I learned about the Forex market back in 2010. That year, my older brother signed up for online trading courses and told me a lot about online trading and people who made fortunes on this. Back then, I was not interested in the market, and I somehow had no thirst for easy money. All those terms like candlesticks and margin calls sounded to me like nothing special. But my brother attended classes systematically, watched video tutorials and tried to trade using demo accounts, and later with using a real account.
After finishing the program, the Academy opened a real account for each student with 100 USD deposit. According to my brother’s stories, half of his “colleagues” blew their deposits very quickly. Teachers said: “This is a typical mistake of all beginners; everyone goes through it. Time will pass, and you will learn how to manage risks, and money will start to flow into your pockets.”
Time passed and my brother's fervor somehow faded. He lost almost all his 100 USD and did not want to replenish the account. And so, his career as a trader ended.
A couple of years passed by, and the idea of easy profit crawled along the subcortex of my brain. In 2012, my friend told me that his friend is sitting at home and is making good money and paying his mortgage thanks to trading on the Forex exchange. He places a couple or three orders and earns easily 500 USD at a time.
I met the first person who really makes money on Forex. I got a fire in my heart. I started reading articles and watching video tutorials about strategies, online exchanges and how does Forex work as a whole. Tons of terms started to pour onto my head - margins, indicators, orders and more. But it was actually funny because I felt that this was the beginning of my career as a millionaire. I registered several demo accounts and began to master my trading skills.
Naturally, in the beginning, everything was not very clear, some arrows, graphs, and numbers. But, after a couple of weeks, I got used to it and felt like a fish in the water. There was only one thing, even with demo accounts, I did not see any profit. But an excuse was found quickly - with a demo account there is no risk and no fear.
It was time to switch to real money. I quickly reviewed the top lists of the best brokers and chose a suitable one. Finally, I deposited my first real 1000 USD and the trade began. All expectations came true, with real money, came also fear and a sense of responsibility.
But with real money, there came one more factor, the most dangerous and treacherous. This factor caused millions of people to lose everything in their lives. This factor destroys families and even takes away your lives. It was the excitement I felt from Forex trading, kind of gambling addiction. And no matter how much I think of myself as a person who is objective, sane and not subject to any addiction, I succumbed to the trading excitement.
All the perniciousness here lies in one simple thought: “I will invest now more money in this deal, and not only cover all previous losses but double the deposit.” This thought destroys all plans, strategies, and risk management techniques. Although I read many articles that tell us that it is necessary to develop a strategy and follow it strictly, I did not succeed.
As a result, like all newcomers, I lost my first investment sum. But, again, this was kind of expected, because this is a "common mistake." And since the mistake is common and standard, then I was moving along the beaten path to my enrichment and better life. I thought I just need to work on weak points.
But to continue practicing I needed more funds. So, I invested more money into my deposit. Well, why playing with 500 or 1,000 USD, I funded my account with 5,000 USD. I wanted to return those already lost and earn much more on top of that.
Yes, there were times when 5,000 USD turned into 6,000 USD and it was really pleasant and nice. But later they turned into 4,000 USD, then 3,000 USD and melted gradually from deal to deal.
Each time, it seemed that it was the main deal of my life and I should invest everything into it. It seemed this time the market would go in the right direction. But it always went in the opposite, taking the remnants of my second deposit.
How I got rich trading gold
As I said, my second deposit was coming to an end, and I decided to understand the reason of my adversity. And the reason was identified quite quickly - the wrong trading strategy. Like all novice traders, I traded haphazardly. Yes, I used some tactics, but, succumbing to the impatience and excitement, I forgot about everything and rushed after the rapidly changing charts.
Rapid market movements drove me crazy. Fearing to miss a big income, I rushed into deals. This behavior is already described in articles and is called: "Trying to catch the last train out of town." The fact that my behavior once again fit the classical definition of beginner mistakes only supported my thought that I would become a pro very soon and begin to make decent money.
