If you’ve been following along on my forex trading adventures then you know I have been losing money daily. In fact I only have enough left in my account to open a few more trades; yet, in my demo account I am making money. In fact, today, in my demo account with FXCM I finished the day with a profit of $1012.87 but in my real account with FXCM I finished the day with a loss $49.24. So what accounts for my inability to make money when trading with real money and finishing a day with $1000 in profit when trading with fake money?

First of all, there’s a world of difference when trading with fake money from the experience when trading with real money. When trading with real money there is the ever present consciousness of the fact that you’re trading with real money and every position you open could potentially turn against you and cause you to lose money. This awareness immediately places you in a state of agitation. You hesitate to open trades and then, when you finally decide to go ahead, you panic the moment you see that the trade is going against you. You decide to close the position, but just as you’re reaching for the mouse the currency rate begins to fluctuate in the reverse. You gain a pip and then another and then another. You start to feel a little excited. Maybe there will be a break out in your favor. The rate will speed up the chart by 30 pips in less than a minute.

However, after your 3rd pip there’s a five minute period where you’re stuck in a cycle of gaining 1 pip, losing 2, gaining 2 pips, losing 1, gaining 1 pip losing 3, gaining 3 pips, losing 4…. You start to wonder if you should close your position on 1 – 3 pips before things turn firmly back in the negative direction; but then you reason that you’re trading a 10K lot and 1- 3 pips is only $1 – $3. You need more than $1 – $3 dollars, so you wait; but before you can blink things get suddenly volatile. You lose 3 pips, 4 pips, 5 pips. You think to yourself “It has to turn back positive. Let me set a stop at 25 pips. There’s no way it will drop by 25 pips when it was just showing signs that it would gain pips.” But there’s another sudden flurry of movement and before you know it you’ve lost 15 pips. You feel so dejected you say to yourself, “what the hell, I might as well leave it and let it execute the stop. Who knows, maybe it will turn around before then.” It doesn’t turn around. You hear the blip or whatever sound your platform makes, if any, when your stop loss is executed. You’ve lost $25 and a little of your confidence.

After a few weeks of having this experience repeated you find yourself with too little money in your account to have any hope of recovering from your mistakes.

In demo mode, however, you don’t have any real anxiety about losing money. You’re aware that the money you’re winning and losing is not real so you don’t trade with fear of losing or with over-excitement about winning. Maybe when you first start out trading demo you might have some fear and excitement even while knowing you’re only play trading; but after you experience the real emotions that come with live trading, you have no anxiety when you go back to demo trading. The relief of knowing it’s not real money with which you’re trading allows you to trade more freely. And it certainly does not hurt to have enough money in your demo account to be able to afford to put $300 at risk for the possibility of gaining $1000, knowing that if you lose the $300 you still have enough funds in your account to be able to recover with a few successful trades.

This list of the 7 most common forex trading mistakes, as compiled by James Theiss in “The 7 Most Common Forex Trading Mistakes“, is definitely worth the read. I have to admit that I have committed more than a few of them, and that probably explains why I’m just a couple of trades away from wiping out my account.

The mistakes:

1. Trying to predict how the market will behave instead of reacting to what is going on presently
2. Continuing to trade in a losing direction as a result of making mistake #1
3. Not having enough money in your trading account
4. Having too many trades running
5. Not setting up stop losses
6. Not taking trading seriously (treating trading like a hobby)
7. Trading without a written trading plan

What is very interesting to me and in some way disheartening is that I have a demo account running and I am profiting in demo mode but lose in live mode.

I still have a few dollars in my FXCM forex trading account. I won’t tell you how few because I’m embarrassed; but it’s enough to open a few more trades before I run too low to open any trades. It has been an interesting experience thus far; but I am happy to report that I haven’t had any forex trading related stress or depression to deal with since my first disastrous week when I broke into tears over all the money I had lost.

My impression of forex trading at this point is that it is a pretty powerful tool to have at your disposal. If you’ve ever wondered what it would be like to have the ability to make money without having to do anything for anyone else first, without needing to rely on finding someone to buy your product or your service or pay you for some asset you possess that they want to use to benefit themselves, then trading forex has the potential to provide that experience. It’s an opportunity to grow money on any given day at any given minute; but there is knowledge needed of how to do this successfully, and this knowledge simply cannot be acquired in a few weeks.

I am not happy to have lost the better part of my deposit after such a short time, but I’m glad I opened the trading account and I intend to keep it active for as long as I am able to do so financially. There is a certain degree of comfort that is present knowing the possibility to make money is always there; and while I know the possibility to make money might not translate into actual money I can withdraw into my bank account in the form of profit from forex trading any time soon, having that door open gives me slight bit of hope.

