Im back.

Ok, well I am up to $1004 now. Earlier today, I broker a cardinal rule and tried some scalping.
BAD move. I lost $300. Ick. No more scalping for me.

New Balance $300

Well kids, this makes for a 300% return. Yikes, that was alot of work.
I learned a few things.

1. My broker, FXCM has terrible slippage
2. Find a broker who doesn't manipulate prices

So that being said, I gave a buddy of mine a call and asked him who he uses.
He uses IBFX. The guys that do my charts also use IBFX.

So.... Im closing my account, and transferring funds into a IBFX account.

This means no trading for a week or so.

Its a learning process, and Id rather get this out of the way now with a lower balance than later with hundreds of thousands =)

New balance is $155

Ok so I started with $100, I am at $155, Thats a 55% return.
I didnt trade this week due to a lack of good setups.
This happened because of the Japanese central bank's intervention into the market.
It turned everything upside down. I have several good setups coming up.

FOREX Scalping - Making Regular Profits to Build Long Term Wealth. And Why Scalping Could Cost You.

It’s a traders dream, getting in and out of the market each day and earning a few hundred dollars here and there which over time to make huge long term profits.

It’s the aim of an increasing number of traders, but you need to be aware of one important fact.

Day trading does not work and intra day trading in forex markets means the only person who gets scalped is the person trying it – normally of their entire trading account quickly.

So why doesn’t forex day trading and scalping work?

The answer is obvious if you think about it, so here it is:

Each day trillions of dollars are traded by millions of traders who fall into four main groups:

1. Hedgers – Who are not looking to profit from currency fluctuations but simply looking to hedge their portfolios.

2. Central Banks – big players, who intervene occasionally to stabilize currency, markets should they believe it necessary.

3. Large traders – Well capitalized individuals and professional money managers.

4. Small speculators – Everyone else.

They all think differently and they all have different objectives and different methods and to say you predict what these vast diverse groups or traders will do in under a day or less is laughable.

But people buy into the myth and they lose all the time.

So why do people attempt it?

Well many are attracted by marketing copy that promise riches with low risk, but of course the people who tell them this and sell them the secrets, don’t trade themselves they make their money selling courses.

Other traders think it is a low risk way to trade but if you cannot predict where short term volatility will take prices you will lose – you can’t get the odds in your favour and may as well flip a coin.

So forex scalping does not work and by its nature will never work as volatility can and does take prices anywhere in a day.

Ever seen anyone who sells a course or claims to have made money forex scalping with the proof?

By this I mean a real time track record ( not a meaningless hypothetical track record done in hindsight) no neither have I.

Forex scalping is not a guaranteed way to win, it’s a guaranteed way to lose in forex trading and lose quickly.

Forget the hype of forex scalping and see the reality for what it is, a great way to lose.

If you want to trade currency markets get the odds in your favour by trading in periods where the data can actually help you put the odds in your favour

Todays Trade

GBP/JPY was in a oversold condition today. Moved out of oversold and is on its way up.
I am up 60 pips and counting. This is going to be one nice easy trade.

I've decided to refine my trading strategy a bit a stop scalping. I believe scalping will not work in the long term and may actually cost me my entire account. I refuse to do it anymore. Its too risky.
Read my post on scalping.

taking a break

Well with the financial markets melting down, Forex is way to volatile to be predicable, and my pip spreads are horrendous. So I am gonna wait a bit to see how things pan out before I take rash trades.

Nice

Its been a good morning. Before work I did a little scalping on the 1 minute charts.
Todays P7L $28.83

Off to work.....

On another note, I dont expect $125% returns to happen forever. So Im not going to bother to update the "weeks to goal" since it wouldn't be realistic.

Holy Compunding Batman

Ok, so I'm a numbers kind of guy. I had put together a spreadsheet a month or so ago detailing how compounding would play out at varying interest rates, etc.

The simple formula to figure compounding is to take a number and multiply it by 1 and the percentage rate expressed as a decimal. For example, if you wanted to calculate a return compounding monthly, with x being the principal:

return=x*1.percentage_rate

Anyway, using that formula a 20% percentage rate would be expressed as 1.2, 30% would be 1.3, 41% would be 1.41, etc.

That being said, I put only $100 in this account to test my trading strategy before i commit all my capital to this. Based on the current rate of return, I will see a million dollars in 19 weeks?!
72 Months will see us at more money than I could possibly ever spend. And that is with the $100 initial investment. If I put in all the other money that I have set aside as an investment fund, we will do incredibly well.

Today's Trading Results

Well today was interesting. I noticed a strong downward trend on EUR/USD. And I do mean strong. It started around 9 am 11/11/08 and continued throughout the day. I got home this afternoon and took a look at my charts. I saw that a retraction was starting to happen. However, my charts still showed downward movement on the FC1 indicator. I saw rejection of the low and a spike up afterwards. Once it hit the top and started proceeding on a downward price movement, I switched my charts back to an minute time frame and saw that the indicators showed an overbought position and were headed straight down.

So I bought in dumped it ten minutes later for a decent profit. Im not looking to make massive pips yet, just enough to reach my goals

Selling GBP/JPY
Made $2.16

Target for this week

I am targeting a 20% return on my account each week.
For this first week, I need to make $20.00 to hit target.

I know it doesn't seem like much, but 20% return is huge.

For those who are good at math, 20% compounding weekly for 72 weeks is over 7 million dollars.

I only want a million =)

Let the fun begin.

Trading Setup

Im looking at my charts and indicators, and I do not see any trades that I like right now.
I DO NOT SCALP.

I only take trades that are in the extremes of overbought and oversold conditions

Right now USD/CHF looks good but, I want to see it turn before I commit.

I will only be making a $1 trade when it looks good.

As I go along I will be posting the "commandments" of my trading system.

I just realized that I really need to get a microphone for this PC so I can effectively communicate with you all. I will be making video analysis posts.

Lets Get Started

Well, its a long story about how I got here. I started looking at currency trading about a year ago. I don't remember exactly what drew me to it, or how I came to even know about it. But, I do remember searching Google and finding FXCM. I signed up for a demo account and drained it.
I drained another, and another. In fact, in all I drained 20 demo accounts, 1 standard lot account, and 2 mini accounts. In the end, I ended up losing about $4000.

This is alot of money, but I had heard about people losing over $100k in a few months.

I realized in a hurry that I had NO idea what I was doing.

Well, to make a long story short, my wife sent me off to a Forex class where I met a gentleman by the name of Paul.

Paul is a millionaire. He makes well over 7 figures a year.

Paul taught me how to trade effectively. It took a while, but I finally got the point he was trying to hammer into my head.

Sell when the market is overbought
Buy when the market is oversold.
Trade on longer timeframes


I will get more into how to do determine overbought and oversold conditions later.

So why $17.81?

Well, no special reason. It just happened to be what I had in a mini account I had set aside for "experimenting". I decided to use that account for this project.

I will show you how I will make a million dollars in 72 weeks. I know, you say "ya right". Well, I have a habit of doing things that people say are impossible. But hey that's cool, everyone is entitled to their opinion.

Let's get started.