Paper Trading Day 30 of 90

1/3 of the way there a good time to review what has been happening.

FOREX:

Closed one trade today Euro / US Dollar taking a lose of $1130.

Profits on open trades stands at $9,492.65 and profit on closed trades is -$4,905.20 a total of $4,587.45 or an increase of 12.4%

With three open trades in the red and seven in the green and over $9,000 in profits on open trades, on the other side we have close to -$5000 in closed trades. Just from looking at the open trades I can see that over $8000 of the open profits is in three trades, and none of those three has the US dollar in the pair. As I have mentioned in the past the US Dollar seems to be very turbulant at the moment, in my opinion. And as 18 of 25 losing trades have the US Dollar in them it would seem that I would probably be better of not trading them at all. If I removed all closed trades with the US Dollar in them I would have close to $2000 in profits on closed trades.

If I only traded the four currency pairs that dont have the US Dollar in them the difference would then be that profits on open trades stands at $8,204.35 and profit on closed trades is $1,982.15 a total of $10,186.50 or an increase of 27.53% on my original balance thats more than double what it currently is plus both open and closed trades are in profit.

I believe that Lifestyle Trader suggests that you paper trade for 90 days for this very reason, so that you can see what happens before you use real money. I think that from now on with forex I will keep two sets of records, one for all ten currency pairs and one just for the four pairs that dont have the US Dollar in them and I can see how they compare for the next 60 days.

COMMODITIES:

As always not a lot to report here. I was stopped out of my short trade on Feeder cattle, however because I am using trailing stops as suggested at the three day trading workshop, I came out with a profit of $1,032.50.

As I mentioned last week Cocoa seems to be my horror story and it has done it to me again closing the day on the wrong side of my entry price with an exit signal and an entry signal to go the other direction. Overall my open trades are down a little on yesterday, however over the long term they do seem to be trending in the right direction.

Profit on open trades is currently $3843.75 while profit on closed trades is $9,058 a total of $12,901.75 or a 26.88% increase on my original account.

As you can see I am doing quite nicely trading commodities and this is because I have only been trading Grains, Livestock and Softs. All food stuff and everybody needs to eat.

I was chatting with a reader of my blog this morning who is now live trading. He mentioned that his winning trades were less than mine and his losing trades were higher than mine and that things are quite different once you are using the live trading platform as opposed to paper trading where you use the open and close prices for the day. I agree whole heartedly that this is correct, however he also mention that while he was paper trading he made a profit of $90,000 but since live trading has lost $35,000. This seems to be a common story with some people, not all but some.

This was mentioned in the three day workshop and I have seen it myself in the past when I was trading shares. So what is the difference, surely the software doesn't know the difference between live trading and paper trading, it just reports what is. The difference is the emotions that we place around the money forcing us to do things not the way we should. Let me give you an example, I once went into a trade on Ansell an ASX top 100 company, the price was rising quite nicely then started to fall. Not wanting to lose any of the profits I had gained from this trade I immediately sold the shares at a profit of 73%. The very next day the price turned around and continued to rise over the next few months to a profit of close to 300%. The mistake I made was allowing emotion to get involved and not following the rules, If I had followed the rules I would have seen that the fall in price was actually a flagging pattern which is an indication that the price is going to continue to rise, not fall.

Guys these systems work, they have been tested time and time again. Now I am not saying that this will not happen to me again however, if you are not making money then you are not following the rules properly. Maybe you have an issue with money that you need to deal with and I can suggest a friend who is very good at dealing with these sort of issues. He is a mindset magician and a relationship guru and lets face it this is about our relationship with money. If you want some more information then get onto his website people insights - mindset magic.