Turning $15K credit card debt into financial freedom
- Thread starter Redsails
- Start date
I woke up at 4:00am and found out that I was stopped out. You were right! But at the moment when I made the trade it was not at all clear the uptrend in EUR reached the peak and was going down. The wise man John Murphy said in the book I am reading now that a trend in motion is more likely to continue than to reverse. That is why I bought EUR then.
As for leverage, I usually trade with 30:1 margin. But I believe that IB increased their margin requirements because of Brexit risks, so 150K is all I could do now.
I will do it a bit later. I actually started trading at the end of April, but I did not trade every day. After a week of trading in the beginning of May, I stopped and resumed trading in the last week of May. Three weeks is the total cumulative time I traded.
When I had $15K I usually traded EUR 400K. I usually trade with 30:1 margin. And I believe that I incurred the bulk of the commission costs in just a few days (when I lost something like $7K) though I did not check yet.
I was excited because it was the first time I did overnight trade.
I usually trade with 30:1 margin. Also, the wise man John Murphy said in his book that one should increase his commitments at equity troughs. Unfortunately due to my reduced account size I cannot trade EUR 400K any longer like I used to when I incurred my losses. So for some time I thought about depositing additionally $15K in order to be able to trade EUR 500-600K to recover my losses but decided against it - too risky! I made a firm decision that I am going to trade only with borrowed money.
Day trading FX with 30:1 leverage using credit card debt with wife and kid to support and no job.
You are on the wrong website, go here instead:
http://www.gamblersanonymous.org/ga/
You are on the wrong website, go here instead:
http://www.gamblersanonymous.org/ga/
My first days..
So, in a previous post I explained how I decided to try day trading. Why did I choose Forex? I chose Forex because of its high leverage primarily. The only way to grow capital quickly is to use leverage, so that's why Forex. But also Forex was conceptually clear to me. It's a macroeconomic variable, and I have an advanced training in macro-economics, I understand in theory what determines currency exchange rates in the long and short-term. On the other hand, the price of stocks depends on a host of macro and company specific factors, and day trading stocks that I have no idea about seemed to be a stupid idea to me. I believe trading stocks is much more complicated conceptually and practically than trading forex for a beginner. Having said that I do plan to trade stocks when I have more capital (at least $300K). And in the future once I accumulate a few millions, I plan to transition to investing, as it is a more socially respectable activity.
I researched online brokers for a while and found out about TradeKing. I opened a demo account with them and started demo trading. I had notional equity of $50K which I leveraged to $2M. On the second day of trading I won $5K! I was pretty excited! I had never before in my life won $5K in one day! Also that day I got a call from a TradeKing sales guy. He explained to me that demo-trading is a waste of time since it never feels like the real trading. He said I should open a small live account since only with a live trading I can learn how to trade. I was skeptical at first and thought that he was just trying to get money out of me (he was a sales guy after all) but then I researched some online forums like Trade2Win and EliteTrader and found that his statements were confirmed by opinions of many wise traders.
Therefore, I deposited $2K and started trading on April 29. The first day I won $455! EUR kept going up and up, and I kept buying low-selling high. It was so unbelievable! To make 20% return in one day! I felt like a trade king. I shall forever remember that day.
So, in a previous post I explained how I decided to try day trading. Why did I choose Forex? I chose Forex because of its high leverage primarily. The only way to grow capital quickly is to use leverage, so that's why Forex. But also Forex was conceptually clear to me. It's a macroeconomic variable, and I have an advanced training in macro-economics, I understand in theory what determines currency exchange rates in the long and short-term. On the other hand, the price of stocks depends on a host of macro and company specific factors, and day trading stocks that I have no idea about seemed to be a stupid idea to me. I believe trading stocks is much more complicated conceptually and practically than trading forex for a beginner. Having said that I do plan to trade stocks when I have more capital (at least $300K). And in the future once I accumulate a few millions, I plan to transition to investing, as it is a more socially respectable activity.
