I'd check what you'd be paying if you traded the /6E

Well.... I just completely ****ed myself. I was long USD/CAD this morning and then the news broke that the BOC is raising its rates from 0.75% to 1%. I had been long at 1.2410 with a stop loss of 1.2395 but that got completely blown through when the pair plummeted. I didn't get stopped until 1.2201. My SL got slipped 200 pips for nearly 50% of my account.

LOL forex

At the end of the day, it's my fault. I should've known this announcement was coming and stayed away from anything CAD related.

goddamn

If you don't check forexfactory or a similar site before every trade you will now.

Yeah. I usually do. This is one of the few times I didn't and it bit me in the ass. No one to blame but myself.

Surprisingly, I'm not as distraught as I thought I'd be. I suppose this is the kind of lesson one needs to learn.

After looking at things a little more closely, I think I have at least a little bit of a case that I should get a partial refund. I should've been slipped 100 pips, not 200.

Emailed my broker. I fully expect them to say that they're not responsible, but there's no harm in trying.

Wouldn't b surprised if your broker is fading your trades.

If I were trading with a market maker, absolutely. But I trade with an ECN -- which is why I have to pay commissions in the first place (your typical forex broker has zero commissions and they mark up the spread to make up for not having them).

A market maker will fade your trades because anyone who wins is a liability for them given that FX is a zero-sum game and a MM is the other side. However, a true ECN only links you to the liquidity provider where the spread is not marked-up and they charge a commission for doing so. There's no conflict of interest, and it's actually in their best interest for you to do well, as more trades means more commissions for them.

Pretty standard IMO. I don't have any experience in forex but in equities, liquidity disappears going into planned data releases. Like before big fed announcements the size in the book in SPY will reduce by like 90% or so.

A very avoidable mistake. Don't blindly hold positions through data/earnings/FDA etc. But avoidable mistakes are what take most people out of the game

Proof of market maker brokers fading your trade? My understanding is they have liquidity providers at 1.00005/1.00010, but quote the customer 1.00000/1.00015. If you buy or sell, they make half a pip regardless on this, net their transaction cost.

I was complacent in the due process department. That is for sure. I think it's one of the pitfalls of having success out of the gate. You relax and think that you can go on auto-pilot a bit. This was a lesson that you still have to be abreast of every little thing that is going on.

Honestly, I need to just focus on EUR/USD and maybe GBP/USD. Right now I'm trading 6 different currencies in the 5 pairs I trade. Cutting that number in half would probably help.

I imagine there's probably some small mark-up on spread with ECNs, though certainly less than a MM. But you may be on to something. It may be that they are "ECN when they want to be and MM when they don't"... it's hard to know really.

Lack of an edge + fees and spread are what take most people out the game imo. Not as sexy, but more true.

What I described wasn't an ECN, the broker is still a market maker. He's just hedging off his risk, like any market maker tries to do.

The point of my post was that I don't think I agree with the notion that MM brokers literally position against you, but we won't know until we talk to someone who actually works for one.

Man.... Nothing like pulling the trigger on a stupid overnight "revenge trade" and actually getting there to the tune of 82% of yesterday's loss.

Agreed. We can't analyze trades the same way we do with poker hands. For most traders, trades are not discrete independent events that are similar enough to lump together and crank out various statistical measures.

Consider two traders. One takes a position and holds it for one month, during which time the market trends in his favor. The second takes the same position, but exits and immediately re-enters the position 100 times over the course of that month. Can we really say the second trader has a much larger sample size and therefore a much better idea of his trading ability?

At the end of Month 4, I am back to $817 for a total monthly gain of just 6%. However, given that just a couple weeks ago I lost nearly 50% of my account on one stupid mistake, I'd say 6% for the month is pretty damn good.

Not much else to say. Here are screenshots.







And as always - a link to my Trade Explorer on FF.

Looking forward to the next update

Hahaha I bet you are. I'm sure you clinked on the link above and saw the calamity that recently transpired.

As you can see from the graph, after the USD/CAD fiasco I foolishly started trading higher lot sizes. Went back and forth for a while, but then eventually shat the bed. By the time I realized that what I was doing was nothing short of reckless, I was already under $300. At that point I just totally stopped giving a damn.

