Paper Trading Day 22 of 90

Saturday morning, not very motivated to rise early but must learn good habits if we want to be successful at trading. I can sleep in tomorrow. Today marks the end of my first month of paper trading Forex and Commodities using Aussie Robs Lifestyle Trader software. If you Like what you see then you can email the sales department at sales@lifestyletrader.com.au and tell them that you have been following my blog, they might even give me a commission. or you could telephone them on 061 07 5630 2048. and you dont have to be in Australia to use this software, as we are trading on the US market we can trade from anywhere.

FOREX:

No suprises today, closed off five trades taking two profits and three loses of the table. The profits more than made up for the loses. Newly opened trades all closed in the right direction. ARLT signaled an long entry on Australian Dollar / US Dollar (good news for us aussies if it continues back up to were it was 12 months ago) and a long entry on EURO / Japanese Yen.

All open trades are in the green with a total profit of $4,328.05. Closed trades now stand at $342.50 -. A total profit $3985.55 or 10.77% on my initial opening account.

COMMODITIES:

A change in direction of Soybean Oil, Soybean Meal and Soybeans has meant a small drop in profits from 30.24% yesterday to 29.21%. All three of these commodites received an exit signal from ARLT and a Long entry signal for Soybean Meal and Soybeans. There was also and exit signal on my Short trade on Corn with a Long entry signal to go with it.

I thought I liked coffee before but now I love it, I entered a short trade on coffee on 14/8/09 (my birthday) The margin for this trade is $4,200, profits so far are $3,918.75 thats a 93.3% increase in one week.

So for my first month of paper trading, profits on open trades stands at $9,684.75 and closed trades are the same as yesterday at $4,333.75. A total of $14,018.50 or 29.21% on my initial account of $48,000.

Both accounts together have gained a total of $18,004.05 from a combined trading account of $85,000, thats an increase of 21.18% in one month. I dont know about you but I think I could handle $18,000 per month for just an hours work a day 5 days a week.

Paper Trading Day 21 of 90

Had a few beers last night from a boutique brewery in the Barossa Valley so my head feels a little muddled and slow this morning. Very interesting days trading on forex so as usual lets start there.

FOREX:

Seems like the good ol' US Dollar is dropping. This has signaled a few entries and exits today starting with:

• A long entry signal for Euro / US Dollar.
• There is an exit signal for my short trade on British Pound / US Dollar.
• An exit signal for my long trade on US Dollar / Canadian Dollar which also signals a short entry.
• A short entry on US Dollar / Swiss Franc.
• An exit signal on my short trade for Austrtalian Dollar / US Dollar.
• A long entry signal for Euro / British Pound.
• And exit signals for short trades on Euro / Japanese Yen and British Pound / Japanese Yen.

Both the last two trades have been very profitable so we will see how things sit tomorrow morning when we get the open price for all the entries and exits from today.

COMMODITIES:

Very humdrum as things are chugging along nicely. All open trades are going in the right direction. Only two trades in the red, being corn and soybeans however soybeans is heading the right way now. There is a long entry signal for Lean Hogs and a long entry signal for Cocoa.

Profit on open trades stands at $10,181 and closed trades is the same as yesterday at $4,333.75 a total of $14,514.75 a 30.24% increase on the initial balance.

Paper Trading Day 20 of 90

Got up early this morning and made poached eggs on toast for breakfast. What has this to do with forex, well lots actually. I have found that if I dont have breakfast before I start my trading then I tend to not have it until just before lunchtime then skip lunch. Not a very healthy way to go. It is my intention to have a long healthy and active life with the money I am going to make from trading.

FOREX:

The market was a little different this morning but in a good way. I closed off two trades that I had signals on yesterday. The first being US Dollar / Swiss Franc which gave me a profit of $320 or 15.67% of the margin in just 5 days. The other being Euro / British Pound. I entered a long position on this pair on the 11th of August and unfortunately the opening price was below the buy price when I excited giving me a lose of $846. The exit signal for this trade was also an entry signal to go short, however I missed this luckily as the price went up.

