2 weeks ago I was on a training webinar with Empire Trading. The education services within our iX Global platform. The trainer was talking about challenges and mentioned a platform called FTMO. A platform where qualified traders can trade higher capital accounts and earn 70% of the profits.
I've always traded small accounts as its my capital and I only trade with 'what I can afford to lose'. So the idea of trading with more capital was very interesting. My trading mindset and my strategy is getting better and after 18 months I thought a challenge like this could be really valuable to my own confidence with trading.
I researched their website, listened to their testimonial videos, read reviews, joined FTMO communities on FB and basically did my background work on this platform to check out their credentials.
I then thought, why not. Ill take the free 14 day challenge they have and see how I got on!! Very excited to report that in line with their rules and statistics I passed the free challenge.
My strategy was simple. I kept to a incremental lot size structure where I would set 3 take profit areas to work towards with risk increasing at higher take profit areas but I would off set that with moving my stop loss to protect profits.
I kept my margin level % at around 900% to allow trades set to move and create drawdown comfortably. As we know markets move all the time and we need to allow for that.
As you will see below from my results - my first week wasn't great but I put this down to figuring out what was right to help me win the challenge as their rules to be met.
So delighted with my first success, I've started a new challenge yesterday to see how I get on. I think I'll do another one after this and then Ill do a proper challenge with the goal of becoming a funded trader. I'm very excited about this opportunity. I'd never heard of this until a few weeks back and its just really opened up my trading mindset and the possibilities it could bring.
(Please note - this is my chosen methods and what I’ve done and works for me – its not what you have to do! Everyone is different and will approach the same topic differently.)
(note: complimentary blog post on this topic is How to use margin % as a guide and tool.)
Automation trading is great, but we will still need to take an active role in understanding what are accounts are doing so we can make our money work harder for us. However, this does not have to be hard and requires a few educated tools to have at your disposal to know what to do when you need to do something.
So, to help show these steps lets make up a scenario. The scenario is that your MT4 says the following (this is an example)
Understand your Margin Level % and know your drawdown
So you wake up in the morning and you see these figure. How do you interpret them? Your first key figures to check are:
What do these numbers tell me?
Well first they help me get clear on the health of my account. The Drawdown tells me that if I closed all the trades right now, that would be our loss, 1478. It also tells us how much active money is being traded in our account. The Margin Level % tell us about how much capital we have left for trading. The higher this number the great capital is available. It’s worked out by dividing Equity by Margin. (1774 / 186 x 100).
So 968% suggests we have a good amount of capital available to set further trades if we need too. With a comfortable 968%, I’d be watching my trades now, and just keeping an eye open on what is going on but not taking any action.
Know when you need to start considering your options
So, let’s say the drawdown deepens and my margin level % falls to 700% and there isn’t a clear direction where the market is going. I’d start to feel like I just need to pay more attention to this now and start to feel like I need to think about my options.
This can vary from person to person. In the beginning I started to consider my options closer to 1000% but with education and a stronger mindset to trading, I’m comfortable at getting to 500% before I consider my options. This part is up to you! What we are doing at this point, is getting ready for taking action on our automation account (if we need too). Ideally, we want the automation to take care of itself but it’s important to stay on top of its activity.
Its also that this point that many start to question the intent of the automation and the professional traders and it’s a natural emotional progression because we see activity going one way and we seemingly are going the other but we aren’t the professionals, we don’t see what they see.
Know what options you have to choose from
So, our margin Level % is falling. Our balance is also falling – things look concerning!! You are not sure what the outcome is going to be, and you certainly don’t what a margin call on your hands. So what options are open to you.
a) You can add more capital. A quick and simple activity to help raise your margin level % and give you more space. To protect your account raising your margin level % is a good option for you.
b) You can close a trade. I’ve done this move because I didn’t want to add more capital and chose to take a loss on an old trade which I knew would take ages to get back too. Doing this raised my margin level % and helped my account. Which trade to close depends on several factors but when I was deciding I was prepared to sacrifice old trades so I looked at them and you could take out a higher LOT size trade with a small loss and help release more margin level %. Higher LOT sizes hold more margin so another useful option when considering closing trades. You can close more than one trade if you want. Its just takes some decision making on your side.
