From now on, experiment participants get the entire freedom to carry out trades in the foreign exchange market. Each participant has initial investment of 200EUR, which they will use for the following eight weeks. Trading is carried out at two different brokers IronFX and InstaForex. First, novice traders must open real trading accounts. Participant Y faced some difficulties when tried to open a trading account at InstaForex. His documents have not been approved several times and this issue slightly pushed forward the opening date. Dissatisfaction and stress has been caused by the communication process when necessary information has not been given explicitly. Already then, participant Y had thoughts to choose another broker, maybe even IronFX, knowing the fact that participant X didn’t have any problems regarding this platform. Perhaps in the future participants will have to deal with other issues that can directly affect trades in the currency market or even have negative effects on investments. Therefore, participant Y decided to open a trading account at IronFX broker.
We are excited to present the review of the first trading week with real money. Participant Y did not have any trades, and affirmed that he hasn’t been ready to enter the real market yet. Therefore, participant Y for trading used only the demo platform. As it was mentioned before, psychology is one of the key determinants for successful trading. If you feel unprepared, then there are no doubts that you shouldn’t start real trades in the currency market. It is better not to have return on investment, than to have a loss. Meanwhile, the participant X had 12 commercial transactions. The investment portfolio grew by more than 25%. Although 11 of them were profitable, and it has been the main stimulus to trade so actively, we can define a number of negative signals, which you should avoid when you trade in Forex market:
1) The participant X has used excessive leverages (one pip changed investment account by $1) which caused the huge risk (drawdown more than 60% on invested capital).
2) Several times trades have been made only by intuitive guesses. This is reminiscent of the chaotic trading, which, however has been very profitable.
3) Two trades haven’t been closed yet, still hoping that the EURUSD and GBPUSD exchange rate curves will rise up.
These observations should be considered by both participants (especially by the participant X). New trading week with new trades is coming, and we wonder whether the participants will be able to sustain their investments, increase, or even have a loss?