First, I want to prove that this system works with real money in live market conditions.  Although some people may argue that this is almost like trading a demo account, I disagree.  Even having a small amount of money on the line is way more realistic than trading any demo account.

Second, I want to prove that beginners can start with a very small amount of money and only add more money when they are successful with the small account first.  This was Haji’s recommendation to beginners when I interviewed him and I think that it is very sound advice.  Starting small will be an integral part of my message on this blog.

Anyway, on the results.  It was a pretty good month…

January 2012 Results

The final result was +5.39% on the month. Yes, this will not make me rich, but it is a great start.  If you want to see all of my trades in this account in (almost) real time, check out my online Trading Report on MyFxBook.

I feel that I did a really good job of being patient and letting the trades come to me.  On the other hand, I did miss a couple of trade setups that would have been profitable.  But overall, I’m happy with the performance.

How was your trading in January?  Feel free to leave links to your trading reports on MyFxBook/MT4i, your YouTube trade reviews or your blog posts.  Let me know in the comments below…

I already have enough Viagra, thank you very much…I don’t need those links.

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Since I was on the freeway, I could not turn around.  I had to keep going.

Combine that with the speed and the fact that I was on a motorcycle and that made it almost impossible to take a picture of…it was elusive.  Eventually, I saw it enough times that I had to get a picture of it, just because it was so weird.   So I stalked it and here is the picture:

It looks a lot bigger in real life!

Consistent trading profits are also elusive.  Yes, that is a huge stretch…trying to connect a giant stuffed panda to Forex trading.  But I’m trying…

Anyway, here is the trade:

The final result was a +0.61% on this trade.  To see all of my trades in (almost) real time, check out my trading log and click on the full report.

But I don’t feel too bad.  I have seen other trade reviews on the internet and most of them are equally as lame.  So I got to thinking…how can I actually make them interesting to read?  This is my first crack at it…

The Trade

Of course, since I am only trading the EURUSD Wallaby at the moment, that is what I traded.  Here is the video review.  It is short, so stay awake because there is a funny video after the trade review.

The final result was a +1.14% gain on the account.  To see the complete process of how I started trading the Wallaby, check out the Wallaby thread.  To see my complete trading results for the Wallaby going back to December of last year, view my trading record on MyFxBook.

I am currently trading live, but in a small account that was started with $100.  I am doing this to establish a real track record and demonstrate to beginners that they can start with very little money and take very little risk.

The Prank

What is the best way to get back at your “buddy” on the trading floor?  Find out in this video:

What do you think?  Does something like this make my trade reviews more interesting?  Let me know by leaving a comment below.

Well, I didn’t have to wait long to get a trade setup this year.  Another trade setup in the Wallaby and I took it.  This trade was a little different from other Wallaby trades in that I actually added to the position because of what I saw.

Ordinarily, I would have called that gambling, but in this case, I had a really good reason based on the price action.  This raised the risk to more that my usual 1%, but not by much.

Enough writing….here is the video:

Results

The final result of this trade was a +2.15% gain on the trade.  To see all of my Wallaby trades since December 2011, check out my MyFxBook page. I have gone back to trading real money, but in a very small account.  This is to get around any potential demo trading restrictions and I am going to use this as example to beginning traders on how to get started.

If you want to see how I was doing before this, check out this post, where I show every single one of my demo trades.

I’m going to start my verifiable track record this year and stick to it.  Luckily, websites like MyFxBook make it easy to do.  Check out my tutorial on how to get started.  It is totally free to use.

Stay tuned for my goals in the next post…

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This is a case of a back-to-back trade that I probably would have missed before.  As I mention in the video, I think that this trade will eventually work out well.

I closed it out early because we are going into a weekend…a New Year’s weekend at that.  If it were almost any other weekend, I would have kept the position on because I like the price action.  It is also nice to go into 2012 with a clean balance sheet.

Happy New Year and Thank You!

Have a safe New Year’s celebration and thank you for reading my cheeky little trading blog.  I really do appreciate you taking the time out to visit.  It still seems a little weird to me that people would be interested in reading what I write.

I know that every blogger says this, but 2012 will be a big year for Trading Heroes and my trading.  I finally feel like I am on the right track after a little soul searching.

To stay up to date, follow me on your favorite channel, Facebook, Twitter, Email, RSS or Google+.

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This trade required some patience.  I actually entered the trade back on the 23rd and only closed it out last night.  I exited the trade early, as you will see in the video.

