I have entered the world of trading since last year during the hard COVID lockdown here in Melbourne Australia in 2020. It was a perfect opportunity to test the water with trading.
Something I was always intrigued to do.
I had a lot of fun during my first week. I grew my account from $10k to 30k without knowing what I was doing. Made thousands in a night with a maximum drawdown over 70% at some point.
It was a roller coaster. Somehow instinctively I was scalping the markets on breakouts. Mind you I didn’t even know what ‘scalping’ and ‘breakout’ were back then.
I was merely trading on gut feelings, picking up momentum as I could sense from seeing the candles expanding rapidly on breakouts and jumping onto it as if I were riding a wave with huge position sizes talking about 1 to 5 CDF XAU contracts at a time on a $10k account. It was totally insane if I look back on what I was doing.
The quick money I made was the worst thing that had happened. The end result of course was a tragedy. I blew my account in the second week plus lost nearly $50k within 2 months.
That really hurt as it was a substantial amount of our family savings with all the unknown with my business during COVID.
However that experience didn’t discourage me from trading, and since then I started researching on different technical analysis techniques, reading all the Market Wizards, Turtle Traders (and now Trend Following) and taking in as much tips from past successful traders on how to trade and exercise risk management.
Then I came up with a trading methodology using Moving Averages and Stochastic to identify start and end trends. Simulating trades for nearly 6 months on demo accounts before recently started trading on a small account.
The answer to your question is, despite having back tested these methodologies and proving them highly profitable on paper (or excel sheet). But when putting the systems into practice, I couldn’t make any profit out of it, despite the system still gives me a good edge of picking up a trend (if I trace back every signal retrospectively). I just couldn’t get my head around why I am not able to profit. Something must be wrong with my execution. I am dying for an answer, as I can see the money there and they can be quite predictable.
Michael, if you do read this email, I would be very keen to have a chat to get some guidance if you do have time.
I am even seriously considering a career in trading as I just love it so much, and potentially giving my consulting business which is generating reasonably good income.
I am quite determined to be a successful trader.
Hope to hear from you.
I don’t know if you are trading as a trend following trader. These resources will answer that question.