c) Reduce your overall risk by reducing your LOT size. This is also an easy adjustment to make but its one I tend not to choose but I share it as an option. You see with automated trading the likelihood of going into a grid strategy is higher, so we use the larger LOT sizes to help us cover any loss of small lot size trades. When you see it in action, its pretty cool! Large lot sizes are a short-term goal to help accumulate profit to cover loss of other trades and to at least break even or close in a profit. I’ve seen a number of grid strategies come into play and I’ve always broken even or come out with a profit. It feels like a cleanse when you see a load of trades close on your account! You are then excited for the next chapter of trading.
d) If you have another trading account – transfer additional money (in the short term) from it if the margin level % on that account is healthy and comfortably over 1000% and you are not seeing any heavy market changes in the short term. I have moved money between accounts when margin on one account was low. Its quick and the transfer is immediate. You can always put it back once the margin level % releases back to a healthy level again
Decide which is right for you.
My commentary above are just options. You can do whatever you feel is right for you, but these are options that have worked nicely for me and helped me deal with the couple of moments of automated trading where you need to take a bit more interest in your account and be prepared. I’ve used 3 of these options. I hope to discover more as I get better at this. Ultimately it helps the ‘emotional’ part of your trading journey.
(The commentary I write is not financial advice, it is meant to help others with their self knowledge and growth).
Key Automation Question: Why do I see a good profit on my MT4 account but the trade doesn’t close and take the profit?
This is a question I get asked often because it does puzzles people in the beginning. The new starter sees a large blue profit number and they are thinking ‘why isn’t this trade being closed’? It is very frustrating for the beginner especially when they are eager to make profit and start to see the results they know others have benefited from. So Why does this happen?
So for example. I have two EURUSD trades that were opened on my account back in August 2020 at a price of 1.17978. Back at the end of March 2021 these trades went into profit for me and naturally you think, these should close. However, these EURUSD’s were opened on the master account on a different date and a different price. Eg. maybe 1.1300 as the Take Profit target is 1.1200. So for the Master account a currency price of 1.1798 means this trade is in loss and if it closed on the Master account it would be a large loss so the trade remains open until the initial entry price is reached or the target profit is reached. This means as your account is mirror a master account, trades will not close they will remain open.
What can you do?
The primary note here is always happens at the beginning of a new trader's journey and once into the swing of daily trading, this activity is gone. It only applies at the beginning.
If you need anymore guidance on this then let me know!
The commentary I write is not financial advice, it is meant to help others with their self knowledge and growth.
The big thing in forex trading is the over arching umbrella word ‘scam’. It’s got this really ugly cloak to those that haven’t explored or educated themselves on the topic. That cloak is full of dodgy information, bad publicity, dubious characters and potentially money being lost. So, when I share with people that I ‘trade’, 80% of the time there’s an immediate negativity around it, all shaped by the stories heard and seen. Clearly showing that trading though well intentioned is very much a misunderstood industry by many.
My own story.
I’ve always wanted to trade currency. Some of the movies I watched as a kid influenced the, ‘wall street, suited up, fast pace’ feeling. In recent years I’ve loved movies like, ‘The Wolf of Wall street’, ‘The big short’, ‘Inside Job’, ‘Wall street’. It’s the buzz and excitement around watching currencies and stocks be influenced by the sentiment of the people and the political activities that take place to make this happen. It was always something I have loved but never thought I would be able to do. Stories of losing thousands, scams, taking years to get educated and not feeling good enough to do it all ate into the stories of never getting into trading. Until 2019.
On the whole, when I've mentioned it to friends, family or acquaintances, it creates a strange energy of ‘hmms….not sure now of what you do!’ sounds dodgy!! And to the untrained, yes it can be. "Be careful Nick, it’s a scam" "careful you don’t get scammed", and "Its all illegal". So, my goal here is to just pull off that cloak on this topic and just help people open the door to a rather good way of making your money work harder for you. Trading isn’t discriminatory in anyway. If you get educated and learn some strategies and keep to your trading plan with key rules you can make it work for you. But its first getting past the first hurdle.