This is something that I may not have done in the past, but my backtesting has helped me realize that sometimes it is better to take a small profit when price is not doing what I want it to, than to wait around to get stopped out.  Will this mean that I will miss out on a big profitable move here and there?

Sure.

But I am OK with that.

The final result was a +0.17% gain on the account. That’s not going to get me my Porsche any time soon, but at least I didn’t lose money.

Click here to see my public report for the Wallaby trade. As I mentioned in this post, I have moved my journal back to MyFxBook and am using it with a very small live Oanda account.  If you want to use MyFxBook with Oanda’s MT4, check out this post on hooking them up.  MyFxBook also works with the Oanda FXTrade system too…and very well I might add.  I’m glad that they got that fixed.

This will allow you to track my progress in real time and see how I am really doing.  If you want to see the results of my trades as I close them, you can also follow me on Twitter.  How many other forex trading websites actually show you their live results?

Questions and comments are welcome in the comments below.  Hope you are trading well!

I chose IBFX to demo trade with because as long as you placed a trade every 30 days, they wouldn’t shut down your account.  Well, I guess I didn’t place a trade in the account, so…yeah.  You are probably thinking that it isn’t the end of the world, and it isn’t.  But it really throws a wrench into my continuous track record.

So before I put that account to rest and show you what I’m going to do next, here are my results.

The demo account started with $5,000 and ended with $5,279.20, for a 5.5% gain in 98 days.  Not a huge gain, but it was profitable.   I had a 73.6% win rate during this time, but I only had 19 trades.  You can check out my trading report here.

Of course that is way too short of a time frame to make any solid judgements about the system or my trading skill.  Therefore…

My Next Move

I really need to establish a track record on a continuous basis and I cannot be concerned with placing a trade every 30 days.  Therefore, I am going to reactivate my live Oanda account and trade it on a really small scale.

It has $100 left in it, so I’m going to use that as a starting point.  Then I’m going to hook up my account to MyFxBook and use that as my reporting system.  This will also be a good lesson for beginners in starting small.

Yes, this goes against my promise to not trade real money until I clear up my debts, but I don’t see anywhere to go, trading wise, unless I can establish a track record.  I can only do that if I have an account that will stay open long enough to prove that I am actually a good trader.

And at the end of the day, this is what this blog is all about…developing the chops to make it as a pro.

To answer my question, I fired up Forex Tester again and used the same parameters as in the first test, with the exception of changing the profit target to equal the stop loss.  My hope was that the system would be right more often, leading to more winning trades and more profits.

Equity Graph

This is graph is a little smoother than the last test, which is good.

Click above to see larger picture

The Stats

Days processed=3826
Months processed=127.53
Total trades=428
Profit trades=259
Loss trades=169
Profit trades cons.=8
Loss trades cons.=6
Trades/day=0.11
Trades/month=3
Profit trades/month=2
Loss trades/month=1
Max profit trade=113.10
Max loss trade=104.40
Net profit=5978.94
Gross profit=18509.54
Gross loss=12530.59
Profit/month=46.88
Average profit=71.47
Average loss=74.15
Max drawdown=702.90
Profit factor=1.48
Return, %=119.58
Max lot used=39.00
Restoration factor=8.51
Reliability factor=0.07
Profit probability, %=61
Loss probability, %=39

The First Test

Just to make things easier, I’ll post the results from the first round of testing here.

Days processed=3821
Months processed=127.37
Total trades=536
Profit trades=275
Loss trades=261
Profit trades cons.=8
Loss trades cons.=7
Trades/day=0.14
Trades/month=4
Profit trades/month=2
Loss trades/month=2
Max profit trade=557.60
Max loss trade=212.48
Net profit=9835.96
Gross profit=34231.51
Gross loss=24395.55
Profit/month=77.23
Average profit=124.48
Average loss=93.47
Max drawdown=0.00
Profit factor=1.40
Return, %=196.72
Max lot used=44.00
Restoration factor=0.00
Reliability factor=0.00
Profit probability, %=51
Loss probability, %=49

Conclusion

As you can see, limiting the profit target did increase the number of profitable trades, but it also decreased the profit amount by about 77%.  There was one strange thing…there were about 100 fewer trades in the second test.  This is one of the variables that can happen when doing manual backtesting.  Based on these results however, my conclusion is that aiming for support and resistance levels like in the first test is a better way to trade this system.

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Of course, past results to not ensure future returns.  My full disclaimer is in the footer below.