Already four weeks have passed after the experiment participants started to trade in the Forex market. The middle of the experiment has been reached and the participants still have their initial investments that allow them to trade in the currency markets. However, the participant X has been smashed by the Forex market. This week, market trend has not changed, so the participant X lost 88.55% of his 200 EUR initial investment and has to continue the experiment with only 22.9 EUR. Actually, he has been lucky for that long.
Let review this week’s results:
1) Participant Y performed much better. His initial investment has increased 35.15% from 247.6 EUR to 334.64 EUR. It is more than impressive growth. Participant’s trading leverage varied from 0.01 to 0.1. Can we say that this experiment participant has already found the formula for success, which helps to execute successful trades in the Forex market? During the week, this participant conducted 17 trades of which fifteen were successful. We believe that it is still too early to enjoy profits from this successful trading strategy. Although, the participant Y feels very elaborate, but he should remember that a few unsuccessful trades can “help” to lose his initial investment.
2) The phrase that can be dedicated to the participant X - “do not be greedy, if you do not completely understand what you are doing.” The second huge trading failure, when excessive leverage has been used recorded a 109.12 EUR loss for participant X. He had no choice but to reduce his trading leverage to 0.01. Although, this week he executed 8 successful trades, the available investment is only 22.90 EUR. His mission now is to finish the experiment with at least a small part of his initial investment. Motivation has almost disappeared. But that’s how Forex works – attracts with possibility to earn big profit and then quickly punishes.
3) Both participants still do not use “stop loss” tool. If the trend changes very fast it can “help” to very quickly lose initial investment. On the one hand, if the market trend does not change, but only lightly moves the exchange rate, it may help to earn profit. However, one unsuccessful trade can blow up your trading account.
Participants began the 5th week of the experiment with new trades, profits and losses. To Be Continued…