I researched online brokers for a while and found out about TradeKing. I opened a demo account with them and started demo trading. I had notional equity of $50K which I leveraged to $2M. On the second day of trading I won $5K! I was pretty excited! I had never before in my life won $5K in one day! Also that day I got a call from a TradeKing sales guy. He explained to me that demo-trading is a waste of time since it never feels like the real trading. He said I should open a small live account since only with a live trading I can learn how to trade. I was skeptical at first and thought that he was just trying to get money out of me (he was a sales guy after all) but then I researched some online forums like Trade2Win and EliteTrader and found that his statements were confirmed by opinions of many wise traders.
Therefore, I deposited $2K and started trading on April 29. The first day I won $455! EUR kept going up and up, and I kept buying low-selling high. It was so unbelievable! To make 20% return in one day! I felt like a trade king. I shall forever remember that day.
Troll or not Troll, I whish I could bet against this guy. Any takers?
Or at least post your entries and stops in realtime so I can take the other side, Redsails pretty please
Baron, you should set up a bookmaking - venture and make a market for bets on journals. I would be your best customer
Or at least post your entries and stops in realtime so I can take the other side, Redsails pretty please
Baron, you should set up a bookmaking - venture and make a market for bets on journals. I would be your best customer
A few words about my methodology in those first days..
As I said, I had always thought that trading (not only retail but in general) is a stupid activity. I learned Efficient Market Hypothesis in school. I knew that it was not possible to systematically beat the market. It is also not possible to be systematically lucky. But what I did not realize before and what I understood only recently is that you don't have to be systematically lucky to get rich. You just need to get lucky a few times.
It's like venture investing. You make bets, most of which fail but one of them will bring billions. Then with a bigger capital you make even more bets and the cycle repeats. The odds are probably worse in trading than venture investing but the principle is the same.
I firmly believe that is the explanation for successes of any trader or investor such Buffet or Soros.
So, I did not believe in technical analysis. And I did not believe in fundamental analysis. I believed only in luck. Therefore, I decided not to learn anything and just keep my trading rules as simple as possible.
Basically I had only two rules:
1. Trade in the direction of intra-week trend.
2. Buy troughs, sell peaks.
It happens that these were not bad rules at all! I was surprised to find out recently that these were exactly the rules recommended by the wise man John Murphy in his book "Technical Analysis of Financial Markets".
As I said, I had always thought that trading (not only retail but in general) is a stupid activity. I learned Efficient Market Hypothesis in school. I knew that it was not possible to systematically beat the market. It is also not possible to be systematically lucky. But what I did not realize before and what I understood only recently is that you don't have to be systematically lucky to get rich. You just need to get lucky a few times.
It's like venture investing. You make bets, most of which fail but one of them will bring billions. Then with a bigger capital you make even more bets and the cycle repeats. The odds are probably worse in trading than venture investing but the principle is the same.
I firmly believe that is the explanation for successes of any trader or investor such Buffet or Soros.
So, I did not believe in technical analysis. And I did not believe in fundamental analysis. I believed only in luck. Therefore, I decided not to learn anything and just keep my trading rules as simple as possible.
Basically I had only two rules:
1. Trade in the direction of intra-week trend.
2. Buy troughs, sell peaks.
It happens that these were not bad rules at all! I was surprised to find out recently that these were exactly the rules recommended by the wise man John Murphy in his book "Technical Analysis of Financial Markets".
Troll or not Troll, I whish I could bet against this guy. Any takers?
Or at least post your entries and stops in realtime so I can take the other side, Redsails pretty please
Baron, you should set up a bookmaking - venture and make a market for bets on journals. I would be your best customer
I can do that but I would not advise you to make bets against me. I am learning fast and not going to repeat the same mistakes again.
I have a sound plan. Basically I think that dollar is going to weaken considerably in the near future as the FED will continue to keep low rates due to weak labor market. Brexit fears is the only thing keeping EUR down. As soon as the British vote for Remain this week, EUR is going to grow rapidly and exceed its May high. During this bull run I hope to recover all my losses.