After losing almost 6,000 USD, I decided to slow down a little. I switched to very small orders, tried to place orders strictly according to the selected strategy. Sometimes it worked out. Only now the profits were miserably small. I earned about 20 USD per deal. And such deals could last more than one day. I was upset by this situation. At such a pace it will not be possible to return lost money soon.
I decided to seek help from a friend, the one who, sitting at home, earned both for a mortgage and for a living. His answer was simple and clear: “You are trading the wrong pairs. Leave this EUR/USD and go after the gold - XAU/USD.” I added the gold chart into my terminal and began to glance at it from time to time. The figures were very beautiful there, and the volatility brought hope for a quick and big profit.
After a couple of weeks, I was ready to start trading gold. It seemed that account balance has ceased to melt, and I have somehow begun to control my feelings. I added another 3,000 USD to my account. I closed a couple of successful deals that gave me 300 USD each. I liked the fact that gold really lends itself well to analysis, especially well it worked out with strong trends. However, strong trends came up no more than once a month, and I wanted to trade every day. I tried to control myself and waited for juicy deals.
Sad, but not everything depends on us. After some time, I noticed that gold does not always work out long and strong trends. Sometimes it simply breaks them and goes to my stop-loss, taking away the money. Getting obsessed with misfortune, I rushed to place opposite orders but this, as you know, is a bad practice and I lost all money again.
How the trading robot helped me to lose my money one more time
After that, I decided to stop trading completely. But, after several months without Forex, my hands began to itch a little. By that time, the resentment caused by losses went away. Those profitable deals I had before and large candles on the gold chart did not want to give me any rest. After all, there were many successful deals, and they were carried out based on specific strategy - when all the actions were clearly planned, and orders were placed only if there were good signals.
But again, what was the reason for my losses? All the discussion boards and books repeat the same thing: “The market does not forgive mistakes. 90% of traders bankrupt because they trade haphazardly.”
But how do I learn to be cold-blooded? How to stop succumbing to constant temptations and trade strictly according to plan? The answer came as an insight - you need to create a robot. After all, robots are cold-blooded machines that could, without panic, objectively assess any specific situation on the market.
Almost all modern terminals have built-in programming languages, and I, having some programming skills wrote myself an assistant. It would study the market, looking for a number of factors, and tell me whether to place an order or not.
The robot was written fairly quickly. I will not go into the details, but it evaluated the chart at different periods and highlighted interesting points to place orders. The initial test was very successful. Yes, there were many mistakes, but there were more than 70% of correct decisions.
In the process of writing the robot, I noticed another important fact - robots can work around the clock. So, I decided to entrust it with all the trade. I supplemented it with the function to place orders and began further testing. The results struck me. Income amounted to 1000% of the initial deposit within a month. Yes, I tested based on previous chart history but I did it over a long period and so the results gave place to some confidence. I decided to launch the robot in real-time on the test account.
A couple of weeks of real-time tests showed nothing. The profit was just zero, but at the same time, there were no losses. I found the excuse very quickly - the market is sluggish right now. The market was indeed slow during that period.
I did not want to miss all the traffic with this demo account, added funds and launched the robot on the real account. I programmed it to place only minimal orders. It worked for about a month.
However, the market behavior was new and different from the history charts I used to train and test my robot. Although, all the books point out the golden rule of trading: "The history repeats itself," this time it did not repeat. The robot traded, placed orders, but I did not see any profits.
Probably, the phrase: "You lost it for the third time " is now expected. Well, I allowed the robot to spent only half of the money, then cut off its wires. There were some 2,500 USD left on the account.
Meanwhile, gold was approaching a very strong line. Gambling feelings suddenly prevailed and I decided to cover all the losses with a serious of deals. I placed several orders and began to wait. Orders, by the way, worked out very well. I ended up with a profit. My balance reached 5,000 dollars. But I did not stop there (another mistake), I began, as they say to: “Milk the market to the last drop”. The market milked me faster.
The third deposit was lost. And the mistakes were still the same - giving in to the feelings and moving away from the initial plan. Although sometimes history simply did not repeat itself, and the market ignored all the rules and went its own way.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.