Sunday, 13 August 2017

My Forex Trading Experiment - Week 2 Aug 2017

Week 2 Aug 2017

My Pepperstone demo account expired and I couldn't login anymore. The demo account is valid for only a month. I can recreate another account with Pepperstone but I would have to do it again the next month.

Fortunately, I have created a second demo account with another broker called Orbex before my Pepperstone account expired. I have a third account with another broker IC Markets where I traded the same strategy but on lower timeframes with tighter stoploss and target price.

Last week, my P/L for this account was $133.42. I closed 2 positive trades early before NFP results. My overall P/L is now $434.62. Profitable trades is 75%. Portfolio growth : 434.62/5000 x 100 = 8.69%. If based on the amount risked, Gain:434.62/600 = 72.44%

I have added an additional Acc Growth column for my Risk Reward Table. In my earlier Post, I discussed about Risk Management and used the Table to illustrate my point. Link here.

I am still within the yellow band of the table. Would be interesting to see which band I would end up in after 10 trades. Only 4 trades completed so far and 2 were closed prematurely.

For my IC Markets demo account, I am risking $50 per trade for the potential to make $100. Trade is mostly based on lower timeframe (15 min/1 hr) charts. Starting account size is also $5000. Risk is about 1% per trade. If the first few trades are losing trades, the subsequent trade risk would increase >1% as the remaining capital would be less than $5000. Each trade takes about 1 - 2 days to close so far.

My P/L for this account is $252.22. Profitable trades is 75%. Portfolio growth: 252.22/5000 x 100 = 5.04%. If based on the total amount that I risked, Gain: 252.22/200=126.11%

Unfortunately, both accounts do not factor in brokers' commissions. It is also too early to tell if the result is sustainable. More trade sample size has to be done for the "experiment" to be meaningful. My trade experiment has to survive the law of large numbers over a period of time. As of now I don't think 75% winning rate is achievable over a longer term.

Law of Large Numbers/Averages Explained 

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