve some stress in your life.  When you get a bill, you can just pay it, without having to stop and look in your checking account to see if you CAN pay it.  That’s nice.  And it’s also a lot of fun to buy stuff for people you care about.  I love buying people ridiculously expensive Christmas presents.  And I remember saying to a friend in college, “Money is for spending on girls – that’s all it’s good for”.  🙂

Despite the fact that having lots of money is fun, it’s true what they say – “Money can’t buy happiness”.  Just think of all the ultra-rich people you know about who committed suicide.  Jesse Livermore, the greatest trader who ever lived and definitely my hero, shot himself just ten years after making $100 million in one day when the stock market crashed in 1929, and in his suicide note wrote, “Things have not gone well for me”.  Not gone well? – The guy had a mansion on Long Island, vacation homes, a yacht, his own private trading office…but in the end, none of it meant anything to him.  Troubles in his personal life (like the love of his life being crazy and shooting their son) overwhelmed him to the point where he didn’t even want to be alive any more.  If you’re considering a career as a trader, that fact should be a very cautionary, sobering thought for you.  And Livermore wasn’t alone – in a terrific passage in his book, “Waking from the American Dream”, Donald McCullogh writes about Livermore and six other men having a luncheon together at the Edgewater Hotel in 1923.  Between them, these men had more money than the entire U.S. Treasury – yet three out of the seven committed suicide (and two others died broke, and the other two went to prison).

If you’re not careful, trading can become an all-consuming thing, eating up almost all of your time and attention, where you’re either trading or studying trading nearly every waking moment of your day.  I went through a period like that myself – where I’d take a trade early in the Asian session, around 6 PM my time, stay up all night watching it, and then keep trading from the London open until halfway through the afternoon in New York.  Please, don’t fall into a trap like that.  What trading SHOULD be is a great PART-TIME job, an awesome home business that you can make an excellent living at by only working, at most, 20-30 hours per week.  If you’re in the U.S., be thankful that the market’s dead by noon on Fridays – you get to start the weekend 5 hours earlier than most people can!  And don’t even look at the Sunday night session – if it’s already Monday morning in Tokyo, hey, that’s their problem.

Even when you’re actively trading, trading doesn’t have to consume you.  Despite occasional dramatic moves, the truth is that the main currency pairs only move up or down, on average, about 10-12 pips an hour.  So you don’t really need to watch that screen every second – that usually only leads to impatience and frustration.  Once a trade has moved enough in my favor that I can move my stop to breakeven or better, I freely engage in other activities besides trading – clearing my email, working out, doing some online shopping, laundry, housecleaning, etc.  Doing that also means that I have less things left on my daily “to do” list when the trading day ends, and therefore more free time to do whatever I like.

So what IS of the utmost importance in life?  Well, there are of course a lot of opinions on that, and that’s a question that, ultimately, you can only answer for yourself – I can’t answer it for you.  But for me, it’s two things:  First, simply doing whatever YOU were meant to do in this life, and secondly but not any less important – people, relationships, family, friends, neighbors, anyone you take the time to care about.  As to the first point, here’s a favorite quote of mine from the theologian, Howard Thurman: “Don’t ask what the world needs; ask what makes you come alive, and go do it. Because what this world needs is more people who have come alive.”  Sounds like a good idea, right?  And as to the second point, there’s nothing more important than the people you love, and the people who hopefully love you.  I lost my dear, sainted wife, the girl of my dreams and love of my life, because I was too wrapped up in what I was doing for myself.  There isn’t a day that goes by that I don’t miss her with every fiber of my being – and there’s no winning trade on the board, and never will be, that will ever take away the pain of not having her by my side.  I’ve got a quote for that, too – from Barry Manilow – “Even now, when I come shining through, I swear I think of you, and God, I wish you knew”.  Do I want us to make a million dollars? – Sure.  But I’d trade every dime of it to have my wife back.  (Of course, I’d prefer to have both.  But I’m greedy that way.)

Jesus posed the question, “What does it profit a man to gain the whole world, but lose his soul?”  So, hey, let’s make a million bucks, all right?  But let’s not lose our souls while we’re doing it.  The money’s just something to help us do the other stuff that’s a lot more important than money.

As usual, I welcome comments (and red wine and girls with dimples), and on this occasion, I’d particularly like to hear about what is most important and meaningful in YOUR life.  Or talk about some things you plan to do with that first million dollars (my favorite joke about “What would you do if you had a million dollars?” is, “I guess I’d pay bills – at least, as far as it would go”).  🙂

See you later this week with an update on the Million Dollar Forex Journey.  Until then, take care and enjoy your life.  Money you can always make more of – your time and the days of your life, you can never get back.  Each day is sacred.  Don’t squander the gift of your time here on Earth.

Jack Maverick

Jack Maverick is a writer and forex trader.  Find him on Google+ at https://plus.google.com/u/0/103534926809963693894/?rel=author  and check out his novel, the psychological thriller “A Cross of Hearts”, on Amazon at http://www.amazon.com/Cross-Hearts-J-B-Maverick-ebook/dp/B006GHJ0ZC/

Weekly Report: Jack’s “Zero to a Million” Forex Trading Journey

Image

…Special dispatch, from the inner sanctum on the 18th floor of the Hecksher Building…

The “Zero to a Million” Account is LIVE – and growing!  

