Welcome to the fourth part of my trading blog, in which I detail my quest to become an FTMO prop firm forex trader with a 6 figure account. You can check out the previous installment of my journey here, or check the very first entry for the background and strategy. A quick recap: I’m testing my strategy against the 14-day FTMO free trial.
Day 2 of trading could have been better, but it was overall a success. Even though I didn’t quite hit my profit target for the day, I’m still on track overall.
This is a good opportunity to remember that the time constraints on an FTMO challenge are not as rigid as the loss limits. You won’t necessarily kiss your fee goodbye if you didn’t hit the profit target in 30 days. That’s because:
- You can get a free retake if you’ve respected the trading objectives and you come to the end of the challenge with the account in profit.
- If you haven’t breached any of the trading objectives and your account is up by 5% towards the end of the challenge, there is the possibility of a 14-day extension.
When you think about it, it’s actually pretty generous. If you’re not just profitable but consistent and patient, there’s definitely a bit of leeway to help you.
Anyway, on we go with the trading blog and the matter at hand:
Trading blog #4 – trading day 3
Part 1
I’ve made a small gain from buy trades since the opening of the London session. At the time of writing, I have a couple of positions open. Gold is pretty bearish at the moment, having fallen below $1800 for the first time since mid-May. If today isn’t profitable for me, it’s going to show how difficult it can be to trade against a trend.
There is very high impact news coming up this month, with the minutes of the FOMC meeting due on Wednesday. That’s only 6 six days away. My theory – or hope at the moment, at least – is that any hawkish sentiment surrounding it has already been priced in.
As for the technical side, I start to see what looks like an RSI divergence on the M15 chart. Lower lows in terms of price, but the formation of a higher high on the RSI indicator.
Today could be the day that I put the “swing” element of my account into effect. On the other hand, I don’t really want to walk away from my daily goal if it’s there for the taking.
Part 2
This divergence played out exactly as I’d hoped, and I secured my goal for the day. I thought about setting one trade to breakeven and seeing how it unfolds but decided against it. I still think gold could drop a little further. As I said in my previous post, actual profit is always better than “maybe” profit.
Part 3
As I anticipated, the price did fall further – right the way down to $1784. In hindsight, I regret not testing this theory by taking a position, but of course, hindsight is 20-20, and with the divergence in mind, I don’t feel too bad about it.
I went long at $1787 and pulled out at just over $1795. This resulted in a nice $786 gain. Obviously, this could have been a lot more, as the price did touch $1807-$1808. Nevertheless, I stuck to my principle of taking money when I see it. As I’ve said before, “could have beens” don’t add to my account’s equity by a single cent.
Here’s a screenshot of XAUUSD on the 15 minute chart with how that divergence played out. Note the bullish candle shortly before noon. It almost completely engulfs the bearish one before it. Congratulations if you managed to take advantage of this setup too.
Overview
The end of trading day 3 and the last day of the trading week resulted in a 0.9% increase of my original account balance, which was pretty much exactly on target for the day. I finish the week with a $3,809.18 gain in total.
The FTMO challenge itself lasts 30 calendar days. However, a good amount of those days are Saturdays and Sundays, so realistically, you actually only have 20 days to trade. So obviously, as for my FTMO free trial, I actually only have 7 days for trading left.
I have to say, things do look a little “too good to be true” at this stage. This is the first time I have ever attempted anything with the prop firm FTMO and I do not expect to pass this exercise on my first attempt. To be honest, I would question the value of it if I do, because I believe the biggest learning opportunities come through failure.
That’s not to say that I don’t expect to hit losses. I fully expect to do so. I’m acutely aware of the fact that it would only take one or two failed setups to wipe out the gains I’ve made.
Lessons learned
When I put it like that, I’m really struck by:
- How important it is that your trades have a decent risk-to-reward ratio.
- How important it is to let them run their course, so you actually secure your gains from them. That’s because you need these gains to keep your account in long-term profit for the times when you hit a loss or two. It could be that I have to be a bit less reactive when it comes to closing trades and securing profit, and let them run a bit more instead. We shall see. If there’s one thing I really wish I did differently, it would have been a bigger lot size on my last long position. The RSI divergence and engulfing candle formed a good confluence.
Even if I pass the free trial, I think I’ll repeat it before paying for a real account. After all, the FTMO Challenge and Verification can last a maximum of three months. However, the free trial is just two weeks. There’s also the fact that the Verification phase requires you to prove that passing the Challenge wasn’t just a fluke, so why not prove that passing the free trial wasn’t a fluke either? That seems like the logical thing to do before forking out hard-earned cash for a real challenge.
Well, that about wraps up my trading blog for the week. This is a nice note to finish on for the weekend – I hope you have a great one.