Funded Trading Blog #7: Day 7 – I can’t believe I did this

Welcome to the seventh edition of the trading blog, in which I journal my quest to become a 6-figure funded prop firm trader. Here’s a link to the first post which details the background. I’m starting at the earliest possible stage of this journey, with a 14-day FTMO Free Trial. In this two-week trial, there are basically only 10 days on which it’s possible to trade. This installment covers the seventh day on which I traded, but the penultimate overall trading day. The free trial comes to an end tomorrow.

My fourth day of trading saw two pretty big setbacks which resulted in not only the loss of the profits I’d built up, but also, just over a 2% drawdown into the starting balance. However, I did manage to recover nearly half of this loss on my fifth trading day with a position on the Dow Jones. Day 6 also produced a small gain.

Trading blog #7

The positions I had on the Dow Jones, which ran into the weekend at a loss, actually turned around in my favor. The first one closed at its profit point, and I closed the other two myself. In total, this was a $1600 gain and left me just a few hundred dollars away from bringing the account back to the starting balance. Obviously, meeting the profit target was out of the question, due to the lack of time, so my goal was to finish the trial in profit. This should always be a secondary target on an FTMO Challenge because as long as you haven’t breached any of the other rules, finishing the Challenge with at least some profit leaves you eligible for a free repeat or even an extension.

Further trades

I went long on gold risking 0.5% of the starting account balance. The trade had a risk-to-reward ratio of over 1:4.

Unfortunately, this stopped out. However, my setup was still valid for me and I reentered, with the same tight stop loss, a similar mid-1740s target, and ultimately, a similar RR.

And it worked!

I manually closed the trade at $1740 with a gain of $1512. However, the price did go as high as $1744 and came extremely close to my take profit.

Now, obviously, I know that I closed the trade early, effectively altering my RR. But as it brought my account balance back into profit right at the end of the trial, I saw no excuse not to do so. Of course, if this was a real, paid evaluation, then finishing it at a loss would’ve forfeited my fee, but closing the trade as I did would have secured it.

Summing it up

I’m thrilled with how this worked out. I have to say, I didn’t see myself coming back to the trading blog with these results. That’s mainly because I struggled to find the motivation to try. I guess it would’ve been different on a real account though, knowing that my fee would’ve been at stake. In all honesty, I had no expectations. The whole process was pretty unremarkable. This was probably the perfect emotional frame of mind in which to trade. No heightened emotions in the expectations of gains or the anxiety of losses. I guess I understand what some traders mean when they said that if you’re doing it right, trading is boring.

Strategy review

I’m also really pleased that I fulfilled another goal, which was to hold trades for longer and thus secure a better risk-to-reward ratio. Even the final trade that I closed in profit results in a RR of 1:1.5. This RR means that I could be right only 50% of the time, and I’d still make money. If I placed five trades a week, one trade each day, I could be wrong for three of those days, and even with just two wins, I’d still break even. I’m also really pleased with the risk management of the trade which failed. I wanted to risk just 0.5% of the starting balance ($1,000). With a loss of $981, I calculated that risk pretty much perfectly.

Another thing that today has shown me is the potential fallout of closing successful trades too early. If you’re not careful, there is the possibility of sabotaging your average RR. As time goes by, this means that you are constantly risking more than you stand to gain. This may very well be a recipe for disaster.

Today was the success that I honestly did not expect to achieve. I don’t think I will trade tomorrow. Instead, I’ll let the trial come to its end. For the reasons mentioned above, I certainly wouldn’t be risking the chance for a free retake.