It’s been two weeks since I posted my last forex trading update and I think it’s time to go over some forex lessons learned. It seems that my trades are still not doing well.

All of the GBP positions are down (thanks Brexit).

Forex Trading Lesson Learned #1

I originally had not wanted too many of my open pairs to contain a common currency. I was worried that this would leave me vulnerable to sudden changes in one currency. It looks like this is what happened with GBP; four of my eight positions have GBP as one of the two currencies, which left me exposed to a switch in the GBP trend.

Forex Trading Lesson Learned #2

I am looking at monthly charts, which probably means I should be checking my positions less frequently. The theory is that monthly trends will have more day-to-day churn than daily or weekly trends. Moving forward, I will begin posting updates monthly.

Forex Trading Lesson Learned #3

My current positions are 10,000 units, which are fairly large trades. I can see that none of the bets I have made in the past month have gone my way (with the exception of USD/MXN) and I’ve lost about $2,300. In theory, these bets will still eventually make me a profit, but I will have to wait out the short-term variability in the position’s direction. In order to avoid losing too much money while I am waiting for trends to establish themselves, I think it is best to open smaller positions. I will begin opening new positions at 1,000 units instead of 10,000 units.

Forex Trading Lesson Learned #4

Sometimes there are no currency pairs trending. When this is the case, I assume that trend traders must either remove themselves from the market or lose money on open trades in the short term.

Moving Forward

I am going to restart my practice account this month and begin again by making smaller trades of 1,000 units each. I will also begin updating my status monthly instead of weekly.