I opened the account with a deposit of $49.92 the end of last week.  I apologize for starting without you, but I really felt the need to test things out a bit first, plus I was switching to a new trading platform and wanted to get familiar with using it.  Current balance (at the moment of this scribbling) = $152.  Not a bad first week. 🙂

Now, having provided you with that information, let me (politely) yell this as loud as I can – I do NOT recommend that anyone ever just blindly follow someone else’s trades (and certainly not mine!).  That’s not the way to become an expert trader – the way to become a master at trading is to make your own trading decisions.  One other thing I would like you to notice is the importance of taking low risk trades – My average winning trade is more than twice the amount of my average losing trade, so in effect I can be wrong on 2 out of 3 trades, yet still turn a profit overall.

My usual trading hours are from about 6 AM till 12 noon (give or take an hour), New York (US Eastern) time.  I sometimes get up for the London open, most often on Mondays and Fridays.  If you see me trading much past lunchtime in New York, it’s an unusual day for me.

More on My 15 Minute Strategy

Here are some more details on my 15 minute chart trading strategy, known affectionately as the “Dance”.

1 – Watch for 3 or more consecutive 15 minute candles in one direction.  This is usually a strong indication of market direction.  So, if you’re considering entering a trade or staying in a trade you’re already in, 3 candles in a row in that direction is a positive indicator.  3 candles in a row against your position should raise a caution flag – If you’re in a profitable trade, but see 3 consecutive candles against you, especially if they close on the opposite side of the 10 EMA, consider either just taking your profit or at least tightening up your stop.  See in the photo below:  At the top of the move, there are back and forth up and down candles, then 3 strong candles in a row down, crossing back below the 50 EMA – the market subsequently tumbles another 30 pips down.

Image

2 – No more than 2-3 losing trades in a row, or 5 or 6 winners in a row, without taking a break.  If you have 2 or 3 losers in a row, STOP – step away from the computer, take a walk, get a snack, something, but stay out of the market for at least half an hour or more.  On the flip side, don’t push your luck past 5 or 6 winners in a row – bank your profits, be grateful for them, and walk away.  The odds are against a winning streak significantly longer than that (and if you’ve hit 5 or 6 winners in a row, you’ve already had a great trading day – don’t be greedy – pigs get slaughtered).

3 – Average profit per trade.  This is a short term, intraday trading strategy.  It’s designed to offer the opportunity to consistently make nice, small profits.  Occasionally this strategy will allow you to catch a big move – and it’s great when that happens – it just doesn’t happen that often.  I’d say maybe once a week there’s an opportunity to make 50 pips or more on a trade.  But most trades made using this strategy are only going to catch about 10-30 pips – that’s fine, that’s all this strategy needs in order to be profitable overall.  Therefore, once you have a 10-15 pip profit in a trade, seriously consider just taking the profit without waiting for further action.  A common mistake that people make when utilizing this strategy is trying to hang on for a big, big profit…only to see their nice small profit roll back toward becoming a loss.

There are more nuances and things to consider in regard to the Dance strategy, and I’ll continue to write about them here every week – we just can’t cover everything at one time.

Let’s take just a minute to look at some basic trading principles, things that apply to any trading strategy you use.

Trading Principle:  Focus on the market, not the money. You think about the money before you put a trade on (“What’s my potential profit or loss?  What’s the risk/reward ratio?”), but once it’s on, focus back on the market.  Base your trading decisions on what you see the market doing, not on the moment to moment fluctuation in your equity.  Re-evaluate your position often, at least hourly – Ask yourself, “If I’d just started looking at the market right NOW, what would be my thinking about its direction?  Would I be a buyer or a seller, or standing aside?”

Trading Principle:  Patience is a virtue.  Someone asked me, “How long do you watch the market before taking a trade with this strategy?”  I was tempted to jokingly answer, “Unfortunately, usually not long enough”.  Here’s the thing – as soon as we turn on our computers, our natural impulse is to want to be in the market right away.  Recognize that fact, and recognize that you have to guard against the temptation to jump in just because you want to be in, not because there’s actually a good opportunity on the board.  The good news is that with this particular trading strategy there are usually plenty of good trading opportunities – probably at least one every hour or two from the London open to midday in New York.  Be patient, wait for a genuinely good opportunity.

Trading Principle: Persistence will overcome everything.  If you believe you can do this, you can. If you don’t believe it, you can’t.  This applies to everything in life, and it surely applies to trading.  Don’t listen to negative people who tell you that you can’t make a living as a trader – they don’t have a million bucks, do they?

Random notes:  I honestly don’t know if someone can start out this small using only 50:1 leverage.  I’m trading this account using a broker outside the U.S. – Traders Way, using 500:1 leverage, and, starting with $50, I chose an average lot size per trade of .05 (that’s 5 micro lots)…Pairs to trade: I mostly stay with the major pairs, Eur/Usd, Gbp/Usd, and Aud/Usd, but also trade Eur/Aud, Aud/Jpy, and a few others – just stay away from exotic pairs where there’s too high a spread (more than 2 pips).

Please offer comments and questions, and please share this article with anyone else you think may be interested.

My prayer every morning is that this “Million Dollar Forex Journey” be a blessing for us all – wishing you all good things in your life, always.

P.S.  The ONLY strategy that I’ve never seen a losing trade with—>http://www.tradingfo.com/TradingOffers/TradingfoTradingStrategies

Jack

Jack Maverick is a writer and forex trader.  Find him on Twitter (@bogartmaverick), Google+ at https://plus.google.com/u/0/103534926809963693894/?rel=author  and check out his novel, the psychological thriller “A Cross of Hearts”, on Amazon at http://www.amazon.com/Cross-Hearts-J-B-Maverick-ebook/dp/B006GHJ0ZC/