Currentl open trades are:

• Short on US Dollar / Japanese Yen, opened at 95.38 currently at 94.025 in the green
• Short on British Pound / US Dollar, opened at 1.6348 currently 1.653 in the red
• Long on US Dollar / Canadian Dollar, opened at 1.1081 currently 1.0949 in the red
• Short on Euro / Swiss Franc, opened at 1.5292 currently 1.5164 in the green
• Short on Aust Dollar / US Dollar, opened at .8206 currently .8286 in the red
• Short on Euro / Japanese Yen, opened at 136.39 currently 133.745 in the green
• Short on British Pound / Japanese Yen, opened at 160.115 currently 155.425 in the green

So I have four open trades doing well and three doing not so well a total of $4,615.70 in profit on all open trades or 22.11% of the margin of $20,874. Closed trades now sits at $1,551. A total profit of $3,064.70 or 8.28% on my initial account.

COMMODITIES:

Today I was stopped out of my coffee trade with a lose of $870, well below the amount set by the risk management rules. I opened two new trades today, Feeder Cattle and Live Cattle going long on both as a result of signals from ARLT (Aussie Robs Lifestyle Trader software) yesterday. Feeder Cattle is up $175 for the day and Live Cattle is down $40 so far so good.

My other open trades are mostly going well however I am slightly down on yesterday as a result of coffee being stopped out. There are no new signals to enter or exit for today.

Current margin is $30,680, current profit on open trades is $8,685 and profit on closed trades is $4,333.75 a total profit of $13,018.75 a total of 27.12% on my initial account.

Paper Trading Day 19 of 90

Since I have been paper trading for nearly four weeks prior to starting this blog, I will start with todays results. And because data for forex comes in two hours before the data for commodities I start the morning at 7:15 am with my forex trades and a capuccino.


FOREX:

Today was a funny day where all my forex trades seemed to be going in the wrong direction. We were told at the three day training workshop that forex is a volatile market, however I intend to see it through for the sake of learning. I have open trades in all the currency pairs except Euro / US Dollar. Profit on the open trades is $1,553.45 and closed trades is -$1,025 a total profit of $528.45

My initial paper trading account for forex of $37,000 has increased by 1.43% to $37,528.45. not fantastic for nearly four weeks of trading but still better than the bank pays me.

COMMODITIES:

I currently have open positions in Corn, Oats, Rough Rice, Soybean Meal, Soybean Oil, Soybeans, Wheat, Cocoa, Coffee, Cotton and Orange Juice. All these trades so far are profitable except Corn, Soybean Oil and Soybeans.

My total profits on open trades is currently $9,308.75 and total profits on closed trades is $5,203.75. A total of $14,512.50 in just under four weeks. I can tell you that puts a smile on my face even though it is paper money not real.

So my initial paper trading account for commodities of $48,000 has increased by 30.23% to $62512.50.

In future posts I will let you know what trades I am entering and exiting as well as the opening and closing prices for them. I will also ask the people at Lifestyle Trader if I can display pictures of the software so that you can see the opening and closing signals for each trade and my profit/loses recorded in the spreadsheet.

A Little Bit of Background Information

Some basic risk management rules we learnt at the three day training workshop are:

• never use up more than 75% of your trading account in margins (a deposit that your broker takes in order to process the trade)
• never lock up more than 30% of your trading account in margin on any one trade
• never risk more than 5% of your trading account on any one trade (the amount you risk is the difference between the opening price or the price at which you bought the commodity and the stop that you place on the trade)

There are two types of trades you can enter into Long Trades and Short Trades. Let me explain, a long trade is when you expect the price to go up so you buy with the expectation that you can sell later at a higher price. A short trade is when you expect the price to go down so you borrow shares and sell them with the expectation of buying them back later at a lower price and returning them. A better explaination of Trading Short can be found here.