The Financial Conduct Authority
This is an important financial body in the world of trading. All brokers (I’ll come back to this term) are required to be registered with them to allow trading to take place lawfully. You can review their website and see the stringent terms and conditions brokers need to follow. You can also check up on brokers and those who have been called into question by the FCA. It was my go-to place when I was checking the broker I use. This is part of your education and really is a foundational subject to review.
All brokers are required to be registered with the FCA regulatory authority in the country they operate. All brokers provide legal documentation which covers your rights as a user and the terms in which you are signing up too. Its important you know this and read them. When you open an account with a broker, they will request you to identify yourself through supporting paperwork. They just want to check you are real and verify you. This is another important step when considering the trading services you will use. The broker is like your bank but for forex trading. They have access to the forex markets and they do the hard work of connecting you to it so you can trade different currencies. Most brokers are free to sign up to and they make their money via the trading activity you conduct. For example, commissions and swaps on trades taking place. They make money in other places too and you can read about it through the terms and conditions. Again, another important step in getting educated on forex trading. Brokers also provide resources, training and FAQ’s to help you with your trading. Use them – they are there to support you.
Algorithmic Trading/ Expert Advisors
This is the technology part of trading. Using technology to help you trade. Algorithmic trading/ Expert Advisors are trading robots – created by trading professionals to take the guess work out of trading and help enter trades based on a set of pre-set criteria. Algorithmic Trading isn’t new. Its been around for a number of decades and they are getting better. Technology is helping retail traders (like me) help get a step into the trading zone, start trading, earn some profit and learn on the go too. ‘Set and forget’ is another common phrase around algorithmic trading because the technology is doing the hard work that someone has programmed it to do. The key benefit of using technology with trading is that you don’t have to be watching the currency movements all the time, its done for you and it takes away the emotional part of trading. This I talk about a little bit further down. But your trading mindset is probably 70% of whole trading strategy. Like life, if you are too emotionally involved – you may not always make the right decisions. Algorithmic trading has a lot more advantages and is used heavily by banks and financial institutions too. We embrace technology everywhere in our life. Using technology in trading makes sense too.
I’ve been trading since January 2020 using an algorithmic service and its been the right decision for me. It has allowed me to work my capital properly and make a profit, its allowed me to learn more about trading while its going on around me and its disconnected the emotional part of my trading.
A great place to check up on algorithmic systems is the website called myfxbooks.com. Its basically a place where traders, systems and the results of their trading can be shared for all to see. Another great way to review a potential algorithm service you are going to use.
So where is the scam Nick if we have all this regulation?
The scam happens where people write tag lines saying, “I can turn US$200 into US$5000 in 7 days.” You’ve more than likely seen them. Scammers feed on the uneducated viewpoint. They feed on that emotional feeling of earning so much money in a short period of time. If you look up ‘forex trading groups’ on Facebook you will see so many promises of a ton of my money in a short period of time. It’s made to sound easy, achievable and accessible. Let’s be clear. Its accessible but achievable and easy are the to elements that need an upgrade quickly. Its never easy. You can have good trading months and bad ones but over a year if it averages out then it’s a good thing and seems easy. Achievable also yes. But your view on trading is important part of this story. If you think in 3 or 6months you will be a millionaire then you are mistaken. Trading needs patience, time, consistency and a plan. If you can’t hold those then its best you don’t get involved in trading. Be on the look out for them, but don’t’ dismiss the good ones. Do your homework, educated and start discovering.
When I was younger I couldn’t wait until I could drive. The offer of freedom, going where I wanted to go, playing the music I wanted in the car and hanging with my friends was simply great. But when I was dreaming about those days I did not think about the risks, learning to drive, insurance, fuel costs. Those were just back thoughts. But when the opportunity to drive came around I was so excited, so enthusiastic. I remember my first lesson, and would you believe, I’ve seen my mum and dad drive a manual for so long that when it was my turn to actually do it, I messed it up!!! I was so embarrassed. That was my first fail at driving. Then as driving lessons continued my confidence plummeted, I thought I’d never get it. The risks on the road, changing lanes, indicating at the right item, being mindful of other cars – OMG.. all of that was front and centre and at times I cried, felt overwhelmed, worried that I ‘d never be able to drive and be stuck in a taxi for life!! There’s mindset again!! All that played into my driving. You will be pleased to read that I passed my driving test first time, so I was really proud. Getting your license is such a badge to independence. Now I had to think about risks, I was still a learner really, insurance, fuel – the baggage that comes with the responsibility of driving is large. But as the years progress, we don’t think about it. Its something we do and get on with! With that long story – what I’m trying to say is that trading too comes with risk, learning to trade, capital concerns, worry of getting it wrong but in the long term as we get better at trading, learn from our mistakes we too can be better traders. It does not happen overnight. I am only 18 months into this journey and I’m still learning. I have a learner’s mindset always. My patience is better and I’m more comfortable now letting the market do its thing and I keep a reactive mindset. The moral of this paragraph is get educated. See what the trading world is like. Research it, do your due diligence and explore it.