I was just never really the same mentally after that one 50% screw-up.

This really surprised me since I've never done this kind of thing in poker (playing above my roll to get even). Looking back, it's been a pretty eye-opening lesson in terms of how I perceived my trading behavior versus how it actually was.

It wasn't tilt that killed you, just like it wasn't good trading it that took you from $100 to $1000.

This is why you failed and it was always 100% certainty:



You were drawing stone dead in the long run the moment you started. It is impossible to beat that rake even as the most skilled forex trader on the planet. That sounds like negative bull**** when you're running like God, but in the long run it's what matters. No one who trades forex with these fees can possibly beat it - you are -EV on every trade and there's nothing you can do to change it. Only outrun it for a while with luck.

I'm really glad this happened sooner rather than later. You seem like a great guy and the sooner you get out of this -EV time waster, the better.

What I find fascinating is how we build up these sexy narratives full of agency and emotion. You didn't trade well on the way up and you didn't trade badly on the way down. In reality you luckboxed to $1000 and you unluckboxed to $0. Lot sizing, perceived trading skill, were all irrelevant. You were playing roulette with a 10% house rake and the rake raped you in the end when the luckbox got fair. You'd still be up $630 without rake. That's 500% or so.

You're not wrong, but that issue isn't exactly exclusive to forex. Trading costs are unavoidable in any market, no? The real problem is day trading. Pinkmann brought this up at the point in this thread where I talked about changing timeframes and that I'd be taking on an exponential amount of fees. He was right (and I knew he was at the time), but what can I say -- I'm stubborn.

I've been backtesting an approach that trades much less frequently (about twice a week at most), will incur less transaction costs as a percentage of average trade, and is more well-defined in terms of entry and exit rules. It doesn't rely on indicators either.

Maybe I take a run at that with my remaining $45

At least with day trading you avoid rollover which can be deadly depending on the pair. Nonetheless, you need to be increasingly stingy on which pairs you take day trades as your time frame decreases.

For example on FXCM you get a discounted commission on a few USD pairs (GBP,CHF,JPY,EUR) and further decreases as you have an increased account size. Its almost worth it to deposit far more than you are willing to trade just to get the fee decreases and simply trade your unit sizes as if that extra money wasn't there. I'm not familiar with other brokers so I have nothing to compare it to.

You are on the right track OP. The reason I doubted you at the start is that you obviously had very little backtesting done and were randomly trading news events. Both are giant red flags, but pretty much everyone goes through this small account gamble stage.

I'm not surprised FXCM is offering discounted commissions. They've been fined so many times for deceptive practices like asymmetric slippage and claiming to be a NDD (No Dealing Desk) while in fact being just the opposite and fleecing their clients along the way.

As a matter of fact, I think they were banned earlier this year from accepting US clients by the CFTC.

Yeah no American residents allowed, but I didn't look into it much. I just assumed it was frank/dodd nonsense.

so we basically est. that its not beatable due to rake.
Sounds like pitgames... there are always people trying to bink that one heater run

Yeah it's a fact that it's not beatable. OP paid 4x his starting bankroll in rake per 200 hands. Maybe 1x if you include the increases in bankroll size as he went.

Hilariously, it's not instantly obvious to the clowns geniuses in this thread that this is drawing stone dead. And that's without the bonus hilarity of not realizing that forex is not beatable for much even without the rake. You may as well try to make money banging your head against a wall - it's more educational, less boring and more profitable than what OP did.

I'm kind of wondering why you failed to address my point earlier that the issue with seemingly unbeatable fees is as much a product of my trading style and less so a product of forex as a whole.

Another thing I've learned in this experiment is that going for smaller moves is what really exacerbates the commission issue. Consider the following:

$7 per round turn on 1 lot (what i currently pay)
0.1 lots traded, gain of +10 pips ($10), fee is $0.70 or 7%
vs.
0.1 lots traded, gain of +100 pips ($100), fee is still $0.70 now 0.7%

I think if you're going to have any chance in Forex, it has to be in swing trading where you're taking maybe 8-10 trades a month. I was doing 10 times that amount in a month. Makes a pretty big difference, wouldn't you say?