Trading foreign exchange (forex) is perceived as difficult, time consuming and quite risky to do. 90% of those that start trading loose all their money within the first 100 trades. Of the few that survive, some manage to make nice profits on their investment in the range of 10-20% per month, while risking not more than 1-2% of their trading capital per trade and not more than 10% overall. Others barely survive or even loose everything and wipe out their trading accounts.
I will be keeping track of all my next 100 trades over the next 4 months until the the 1st of January 2015 and write regular blogposts on the trading I do. Besides, I will write up some of my thoughts on the subject of trading forex in the hope to inspire others to aspire the same results and not to take a bare 6-10% return per year for granted on money they have invested in stocks, bonds or maybe even have sitting around in a savings-account.
Smith wrote his book „How to Make a Living Trading Foreign Echange: A Guaranteed Income for Life.” In this book he embraces the pareto-principle where 80% of results come from only 20% of your effort. He noticed the same with his trading efforts and advises his readers to only trade for 15 minutes a day. More time is not needed to get a good and consistent return. Even though I am spending more time than that per day, the book inspired me.
Marcus de Maria from http://www.investment-mastery.com recently published “The Lunchtime Trader.” In this book he explains how you can trade successfully during lunchtime. Instead of taking a few percent returns on investment per year for granted, Marcus explains how with some simple steps you could increase this figure easily to about 30-35% per year. I remember sitting in one of his Forex workshops in Elstree in November 2012 meeting one of his traders making over 200% a year trading Forex about 3-5 hours per day. That inspired me! However, I did not like the time needed to make this work out.
My blogposts will include information on how I configured my trading system and what I think and do setting up each trade. I will write about the trading books I read and the trading system I use and money management rules I apply.