Hope is not going to solve my financial problems, I am aware of that, but neither is hopelessness, and I would rather feel hopeful than hopeless. A sense of hopefulness makes it easier to persevere where feeling hopeless makes it easier to give up and start contemplating suicide; and as far as I’m concerned, even a false sense of hope is better than feeling like there’s no hope at all.

From the sound of what Anna Coulling writes on her incredibly informative website about forex trading, she is now trading forex full time and clearly doing well; but she did not start out making money from her first trade. Maybe she did not lose $1000 in her first 4 days of trading, but it is still encouraging to know that a woman who is currently enjoying success as a forex trader started with a similar story of losing money trading forex.
In Anna’s words:

I am now a full time online forex trader working from home, but started investing and trading nearly ten years ago. I began, because at the time I was working for someone in the industry, whose response, when I asked if he could explain something was, ” if I tell you that then you’ll know as much as me”. I took the decision there and then to learn for myself. I made many mistakes along the way, and wasted thousands on training courses run by so called experts. I have also lost money (and thus learnt how to trade safely the hard way)….

You can read the complete details on Anna’s website at making-bread.co.uk Maybe I’ll try to get a hold of Anna and see if she has any advice for women like me just getting started in forex trading.

If my experiences thus far have convinced you that you can’t make a living trading forex then you might change your mind after you’ve spent some time on Anna Coulling’s website Making Bread. I won’t tell you how much money I have left in my trading account. I’ll just say that it’s getting dreadfully close to the point where I will not have enough to open a single trade; but I still have not given up on my goal to make money trading forex. It’s only been a month after all. Actually, it hasn’t even been quite 1 month since I started trading forex with real money. It only feels like it’s been an eternity, but I have 8 more days to go before I’ve been doing it  for 30 days. Hopefully I can keep some money in my account for the next 8 days. I’ll still have broken records I think. I believe it usually takes 45 – 90 days for new traders to wipe out their account.

It hasn’t been “all” bad though. Yes, at the end of the day any profits I made with any trades are wiped out and I’m having consisten losses; but I continue to learn; and my chart reading skills improve little by litte each day. I even now know that Japanese candlesticks come in patterns that have names. It is probably something I should have known before starting to trade; but I can’t go back in time so I won’t worry about what I could have or should have done differently.

If you’re looking for a great resource for women trading forex by a woman trading forex then Anna Coulling’s websites are highly recommended. The menu below will take you directly to Anna’s information page on the topics shown:

• Trading Concepts
• Start Trading
• Trading Roadmap
• Technical or Fundamental
• How Markets Work
• Japanese Candlesticks
• Volume Spread Analysis
• Support-Resistance
• Technical Indicators
• Money Management
• Margin
• Spread Betting
• Equity Options
• Covered Calls
• Forex Trading
• Trading Day
• Best Stocks To Buy
• Trading Tools
• Record Keeping
• Trading Plan
• Psychology of Trading
• Fractal Finance
• Financial Astrology
• Trading Articles

You should definitely check out Anna Coulling’s website for more qualified information about forex trading.

Since I am trading forex with FXCM and having some concerns about whether or not they are practicing underhanded tactics to wipe out the accounts of new traders who don’t know too much about forex tips and couldn’t prove they are being scammed even if they might suspect the possibility, it concerns me to discover that two of their top strategists have left them and signed with another firm. None of this of course matters to you unless you are trading forex with FXCM or otherwise trying to determine if you should trade forex with FXCM.

Why have Kathy Lien and Boris Schlossberg left FXCM? I would be curious to find out, although I suspect they probably wouldn’t be forthcoming if their reasons have anything to do with FXCM being guilty of shady practices when it comes to traders who are easy to take advantage of. They would probably want to protect their interests and not open themselves to questions about their own integrity; or else they are contracturally obligated not to discus FXCM’s business practices.

Whatever the real situation it is certainly cause for concern that two of FXCM’s top strategists have left them.

Update: seems Kathy and Boris left FXCM because they received a better deal with another forex company (GFT) Kathy Lien and Boris Schlossberg Join GFT after leaving FXCM

I wrote earlier about my concerns regarding fxcm stop-hunting. That’s pretty much where I stand with my forex trading adventure at the moment. I continue to lose money but I feel much better about these losses than the losses incurred when I first started. I’m not depressed about these losses mainly because I feel that I’ve been making smarter decisions. I have not been opening trades at random points and then panicking and closing them or doing any of the other crazy things I did in the beginning.

If FXCM stop hunts then it assures I will continue to lose money until my account is wiped out. I can only hope there is no truth to any of the accusations that have been made about them and that the observations I have made so far have no basis in reality.

