Withdrew All Cash From My Forex Account
Blogged By: Low Hang Wei @ October 15th, 2008 - 12:36 pmAfter an exciting period of trading the forex markets, I have decided to withdraw all my cash, which isn’t much, from my Forex account. During this time, I have learnt a lot about trading and the lessons learnt seem to bring over to other aspects of life. For example, trading teaches the importance of discipline, which is really important. By being disciplined, we would naturally work hard towards our goal, following a plan that we have drawn up and that makes attaining success that much more probable.
Anyway, in this short period of trading, my Forex account had gone up and down, up by as much as 500% and down by as much as 60% drawdown. The experience is truly like a roller-coaster ride, especially with the volatility of recent markets. Throughout this trading experience, I did not have any solid system unlike what many people have. I did not go through numerous statistical backtesting or relied on a complicated system. Well, I did used quite a complicated system before, but not in the last month of my trading experience.
What I did in the last month is pretty much based on simple set of indicators and to be totally honest, I can’t really tell if I was lucky or it worked somehow to bring my account to 5 times its value. This winning streak was stopped when I placed a large order and went to sleep yesterday night without setting any stop-loss, a sure sign of potential danger. This morning, I woke up and I got automatically sold-off (like a margin call) at a disastrous price and I noticed my own behavior immediately. Because of the large loss (not in absolute terms, but in percentage), I felt incredibly upset and was so eager to quickly make back the pips that I engaged in more dangerous behavior. Since I entered stop-losses for all of these trades, the losses were not big and I am basically still in the profit after making all these screwed up mistakes.
At this point of time, I felt that trading with your own money is really a tough job and it is really difficult to take away the emotional side. One mistake begets another, because of psychological changes when I lose, according to my previous trading experience. I turned to a major rule of trading, to be disciplined and stick to your plan. Since having such a large drawdown is definitely not part of my plan according to my rules for stop loss, I decided that the most disciplined thing to do is to exit trading for now.
I have satisfied my personal reasons for engaging in Forex trading during this time and that is to prepare myself if I do get to be a trader. I believed that the psychological strength that I built up during this time will be very useful if I do get selected to be a trader. I attribute any profits during this period of time to luck, since I do not think that I am using a system with positive expectancy. It’s just that the wide fluctuations in current conditions led to my advantage, until today.
I have spent a lot of time daytrading in the past month, probably exceeding a few hundred hours and I think that is enough for now. I certainly hope that I will get to use this experience by becoming one of those extremely lucky guys who gets to be a trader with a bank. If I don’t get this honor, I will stop trading in the near future since I have already withdrew all cash from my forex account.
Maybe some day, I will engage in trading again, but my main priority now is to start making money once I graduate. I think that I have to stick to a more secure plan to make money. Among all my friends, there is only one that consistently reminds me of my goal and I honestly think that he is a good friend. While I admit that getting asked about my goals when I am not even 1% close to it is certainly embarassing, I do need the occasional knocks on my head to tell me that time is flowing.
I have deviated from my path for dozens of time, when my initial goal was to make it rich with internet marketing, as seen from the header on my blog. I hope that my newfound discipline from trading will guide me in this other path as well and that I will focus only on internet marketing from now on. It seems like the only possibility for me to make a million dollars in this short period of time.
Blogged Under: Personal Finance
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October 15th, 2008 at 8:40 pm
I am sure you have made the right move by exiting the market since it is pretty “cloudy” in the market these days. If you are uncertain, better keep more cash in hand.
October 24th, 2008 at 8:33 pm
Sounds like you gambled and won then lost. There were however unusually large moves and trends like the rising US$ one just need to catch those and make tons of money.
But these are unusual times. Anything that works now probably won’t work during the “usual” times.
Like the stock market that dropped like a rock without so much as a pause. Very unusual and anything that works now like shorting the stock index ONLY works during this period is an exception.
November 24th, 2008 at 4:08 pm
Yo Millionaire to be
Don’t be 2 demoralised by your trading losses. or did u not make any losses overall???
Totally understand your emotions as I went through your roller-coaster ride b4.
Most importantly, stay focused to your goals and strive to achieve more knowledge to reach your million dollar goals …
Don’t give up on FOREX that easily. Its really not that hard.
Good luck!
February 24th, 2009 at 8:37 pm
Never give up, never surrender
LOL! Forex trading would not be the same without losses!!!
June 5th, 2009 at 1:37 am
Forex is certainly a challenging undertaking. It can be profitable, but most people lose because they don’t have the discipline to stick with it - if you have patience - you can be profitable in the end!!