Forex (foreign exchange) for those that dont know is trading in currency pairs. There are ten currency pairs you can trade in ARLT these being:

• US Dollar / Japanese Yen
• Euro / US Dollar
• British Pound / US Dollar
• US Dollar / Canadian Dollar
• US Dollar / Swiss Franc
• Euro / Swiss Franc
• Australian Dollar / US Dollar
• Euro / British Pound
• Euro / Japanese Yen
• British Pound / Japanese Yen

In order to stick with the above risk management rule of using no more than 75% of my account in margins, I would need a opening account of about $37,000 US Dollars in order to trade all of the currency pairs.

Commodities, from the training workshop manual, generally mean a physical substance like wheat, corn or gold etc. there are eight types of commodities you can trade with ARLT these being:

• Currencies
• Energies
• Financials
• Grains (wheat, corn, soybeans etc)
• Livestock (basically cows and pigs)
• Metals (copper, gold and silver)
• Softs (coffees, cocoa, cotton etc)

It is suggested that it is best to stick to trading Grains, Livestock (except pork bellies) and Softs (except lumber) to start with, as these commodities tend to trend well. The margin needed to start trading them and stick within the above rules is about $48000 US Dollars.

So with this in mind I need an account of about $85000 US Dollars in order to start trading all forex currency pairs and all of the grains, livestock and softs. For the purpose of the exercise and to see how well I do with each of these two markets I will keep the two initial amounts seperate. Easy to do with the spreadsheets provided by Lifestyle Trader.

First Post

I recently attended an event called "Resolving The Money Riddle" hosted by Paul and Mary Blackburn in Sydney, Australia. I highly recommend it. you can find out more from Beyond Success. It was a three day event which included three, ninety minute guest spots with Carli Crutchfield (property development), Andrew & Darryl Grant (internet marketing) and Steve and Sharon Skidmore (share market trading).

Steve and Sharon use the ARLT (Aussie Rob Lifestyle Trader) software to trade Commodities and Forex. Having done some technical trading in the past I was blown away by how easy the ARLT system was to follow and how well Steve and Sharon were doing with it. After hearing their story I immediately bought the complete package that they had and was looking forward to going home and starting my new life trading commodities and forex.

As part of the support that Aussie Rob and Lifestyle Trader supply, there are monthly traders club meetings where you get to meet other traders and compare notes as well as getting more education. I attended my first traders club meeting the other day here in Melbourne and met a couple of guys who had just heard of ARLT and wanted to know a bit more about it. One of them said that he did a search on the internet to see if anyone had made any comments about the software, good or bad, and the only thing he could find was a comment made by someone who was unsuccessful with the software but admitted that he had not followed the rules. This led me to think that I should start a blog to journalise my trading experiences with the ARLT system.

Aussie Rob suggests that you paper trade for ninety days before you start with real money. This gives you the experience you need to make sure that you can follow the rules correctly and not make any mistakes and that you develop the necessary habits to ensure that your trading is successful. The education and support that Lifestyle Trader supply is exceptional, I guess because if they can help you to become successful then they in turn are successful, you bomb out and they will quickly get a bad reputation.

I started paper trading about four weeks ago and I must say that I am quite pleased wth the results so far. The first two weeks were a bit hair raising as I had open trades that were showing a profit but closed trades that were all loses. Put all together and I was still in profit but I was concerned about all the closed trades that weren't profitable.

I then attended a three day workshop that comes as part of the package that I purchased, with questions as to why I had so many closed trades that were loses. Our trainer was Mario a very likable guy who has been trading for a number of years. We had two days in which Mario talked about options, risk management, more options, trading platforms and more options. Do you think that by the third day I knew a bit about options?

Then we got onto commodities and forex, and the very first thing that Mario said answered all my questions. I felt much better about what had been happening with my paper trading and left the workshop feeling much more confident and excited about what was about to happen.