The TraderInterviews.com Show for June 26, 2008: Trader Profile: Wayne McDonnell

Fantastic interview with Wayne McDonnell about how he trades the currency markets, how he finds opportunities each day, and the various timeframes he uses for confirmation that it's time to execute. We also discuss why he sets goals in terms of "pips" rather than dollars or percentage gain. A good interview for traders of any market, but especially forex. Find out more about Wayne and his methodology at FXBootcamp.com.


The TraderInterviews.com Show for June 26, 2008: Trader Profile: Wayne McDonnell

April 2008 King of the Mini Contest - DailyFX Forum

People are doing it, it can be done

Each month over $4,000 will be awarded to the top 5 mini account holders with the highest percentage gain. This is NOT a demo contest — this is a live trading competition open to all live mini account holders. At the beginning of each month, the slate is wiped clean and traders have a new opportunity to win the monthly prizes.


April 2008 King of the Mini Contest - DailyFX Forum

Demo trading for now

I am going to demo trade for a couple of weeks now.

I need to refine my trading plan. Though I think you can learn things about trading a real account that you can never learn from trading a demo account, dealing emotions, I need more grounding in the fundementals.

At this point, here is what I believe is the process that a new forex trader should go through on his journey with respect to trading from demo to live.

first, trade demo only until you can show consistency over some reasonable period of time

Second, once you have show consistency over some reasonable period of time, switch to a low balanced mini or even micro account. I believe that there simply are things you just cant learn trading a demo account. It has been revealed to me that one of the largest factors in trading success is dealing with emotions. You simply arent going to have the same emotional investment and thus not have to learn to master your emotions with a demo account as you would with a real live trading account.

What is a "reasonable period of time"? I think this would change from trader to trader depending on what you are comfortable with. This is where self knowledge and self honesty become the key. I would think that it would be a minimum of two weeks at the very least.

Third, it is only when you have shown consistency over a reasonable period of time that you should increase the balance of your mini account or switch to a non mini or standard account.

I also believe that at any given time if you experience a major set back you should rachet it down. For example if you blow through your mini account go back to demo and start the process over again, trying to learn from your mistakes.

spastic monkey trading

Yes, this is my current trading style and guess what, I lose money when I do it.

I lost money last night. Over the last two nights I have lost 300$. Yes, as the blog says, I am a bad trader. I am bad right now but I am willing to do what it takes to get better.

Its not that I dont start out with a plan, but when I sit infront of the computer looking at the screen, I am just too tempted to trade. I think thats why I had such good luck last week. I would create order entries at obvious points of support or resistance then go to bed. Sure there was big draw down at some point over the night but the trend would continue and by the time I woke up at 6am, I was positive for the evening. I saw this 4 nights in a row. I thought I was a genius. I was even thinking about what the lifestyle of having a second home in Asheville, quiting my job and making a living trading from my home in the mountains. Wow what crap.

Actually, I shouldnt shoot that down, it is possible but one good week doesnt equal great trader.

This is going to be a journey and I am seeing that the biggest part of this journey is an emotional one. I am also seeing that creating a trading plan or system isnt just about chart patterns but something that takes my emotions into account like, I cant enter orders on the fly. I actually shouldnt be sitting here staring at the screen while I trade, at all if I cant control myself.

Like this monkey trade where I lost about 138$ in about 17 minutes



I was trading by the seat of my pants. I closed out the position I had earlier at a random place in time, and then created a new one at some point that I thought was a good entry point. I probably spent a grand total of maybe 2 minutes arriving at this decision. Its trading on 100% emotions, the exact opposite of what you should be doing when you trade. When you trade like this you are not thinking at all about things like profit targets, where to set stops or god forbid, expectancy

my euro trade

Euro Setup Sunday Night 6-15-2008
My basic trading system is this.
I look at a 15 minut charts, I see clear levels of support and resistance the chart. I think createorder entries just past those levels, taking into account the possible widest spread for that pair
For expample, The possible widest spred for the usd/jpy is wider than the possible spread onthe euro/usd.
I create order entries, add an alert that will be sent to my phone is this entry is reached, then I go to bed.
if the alert is triggered, I should wakeup and check on the purchase. This way, I am only buyingwhen a clear trend in either direction is established by a point where the rate breaks through a point of support or resistance.
I like the 15 minute chart for this at a minimum. I tried the 5 minute chart and thatreally hasnt worked for me.


Thats it, thats my system right now , thats my trading plan.


Now in the case of the Euro/usd, I have create entries to buy at 1.54148 and sell at 1.52976


Ok, I woke up at 3:15 checked my position and panicked. I closed my euro position.



Then I went back to bed. Here is what I saw when I woke up at 6:45


My "take away" from this is that, I might have been right when I picked the correct resistance point. you can see how once broken through, the point of resistance becomes a point of support, to say nothing of the money I lost by closing the position early.

And again, it reinforces by desire to not have stops, and let my position ride to the next morning, I guess playing out the london session.

To stop or NOT to stop, that is the question

another nice pop last night I made 400$ trading both the euro/usd and the usd/cad.

I think I am developing a system and starting to see what is working and what is NOT.

I set entries for both the usd/cad and euro/usd then let it ride.

I have found that ... inspecting the chart using a 15 minute interval, looking for obvious points of strong support of resistance. I then set an entry point where if that point is hit, a position is opened in the direct of the trend.

I have also been trading without stops, which I know is bad but honestly, I have been consistantly losing money where I pick the trend right but got stopped out in a short term correction.

This is a BIG one here. Obviously I dont want to trade without stops. That is just too risky. It seems I need to have some capital protection and trading without stops is just plain dumb... but ... I am making money.

Unfortunately, I have been consistently losing money when I trade with a stop and making money when I trade without a stop.