I do make money while I sleep. Not a lot right (yet) but I’m in this for the long term. As I said above trading is a long-term activity that needs patience and consistency. My personal mission is to build this income stream and in the coming years see this as an income stream that covers our bills and expenses and helps us just enjoy life a little bit and take the pressure of the corporate rally we are in! If this is something you want to do, then get educated. See what your options are and plan! Then go for it!
Forex trading is a possibility for you, just get educated!
I'll continue to write on the subject of 'get educated' as part of my mission to help people see trading as a potential option for them! The commentary I write is not financial advice, it is meant to help others with their self knowledge and growth.
Most of the time my forex accounts operate with minimal interference from me. I get on with my day and the accounts busily work away in the background 24 hours a day, five days a week.
But that does not mean I don't get involved with them at all. It’s important that you keep an eye on the accounts and see how they are doing and be able to make decisions about them, if you have too. I will share with you how I operate my trading, so you have some guidance and how margin % helps you keep an eye on your account too.
What is margin level %? This is calculated by your equity/used margin x 100%. . The closer you get to using 100% of your margin the closer you get to being stopped out. You always want a healthy margin. At least 500, over 1000 is better, when we are running large lot sized trades.
My daily strategy.
So, 80% of the time I let the automation do all the work. iX focuses are helping us earn more money and we pay for their knowledge, insight and experiences to trade on our behalf. For busy professionals looking to see their money work harder for them, then why not! Daily, I check my drawdown and my margin % to see how the account looks. A couple of minutes of my time. I'm happy when my with a drawdown of 30-50%, I’m comfortable with that now. As you can appreciate, we need to have active trades to make money. I also watch my margin % which anything over 2000% I do not even think or worry about. I get on with my day!
When the margin % is getting close to 1500% I will start to pay a bit more attention and see for myself what is going on with the currency pairs. Not in a stressful way, just more of an awareness. What are the expectations from currency movers, what macro-economic activities are going on and coming up that could impact our trades. Again, I will not do anything, I'll just put myself in a 'more observation and tracking' mode. I am just being cautious.
When I'm just below 1000% and economics indicators are not clear then I'll think about options open to me to start thinking about. When you are here you are making more rational, unemotional decisions and will make a clearer judgement. A plan to have just helps you keep calm. Options like a) add capital, b) close trades, c) reduce lot size to reduce risk. They are all viable options and I choose the one that feels most comfortable.
As the margin % starts to fall its then up to you when you want to take precautionary action. 300% is for some, others it is too low. When margin % is getting close to 100%, your MT4 app will start to flash. It an indicator to you to do something to save your account. If you do not your broker will take control and close trades. You have lost your decision making on the account. It’s too stressful to be there and you don’t make great decisions.
I'm sure you are asking if I have been close to a 100% and what did I do? Yes, once. I got to 250% and felt I needed to start managing the account and making decisions. I chose to close a large sell trade which meant a loss, but I increased my margin % back to 400%. That move left me room for the currency pair to recover and replenish my account. The currency pair turned around, trades began to recover, some trades closed in profit and some in loss but we were back into healthy margin % again. Beside that that closed trade, I did make a tiny profit on the eventual closing on all the other trades involved. So, a small loss overall but I was happy with the eventual outcome.
In all my time with using an automated service this was the first time I had taken action and I felt I made the right decisions at the time. With hindsight, I wish I had not closed that trade but when we are trading, we have to remain in 'reactive mode'. We cannot predict the future. The loss happened and I quickly recovered that loss through new trades set in the following weeks. Your mindset for trading is important. Have a read of my blog on my first year of trading and my learnings.
