Forex Coaching Adventures
I was monitoring a forex coaching session from one of my coaches a couple of years ago and I heard the craziest story. I’m so grateful that I didn’t have to learn this lesson myself.
Wile I was listening, I heard the student relate what happened to him.
He said that he was trading on black Friday (day after thanksgiving) and he had an $11,000 live account. He was just scalping for 10-20 pips and only using a 15 pip stop loss, but he was trading with 7 standard lots (~$70/pip). He was caught unaware when the market closed for the weekend while he was still in the trade. He told how that was a very long weekend as he waited for the market to re-open on Sunday afternoon and get back in control of his trade.
Well the market did re-open, and he was sitting there watching in horror as he saw the market open, not at the price it was when it closed on Friday, but 170 pips away, IN THE WRONG DIRECTION. Because the market had gapped over his stop loss, the trade was still active. His available and used margin were eaten up in that instant devastating blow and his trade was automatically closed with a loss of $11,600. Leaving him with an account balance of -$600. He had done what he thought was impossible in forex and had lost more than he had in his account.
His broker called him up the next day and asked him to deposit enough to cover the debt.
He and I learned some valuable lessons from that experience:
- Even though I have stop losses in place, I need to be very careful when staying in trades over the weekend.
- I should always avoid trading around holidays with my live account.
- Scalping is not a sustainable or consistent way to trade, things can happen fast when your trading with more lots.
Some people think that laws are there to restrict us, but I know that my trading laws are in place to keep me trading safe.
Good luck in your trading and have an awesome day.
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Comments
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Crazy stuff! It’s amazing how costly a lack of knowledge can be. I lost $20k in Forex myself, but it was because I deposited it with a trader who was supposed to make me a return.
I know Forex is a viable way to invest money, but it should definitely only be done by pros.
I apologise, but, in my opinion, you commit an error. I can prove it. Write to me in PM, we will talk.