In case you’ve forgotten about it. The “insanity trade” is still very much alive. So much so in fact, that I want to (not only bring you up to speed) – but also introduce……..Insanity Trade 2!
Not much different from the original “insanity trade” we’re talking about EUR/NZD this time.
Ok. Wrapping your head around the “reasoning” or the “fundamentals” behind these trades is a stretch for even the most experienced of traders. Pitting the Euro against AUD and now NZD? What the hell? Why? How? What could you possibly be thinking about “fundamentally” to consider such a bizarre trade / pairing? Now?
I’m not going to tell you.
These are the Insanity Trades remember! You need to be insane to take them, and possibly insane to understand them!
I am placing an order long EUR/NZD a full 100 pips above the current price action – my order to buy is at : 1.6260
The current insanity trade is currently sitting EXACTLY BREAK EVEN at 1.43 ( what? you think I sold / freaked on the Fed? Hell no! ) – It’s an insanity trade.
That’s it. Do not try this at home.
I like it, I’m also liking upcoming NZD weakness against the GBP and my fave, the CAD.
I apologize for the very lengthy post in advance. I have a million different thoughts going through my head right now, so if this is really disorganized please bear with me. Spending too much time on forums & using media outlets as a research tool has turned my brain into mush. Your site is one of very few that actually provide beneficial information & make for interesting discussions.
In 14 months of trading, I suffered my worst month to date this September and it’s only halfway through. The only strategy that has consistently worked for me throughout this time period is to trade maximum units on a single trade at 10:1 leverage. On most pairs this meant that it took 500 pips to get margin called(50% equity lost), while gaining 1% for every 10 pips. I know it’s not efficient and more often than not your money will be in limbo, but it allowed a huge margin for error and that is why it worked for me. If a trade went against me, I just had to be patient or take a relatively small loss in comparison to what I could have lost if the trade became very lengthy. Up until this month when it finally collapsed and I finally suffered my first margin call using it, it has provided me with double digit monthly returns over a 1yr+ timeframe. Not that long ago I asked if you could write an article specifically on money management and I would appreciate if you could do that in-depth. For example, if you have a $10,000 account, what is the most amount of margin you use at any given time, what is your exact unit sizing etc?
I come from a poker background and have always read that this is a great tool for transitioning into forex because of how much they have in common. I’ve had a lot of success playing poker and quitting it was definitely a huge mistake. In the beginning, I definitely got sh*t on for a while and had to pay my dues before becoming profitable, but the learning curve is so insignificant compared to forex. It took me about 6 months before I became good enough to play for a living, but after 14 months of forex I still don’t know what I’m doing. Playing online poker, I’ve ran up $40 to $2k+ in 2 days and $5 or $10 to $500+ in less than a week at least 5 times. My most recent incredible run was playing live at the casino in which I ran a $200 roll to $30k in 2 months playing almost everyday. In no way did I Intend for that to come across as bragging and I’m not sure exactly how to get my next point across. I know these returns are unrealistic and unsustainable, but as a valid example a $30 hourly is very much sustainable using a $10,000 bankroll to play live at the casino, so why is it that something like a 25% averaged monthly return in forex is considered unsustainable? Look at the numbers:
$10,000 poker bankroll. 200hrs/ month @$30/hr=$6,000 monthly/60% return
$10,000 forex bankroll. 25%/$2500 month=”lol you are delusional”, “unsustainable”, “unrealistic”
That $30/hr figure was actually conservative and in no way unrealistic. Perhaps I really just need to return to my roots and give up this whole trading thing.
I am curious why your returns for this year are only 96% and last year’s was 112%. Before you take that last sentence out of context, obviously these numbers are incredibly impressive and even more so if your drawdown is very low. I am also in no place to say such words, given that I am not a profitable trader, but I say it because I believe you are capable of much higher returns. Do you just keep a highly conservative approach because your primary focus is keeping drawdown extremely low?
Didn’t mean to give you a wall of text. I’ll stop there. Look forward to hearing your response. Thanks.
He he he interesting / small world man….
I’m responsible for the online marketing of a couple of the largest online poker / casino websites on the planet, having spent some 7 years in Costa Rica / Carribean deep in the industry. Back in ’99 a couple of us moved out to St Kitts and more or less “invented” online gaming.
I’ve worked with many, many professional poker players who have also suggested / made mention of the “mathamatical similarities / money managment rules” of trading and poker.
If you choose to sit and “grind” at online poker with the math you’ve outlined sure…..it “can” be done. The small element of your equation thats missing when applying it to forex is:
1. frequency of trade – in poker it’s endless/rapid as every hand presents opportunity, in forex these “hands” play out far less regularily.
2. Bankroll – in poker sure 10k is 10k, but the structure of forex markets have it that 10k “in your account” only allows for “x” amount of risk per trade in order to maintain proper money management. Perhaps with 100k in your account your equation looks better.
I can go on n on…but have to run. Ill get back to you with more.
Hope it goes well kong, I’m in for a bit of insanity, if that’s what it really is??????
Watch it go!
He he……and as for the insanity part……consider this.
These pairs can easily move “several hundred pips” in a single 24H session and literally “1000 pips in a week”. If a “newbie trader” thought “hey – this Kong clown is doin it…I’m in too!” and bought a a single full lot ( 10 mini’s ) with a 10k account – he could essentially be wiped clean in less than a week.
It’s insanity in ever sense of the word.
Kong in song: Free Ride/Edgar Winter Group
too cool man…..
I hope everyone here has a listen!