The Forex holiday fund

This is just for a bit of fun, really.
I opened up an account with oanda last wednesday with £150. Obviously I cant expect to generate any sort of income with an account that size so i decided to try and turn that account into enough money to pay for my spending money for when i go away in the summer on a boys holiday! (or go bust!!!)

I am trading tiny stakes. usually around 1000 units which is around 5p per point?
Due to the mad volatility in recent days I have managed to make 790 pips.

The account now stands at around £190

I will update whenever a reasonable move in my equity takes place (good or bad)

candles said:

Obviously I cant expect to generate any sort of income with an account that size

Click to expand...

Don't be so sure.

I ran my £150 up pretty good.

Good luck with this

trader_dante said:

Don't be so sure.

I ran my £150 up pretty good.

Good luck with this

Click to expand...

Yeah, but i bet you weren't trading at 5p per point!
Thanks for the encouragement though.

Good luck! Should be fun! I'm doing a reasonably similar thing and started a blog to follow along. Is this the more customary place for folks to follow along?

jj

We should all pool our resources

Brief update.

Haven't had much time to trade this account last few days. Account is still more or less the same as it was on the last post.

Only traded the GBP/JPY today. Think I made around 120 pips or so. Can probably be worked out by them funky little arrows oanda put on your chart when you place a trade.

Look forward to getting the a/c over the £200 mark....sure is slow at these stakes though, lol.

If today is a good day the account will be over the £200 mark!

Average stake size since staring this experiment 13 days ago is 1000 units (5p per point)

I want the world, and everything in it, chico

Yesterday wasn't the great day i was hoping for, bu the account did manage to close around the £200 mark
£50 at around 5p per point is quite a few points since the experiment bagan a week or so ago. Wonder if i can lose it all as quick??

Lets throw a chart in the mix for the sake of it.

Im short the GBP/JPY here for a swing from around 212.67

Im looking for 210.80 with a stop at 214.15.

210.80 was a previous resistance zone.
It is also the 38.2% fib retrace level from the swing low on the 7th of feb to the high made earlier today.

candles said:

Im short the GBP/JPY here for a swing from around 212.67

Im looking for 210.80 with a stop at 214.15.

Click to expand...

Imcovering half of this trade here at 211.67 for 100 pips profit.

Stop on other half being moved to break even

210.80 taget?..... close enough

Closing other half of the 212.67 short here.

Well, we're over the £200 hurdle.

Sure was a slog. A bit sad about the fact that Im gonna get charged £30 or so when i do finally withdraw my winnings (if im still winning that is). That translates to quite a few points at these stakes.

Thats it from me for now.

Just an update.
Account slowy growing with baby stakes.

ah ha! Id totally forgotten about this little journal. I turned the £150 into £400 in the end which was shy of my target i think.

Anyway, since then I have started a similar little experiment trading the spx and some forex pairs trading with tiny stakes. I funded the account with £400 mid May and have been trading at about 10pence per point and the account is now at about £1700. Recently I have been averaging about £60 per week at these a stakes which is a nice little side income and pays for my beers on a saturday.

The reason for this post is to get some views/advice. I am tempted to increase size but fear the increased risk. Considering I am happy making this small amount of money is it silly/greedy to up the stakes? At the moment i feel i can do what im doing everyday but at bigger stakes my psychology will change and may affect my decisions. The other part of me is very jealous when i go over to elitetrader and see traders such as spanish89 making so much money. Makes me think he's smart by exploiting any edge that he may have whereas im 'wasting' mine....?.....

I suppose you could look at the biggest drawdown you've had and scale that up to see how much you could lose on a bad day.

whats your system / strategy ?

advfntrader said:

whats your system / strategy ?

Click to expand...

up £34 today which is lots for my little account at 5 - 10 p per point. Was a good example of how being away from the screen can help you to hold onto winners (i never used to be able to run a position for 150 - 200 pips profit like i done twice today!)

advfntrader - my 'system' is just looking for areas on charts that have 'confluence'. Look at my 5th post on this thread as an example. It was a sup/res area which coincided with a fib level. Other trades are based more on 'price action' which is MUCH harder to explain. I think its something that biulds itself into your brain when you spend WAY too long staring at charts for hours on end.

£400 account is now over £1900 at stakes of about 5p - 10p per point.

ps - i dont really intend to be particularly active with this journal - was just trying to answer a question

Candles,

You have now answered my question (in another thread), about where one can trade for only 5p per point.

To offer a reply to your question about whether you should keep it small, or risk going higher, my thoughts are:

Increase it, but only incrementally, e.g. from 10p to 11p (if they allow such "granularity"), since that will be less of a shock if trades start going unexpectedly in the wrong direction. Then maybe do the same thing again, when the capital is a bit higher, and so on.


(I can remember when I foolishly started doubling-up my stake per pip, in the hope of winning faster. This was a sure-fire method of losing faster!).


Regards,
M.

cheers M.
Pretty much what i have decided to do. Gradual increase. It's hard watching people with much less experience / screen hours than me jumping in at £10 per point and making money, but i have to comfort myself with the knowledge that most of them wont last the test of time. Not just that - it shouldn't even affect me if someone else jumps in and keeps making lots of money, but i guess its human nature. End of the day, im consistently making a small second income and im happy with that and need to remind myself of it, lol.

Perhaps fixed ratio money management may help.

It's based on the theory of diminising marginal utility from economics. This theory says that you get greater utility from the 1st unit of something you consume, than the nth unit you consume.

For example, if you're in financial trouble £1000 means the world, whereas to a millionaire an extra grand means nothing.

Applying it to money management, if you used a fixed fractional method, based on say quarter-Kelly (optimal F), then your size will grow exponentially, since a smaller movement in the future produces the necessary P/L to be able to add a contract.

With fixed ratio, you come up with an amount of movement in the underlying - say 20 handles for e-mini S&P. This enables you to have a high fraction of your account at risk when the account is small, but lowering the fraction as you get wealthier.

Example

$10,000 a/c with a $1000 delta:

Assuming for <= $10,000 that you trade 1 contract, then the following account sizes are required to grow your size:

2: $11,000
3: $13,000
4: $16,000
5: $20,000
6: $25,000
7: $31,000

As you can see, the dollar gaps between the sizes are growing, reflecting diminishing marginal utility.

Be careful with this though - run simulations based on your past results for various "deltas", because in between the levels the method has martingale properties (falling account size but the same number of contracts).

Regards,
Joey

Hi Candles,

I started SBing at 10p and used to make consistant gains and like you each move was for many pips, then when I moved to £1 point or more I lost heavily. I put it down mainly to the fact the market was still trending (upto Oct last yr) and when I increased stake the market was no longer trending and volatility was massive.

Some questions, eg the trade on your fifth post,
1) you entered close to 212.67 target 210.80 and stop at 214.15, isnt this a very poor risk / reward (~50/50)
2) why didnt you enter close to 214 on the interday and set a very tight stop just above the previous highon 24Jan, eg 214.20
3) you seem to be trading the retracements rather than the major moves?

Pls dont take any of this in a negative way, Im just here to learn more,

Thanks