ForexSpirit

Yesterday evening I was sitting pretty with a few percentage points of gain from all my open trades. I left things in place as my objective was to close them all out once my Q2 trade (opened at 1.3822 on August 6th) was in the black too. In other words I was waiting for price to retest the recent high, with limit orders set in the 1.3840-50 region.

The news overnight of the subprime impact on BNP Paribas and ECB easy money splurge have put paid to any chance of those limits being reached this week. The euro tumbled during the European session and into the early New York session as the flight to safety dynamic kicked in and money made its way back to the United States from Europe.

This morning I cut my losses and closed out all my positions. This resulted in a sizeable loss being realised. For the month I am down 8%.

When price goes through sizeable corrections I often see my unrealised equity balance experience losses of this size, so this is not exactly something totally new. Such unrealised losses exist because currency pairs are mark-to-market instruments.

There is a particular reason why I decided to turn those unrealised losses into real ones instead of riding them out and otherwise following my trading plan.

I have opened a new brokerage account with forex.com (also known as Gain Capital) and I need to transfer my money over from my current broker.

I have to switch brokers as the forex fund that is going to be evaluating my performance uses them exclusively. This way they are better able to monitor my trades and verify my results.

I’m well aware that Gain Capital was fined earlier this year by the NFA for dodgy marketing practices. They certainly aren’t the only forex broker to have paved the road to easy money with their advertising. I have also been assured that their execution and backend services are better run.

I am going to put any thoughts of forex training or coaching on the back burner for now. While I think I can talk the talk with a certain level of proficiency, I think it much more important for me to be able to walk the walk.

With the recent changes to my trading plan and more elevated financial objectives it’s time to find out if I have what it takes to be a real trader.

Given the euro’s weakness this morning and the continuing drama of the subprime mess unfolding in Europe I think it will be beneficial to have to stay on the sidelines for a few days. I am quite content to wait for the euro to drop further; I think it could well drop another 100-150 pips before deep discount buyers step in to retest the 1.3840 highs.