The Black Swan Experiment
Bumping this thread, as I am undergoing another Forex experiment of sorts. What I learned in the initial phase of this thread is that it is damn hard to trade Forex successfully over the long term. I think the reason why there are scarcely any professional FX traders out there is because those that are good enough to succeed in FX can do so in other markets where they have more of an edge and don't have to deal with the unpredictability/volatility of currencies.
Having said that, I don't think it is a complete fluke that I returned 1,000% and now 100% on separate occasions (more on that below). I think that my downfall last time around was in thinking that trading standard TA based approaches are viable
over the long-run for a retailer in FX.
But I do believe the approach I've currently developed can be viable in the short-run.
Even if it's only for beer money on the side
I started a couple weeks back with an insignificant amount I don't mind losing ($200) and have been scalping with an ultra-high risk/ultra-high leverage approach. I am trading with 500:1 leverage - any less and this won't be possible - where each 1 pip move represents 2% of my account balance. I have been targeting between 2-3 pips, which after commissions nets about 3.5% per trade. Somewhere between 18-20 trades doubles your account. One losing trade of 40-50 pips (depending on margin requirements) will wipe out the account.
I will state the obvious now... Trading this approach indefinitely WILL at some point result in a loss of the entire balance (hence the title above).
I am at the first milestone of 20 winning trades, and having doubled the account I am somewhat at odds of how to proceed....
1) Withdraw my initial starting amount of $200. The positive here is the peace of mind that you are henceforth trading with house money. The negative is that you will be starting the cycle completely over.
2) Withdraw a fixed percentage, somewhere in the range of 20-50%, and then go for another cycle. Example: $200 -> $400 then withdraw $80, $320 -> $640 then withdraw $128, $512 -> $1,024 then withdraw $205, $819 -> $1,638 then withdraw $328, $1,311 -> $2,621 then withdraw $524 (at this point that would be 100 trades in a row which is extremely unlikely)
3) YOLO it up and try for another cycle ($400 -> $800)
Here is my Forex Factory trade explorer (3rd party tracker) filtered for 2 weeks ago when I began this recent experiment...
https://www.forexfactory.com/nico135...xplorer.111402