It’s now March 2020, and next week marks the end of the month, so I’ll be sharing my march results.
To understand your MT4 app please see read this blog post.
The commentary I write is not financial advice, it is meant to help others with their self knowledge and growth.
Drawdown is a measure of how far your account falls from the last account high to the low before you get back to the old high again. So, if your account topped out at £1,000 then dipped to £900 before recovering to £1,000 again, you've had a 10% drawdown.
Drawdown can be the source of lots of concern for a newbie trader. They see a minus number at the top of their MT4 app and get really concerned they are about to lose that number. So, I want to put your mind at ease with what I’ve learnt about drawdown and how to have the right mindset around it. I’m not an expert in this but this is my experience I’m sharing with you and if you need more technical information then I’d suggest do your own research around this topic too!
1. Drawdown is part of trading. It will happen every day when trades are set. Its part of the process. When new trades are set you may be lucky, and it jumps right into profit and you hit your target profit straight way, but I’d say 99% of the time drawdown happens first. Its going to be a part of the trading picture going forward.
2. Drawdown means that trades are in play and your money is being actively used to create the money growth activity that you want. If we didn’t set trades or have drawdown we wouldn’t be trading or seeing any profit. If this is not what you want to do then find another income generation method that suits your tolerance levels.
3. I make a note of the dollar at the 10% - 30% drawdown and keep those in my head when I am looking at moving Trade value at the top right of your MT4 app. This helps me roughly know where we are in the drawdown and help you see. For example, my account balance is valued at US$3362. 10% of that is US$336 and 30% is US$1008 so when I look at my MT4 ‘active money’ value I know roughly where I am within these numbers.
4. Drawdown doesn’t equate to losses unless all those trades that are showing loss are closed. They only count if they are closed. When they are in play, I have no problem with seeing the drawdown.
5. Become comfortable with your risk appetite. If you don’t like a lot of risk, then either don’t trade and find another passive income generating method or keep your account small so you are only risking what you can comfortably afford to lose.
If you are manual trader then your drawdown percentages and your risk appetite will be very different, and you will have to create your own risk management plan around your trading plan. There is a lot of wisdom out there on the internet on this.
NOTE: Past results can be verified and if you look in the tab called 'My Results' - you will see my results I have been sharing. Past performance is not indicative of future results. If you are interested in registering or getting more information on this trading system, please message me.
The images below show how the active trade values can vary in a timeframe. The first image is with around 14% drawdown. The second image is 10% drawdown. In an evening the drawdown has reduced and the AUDJPY is trading bearish!. I'm comfortable looking at this. Would you be?
Caroline is a customer services agent within the food supply industry, living in Northern Ireland. She was originally introduced to forex trading a few years ago but didn't take start her automated trading journey until the summer of 2020
She has been more than delighted with its progress. She has found the whole experience not just to be monetarily helpful but it has helped her confidence and outlook. In this interview,
Caroline shares her journey, how it has impacted her life, her mindset and how she feels those looking at it should consider its potential for them. thank you Caroline for your time and energy. It was so lovely to sit down and chat with you!.
Firstly I'd like to say thanks to Viktor for his time and sharing his trading journey so far. We had spoke a number of times on telegram chat but this was the first where we had sat down and had a conversation about the trading and how its been for him.
Viktor story is one of seeing what is possible and just going for it. He's taken monetary action in many parts of his life and 18 months into his money growth journey he is starting to see the benefits.
He's such a nice guy and well deserving of all the successes he has had. I can't wait to see how his story develops in the ocming year and see his family and him go from strength to strengh. This is his interview.
note: I had a computer crash shortly after this recording and was able to save the audio. Instead we plugged the space wtih pictures of Viktor and his family and pictures of Edinburgh, where he lives.
Caroline is a respected money coach and has been in the financial industry for 20 years. She's has helped many form a better relationship with their money. She started her forex journey back in July 2019. She started with using trading alerts and quickly migrated to the automated trading service provided by IX Global. In this interview she shares her journey, her challenges her learnings and she advise to those thinking about considering forex automated trading services to help them towards residual income.
I serve people who want their money to work harder for them instead of it sitting in the bank.