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For those of you following me on myfxbook, you will now see that following Septembers disaster and learning curve that left me at 79% drawdown, and the 2 very successful months that have followed, I now have no drawdown in terms of pips (I’m now 44 up overall)…. BUT… I’m still at 69.2% draw down in terms of cash! So why is this?
A classic example illustrating how trading with too much risk and not enough consistency can potentially destroy a new trader!!!!!
So now I guess is a good time to tell you about my personal goal… in September when I sat back and re-evaluated my risk after taking such heavy losses, the easiest thing to do at the time would be to a) just take some more silly risks and hope for the best as my account was so far gone or b) just start again on a new account or c) just give up.
But I didn’t do this.
Why? Because I wanted to show the community of new traders that as dire as things get it isn’t too late to rescue a system in draw down… the fact that I’ve gone from nearly 80% drawdown to less than 70% in 2 months shows that it is always possible to rescue an account. My goal now is to continue to make consistent profits and slowly reduce the drawdown figure and bring the account to overall profit. The important thing to note here is that the key factors enabling me to start healing this account have been addressing my risk, adding more specific exit rules and more importantly, staying consistent with all of this.
The fundamental rules of my system i.e. what to trade have barely changed since day 1. This really goes to show the difference between Consistency vs. Non-Consistency.
In terms of trading this week – well I bagged 90 pips on Friday shortly after posting last week’s blog, giving me 8.47% profit for the month. This week has been slow – maybe down to the American holidays however I was pleased with the 4 trades that I took and won, giving me 55 pips. The thing I’m most pleased about, reflecting on the past 2 months is that I’m proving with real money (not demo) that good profit margins for the month are achievable WITHOUT having to take big risks.. As stated previously I am only risking 1% on any given trade and I am staying totally consistent in the way that I trade with no hesitation. As of now I am 9.61% up for the month. (I’m hoping to hit the 10% mark next week, but we never know what the market will throw at us – something I vowed never to take for granted).
That’s it for now but I’ll be back next week, until then, happy trading.