I suppose I could take my money out of FXCM and try another broker but they have pretty much all been accused of the same thing. I can’t see that there would be much difference from one broker to the other.

If things keep up the  way they are it won’t be long before my initial deposit is gone. I suppose I shouldn’t feel too badly about it. As I understand it most newcomers to forex trading end up losing their entire deposit; but it apparently usually takes 45 – 90 days. I don’t know if I can hang on to what’s left in my account long enough to reach the 45 – 90 day mark. I think I’ll be setting a record for the shortest time taken to blow my initial account deposit.

So why then am I continuing on with this you wonder? Well, I am enjoying the experience of learning about forex trading; and I like the idea of having the possibility of making money just by booting up my computer, logging into my fx trading account and buying or selling currency.

I’m still not suggesting that the FXCM stop hunting accusations you read about across the Internet have any validity. Frankly I am too new to forex trading to go around making accusations of the kind. It is more likely that my losses are the result of poor trading technique than that I am a victim of underhanded practices by Forex Capital Market (FXCM). I still believe they would have no reason to try to pocket every little dime they can get their hands on.

That said, I find it very interesting, that after the situation this morning where I entered a trade on the USDCAD and set a stop loss at 25 pips, before I knew it the market suddenly experienced a rapid movement where up to that point it was moving at a steady even pace. The rapid movement of course took out my stop; but what’s interesting to me is that after taking out my stop the rates very soon reversed back to where they had been when I entered the trade and for the rest of the trading day it never went back to where I had set my stop. In fact, it did what I had anticipated it would do in the first place when I decided to enter on a short order to collect a quick profit while the rates were still trying to settle in above the 10420 range.

Is FXCM stop hunting? I prefer to believe they are not; but I still think it’s bizarre that the market does the opposite of what is anticipated 100% of the time when trading in quieter less active conditions. I’m sure there’s an explanation and I’m sure my losses are all honest losses incurred as a result of lacking trading skills.

Trading with FXCM? Wondering if they practice stop hunting? If you ask Stephen Story he might suggest there’s a strong possibility. If you ask me, well, I am trading with FXCM and I have been noticing a funny little thing going on. I laugh about it although, considering I am losing my money it really isn’t funny. There appears to be a little monster that lurks around and waits for you set a stop loss, and once you set it, the monster stealthily creeps towards your stop and gobbles up your money.

As I prefer to believe FXCM doesn’t need to steal every little $25 bucks they can get their hands on, I’d rather think of it as merely coincidental, but there is certainly reason to wonder why, no matter which direction you go in, buy or sell, no matter how the market is moving, that little monster turns and heads after your stop 100% of the time.

FXCM is a no dealing desk operation. At least this is what they swear; and they are a huge company. You want to think they don’t need your money so they won’t cheat you. And I am certainly not accusing them of cheating me out of my money; but I do find it very peculiar how nearly impossible it has proved to be to make any kind of profit even now after I have calmed down from all the nerves and crazy mistakes I was making when I started trading.

It leaves me inclined to wonder if the accusations made by Stephen Story in his video Forex Trading #1: Retail Market Makers … Beware have more than a little grain of truth.

I’ve stumbled across a series of videos that would have been nice to stumble across earlier before I opened my live account with FXCM; but then again, I probably would have still gone forward and opened the account and done everything exactly the way I did it anyway even if I had found these videos earlier. I would probably have said to myself that Stephen Story probably has an agenda. Who doesn’t have an agenda? I came to the conclusion before I opened a live account that you can’t trust anybody involved in forex trading because they all have an agenda. You can’t trust the brokers, you can’t trust the people selling you training programs, trading systems, subscriptions to their trading signals newsletters; you can’t trust the people making videos even if they talk straight and look like they just honestly want to save you from making a big mistake and losing all your money.

Nevertheless, this particular video by Stephen Story is interesting to me because it is such an accurate description of what I have gone through so far trading live. Particularly where he talks about how you will not face yourself when trading in demo mode, but when you begin to trade live everything that’s at your core comes out.

My first experience live trading, which I arguably wasn’t ready to undertake, was definitely a head trip. I do have to wonder though if what Stephen Story says about market makers and retail forex brokers, of which FXCM falls into the category, is true. FXCM promised they don’t trade against you but Stephen Story insists they do in his video Forex Trading #1: Retail Market Makers … Beware. He doesn’t exactly call out any retail forex broker specifically but he does pretty much accuse all retail forex brokers and market makers of trading against their customers to ensure their customers will lose. If he is right does it mean that I have absolutely no chance of ever making money trading forex with FXCM?