In my last @moneykeep Saturdays savers entry, I mentioned how I had began my journey in forex and currency trading.
I also mentioned how I planned to be writing my experiences on hive, making it like a collection, something I could bounce back to and read about my past experiences. Coincidentally, the May Inleo Prompt of today asks us about our experiences while trading.
In my small time in the foreign exchange markets, the one piece of experience I can give to another newbie is a simple line.
Beware Of Gold!
In all honesty, I started trading since beginning of February. Back then I was a new fish in the big exchange pool, ready and eager to make some money.
I had entered at the perfect time too, just put my deposit on the 31st of January, having practiced in demo for some time, I was confident of my beginning skills, hopeful of the amount I could earn and nervous of the other outcome.
The 31st of January was a Monday, on Tuesday, I set my first trade.
A sell on EUR/USD.. Wasn't looking for much, just least 60 pips, I was lucky. Profit made, confidence risen, life was good.
The next day was D-day, the first Friday of the month, Non Farm Payroll Day.
Non Farm Payroll (NFP) is a monthly report of the amount of jobs earned in the previous month, excluding farm workers, private entrepreneurship, etc. This news is a strong indicator of how good the United States Economy is doing and a strong current which different currency pairs ride on, especially Gold.
Normally this isn't a news that a beginner trader is meant to rush in to, but as I said, I was eager to make money.
The news releases every Friday by 1:30pm, at 1pm, I was ready, joined a group of more experienced traders and we all sat and waited, looking at the charts.
The catch about the NFP news wave is that one has to guess which way the market goes immediately 1:30 hits on the dot.
Sometimes the direction of the market is easy to see, other times one would have to play Russian roulette with only two rounds left.
1:25pm, and the market had began to change, everyone noted it, some smiling already.
It's going to buy.
Whispers were already going round.
I kept looking though, the lows were becoming a little bit too low.
Everyone had already decided it was going to buy at this point, me included, all we were doing now was waiting for the last possible minute to enter so we could get the most profit.
At 1:29, the candle started to go up, the spread was widening, in shock everyone clicked buy, some people went all in, over lotting, no time for stop losses or take profits, this was a wave and you had to embrace it with reckless abandon.
10 dollars.. 20.. 30 the profits were piling, everyone was happy, cheers were already going.
Then 12:30 hit.
The drop was abysmal, you'd think the candle fell from a twelve story building, in less than five seconds, +30 dollars was reason -50.
It was a slaughter bath, plenty drowned, I needn't check my account, I already knew what had happened.
A 15$ deposit, 10 initial plus the 5 I earned on EUR/USD the previous day, all gone.
It felt like a punch to my stomach, a knife to my side. 15$ back then was approximately Thirty Thousand Naira, a considerable sum, gone in 5 seconds.
That was my first tangle with gold.
After that ordeal, I met a friend who managed to save some of his losses, because instead of gold he went in with AUD/USD, a currency that was linked to gold and also linked to the US dollar and so affected by the NFP. Yet his sum was saved because of the low spread.
This opened my eyes to just how dangerous gold was for newbies with little capital.
He had 30$, yet managed to close the trade and save 20$, just 10$ lost.
Still a loss but it was better than mine.
If I had 5$, I could have raised it back.
So I took some time off, licking my wounds and sharpening my knowledge on linked currency pairs.
XAU/USD (Gold)🔗AUD/USD🔗CAD/USD and the EUR/USD🔗GPB/USD and 🔗EUR/GPB link
This knowledge was fundamental as they helped increasing my profits and my loss.
It also helps in my next tactic against June's NFP.
I started trading in a new broker last week and I've still gone digging for gold on there..
And I was lucky cause I struck it hard.
The joy of winning made me forget how fickle of a pair it was...
Tried taking back what I took from it.
Well for now I'm through with Gold, realized I don't have the capital for it, and I can't keep relying on my luck for it.
Forex trading is based off calculations, chartings, instinct and news. Yet sometimes, the trade decides to go in a direction of its own, and it seems gold likes doing that a lot.
At least for me...
So I've cut it out, not a gold digging bone in my body anymore.
There's money and more reasonable candles in other pairs 😂.
This is a response to the May Inleo Monthly Prompts posted by @leogrowth.
My experience in trading and forex.
You should check the prompts out if you don't know what to write and need some ideas...
Lovely prompts on here...
- Images used are mine
- Gifs are gotten from Canva
My Instagram page.
Posted Using InLeo Alpha