Currency trading 102 – the phantom trade
Here’s an update on my progress. Since my last report, I managed to crash my PC. While installing Linux, for a totally different reason, I lost Windows Vista and had to rebuild.
My recovery exposed some weaknesses in my file backup scheme, and I ended up losing my old emails and email addresses – that’s all I’m aware of after a frantic 2-3 days of rebuilding.
Except for that, I believe I’m actually better off. The point is, I lost my connection to FXCM.com, the broker I’d had a practice account with, and their website isn’t friendly to existing practice customers – even though I had my sign-on information, I couldn’t find how to get on and I didn’t remember it. I had been relying on my email conversation with them for that information, but now it was gone. Not wanting to re-register, I set up a practice account with another broker, FOREX.com. I duly received another $50,000 in imaginary money.
I found FOREX’s trading interface to be bare bones, nowhere as good as FXCM’s. FOREX offers a better package, but it costs money, so I didn’t get it. Perhaps the simpler interface was good for me, because it is easy to learn and forces you to master the basics.
This highlights a basic idea about currency trading. It’s not for paupers. You’d better be in a category Obama cares about taxing, which I’m not. But, enough of that.
A couple of days ago, I made my first two practice trades – little baby steps with FOREX.com. A good start: I made $30, then $50. Whammo, balance was $50,080. Yesterday, I noted a downward trend on the Euro/dollar pair, sold $200,000 worth to set up a short position, and set a stop limit 20 pips higher. Naturally, the price began moving up, and quickly reached my stop, and automatically bought to pay back the broker. I lost $204. Now, my balance was $49,876. Bummer.
I had other stuff to do, but checked the market again a couple of times. The point is, late yesterday afternoon, I looked in, and the interface told me I had over $500 in unrealized profit.
I discovered I had a long position, based on a buy of $100,000, and it was over 50 pips ahead! Evidently, I had not placed a limit (profit taking) order, so it just kept climbing. The problem is, I don’t remember making the buy. For someone my age, this is a bit scary. I may have, as I was working on other stuff I may have bought and walked away for a bit. I almost remember doing that – I know I walked away at one point to get a cup of coffee, but then got a call or something, and never got back until the interface had timed out. So, when I discovered the position hours later, I cashed in, and my balance is now a bit over $50,400, but the phantom trade is a worry. The FOREX interface is so bad I can’t find a way to go back and look at closed trades – no history.
So, is dementia about to get me? Has it already done? Stay tuned.