Realized and Unrealized Gains and Losses Definition & Examples

Noob trying to trade: An honest reflection on my performance after three weeks

So after three weeks trying to trade, I haven't blown my account yet.
On Feb 24 I started trading Forex with an account funded with €30. I know, I do not belong to those who put 10,000 into a forex account, as a noob, but to mee the learning curve and the ride feels the same.
On day one, I lost €4.17, the next days I made profits, so the P/L balance was + €0.8. Ok, I did not blow my account the first days. But then and unfortunately, I began trading just days before the EUUSD was on a jump from 1.09 to ~1.15. I sold EUUSD at 1.09042. With a lot more experience I could have avoided this trade. Even worse I did not realize a loss quickly, but carried the losses to this day.
Reddit experts said I should realize my loss, but I didn't want to. My account needed some more funding, so I added additionally €10, to avoid the liquidation of my position.
My available trading resources went into the red, mayking it impossible to trade. I am trading 1,000 units (EURUSD) with a 33.3% leverage. the margin reguirement is about the same at ~€33.30. I was basically locked out from trading since Feb 28.
Days later, when the uptrend was slowing down, I added another €40 (now total €120), enough to open a second position. The rationale was, I do not want to wait until, and if any maybe my losses disappear, but instead I believed that after such a strong week for the € there has to be some consolidation. I wanted to sell euros again, to work towards a quicker break even.
On March 9, after a week of being incapable to trade because of insufficient funds, I opened a new sell position. just to lose another €2.40 that day. Still, to me the charts looked like the euro would go down.
Fortunately, I did not realize my loss, when reddit experts suggested to do so at the hight of my loss (€-52.18). The last week was great. I made profit every day trading the 1 minute chart. Still I use a number of indicators, support and resistances, ranges and trends. So this week i realised a loss of €-2.40 and made profits of €13.79. Trading only a micro lot in with margin of €33.30, that's a 41,41% profit since Tuesday. So actually I am happy about that.
After three weeks, I did not blow my account. My unrealised loss is, as of now, down from max €-52.18 to €-18.49, (which is my poor man's profit) and I was able to have more profitable trades than losing trades.
I only traded Sell positions with the trend. Although my available trading resources would have allowed 2,000 units to trade since Wednesday, (+ the 1,000 units from Feb 28), I did not feel comfortable to trade the other direction, once I "figured out" how to trade "my pattern".
Date Avail. TR Total Margin Net Equity P/L (unreal.) Cash Realised Financing Funding
before €70 - €26.96 €33.~~ €70 to €59 €0.5 to€-21.17 €70 - €81.27 €-4.17 - €0.8
05.03.20 €17.95 €33,16 €51.11 €-30.27 €81.38 €0.11
06.03.20 €13.96 €33,08 €47.04 €-34.38 €81.42 €0.04
07.03.20 €1396 €33.08 €47.04 €-34.38 €81.42 saturday
08.03.20 €1396 €33.08 €47.04 €-34.38 €81.42 sunday
09.03.20 €-0.05 €66.92 €66.87 €-52.18 €119.05 €-2.40 €0.03 €40.00
10.03.20 €59.75 €32.65 €92.40 €-33.13 €125.53 €6.40 €0.08
11.03.20 €65.43 €33.08 €98.51 €-32.75 €131.26 €5.69 €0.04
12.03.20 €80.34 €33.30 €114.07 €-18.49 €132.56 € 1.70 ~€0.04
Now, when I look at my performance it looks great. However, I want to be honest with myself. At a second look, my trading day performance it's not that great anymore.
If I look at the first trade that turned from an unrealized loss of €-3.47 (from opening to day close) to a profit of €4.00.
Open Date Open Order Market Close P/L Close Order Close Date
09 Mar 15:53 [email protected] 1.14544 €4.00 [email protected] 10 Mar 2020 09:11
The EURUSD was at 1.14544. It's at the time of writing this post ~1.11117. ~304 pips since I traded on March 9. If I had just kept open that one position, I would have made ~€27 (€0.09 / pip). Trading daily, losing my mind and risking my money I made only €13.79.
Say, I feel more comfortable and trade the other direction, whatever that direction might be. I could have made maybe twice as much, which is still below what I could have made if I only kept the first postion in that series open and waited three days.
The conclusion after a week of somehow successful trading to me as a noob is that if i could identify atrend reversal that would last a few days, it really isn't worth trading for hours a day. you can have the same with less risk and less stress.
it may look very different in a range scenario. in a ranging week, i would have outperformed the euusd pair easily.
my net equity is only ~2% in the red (€117 from €120, was €47 from €80 at worst point). which is so much better than a few days ago and if i had realised the loss. what i learned this week is of great valuable too. so i am happy with the result, but i also have to say it was a bit of a useless endavour moneywise compared to the simple performance of the currency pair.
conclusion: mixed feelings about my performance as a forex noob.
submitted by forex_noob to Daytrading [link] [comments]

Trading Contest: Rules, Benchmarks and Prizes.

I've now arranged at least one backer for the trading contest to provide investment prizes. Some of the details of this may be subject to change. Last week my girlfriend went away on a trip and in the car she took was a bag with two of my phones and one laptop. So I've not yet discussed the finer points of this on the phone with the backer yet, just briefly exchanged some emails and have an agreement in principle. I'll be able to confirm Sunday/Monday when she's back.

Initial Funding Offer

Testing investment of $10,000. Scaling to full investment of $100,000. Further adding of funding up to $1 million.

Requirements

Meet a tier 3 trader benchmark.
Tier 3 traders have to be able to produce an average return of 3% a month and never exceed 10% drawdown.
Results need to be over 9 month - 12 months. The trading data needs to be made available for quant team analysis.

Account Requirements

Results have to be produced on live accounts, with a funding of $1,000 (or more).

If anyone is able to produce solid results but for some reason can not afford to fund this, I am willing to sponsor you for this, providing the seed capital (essentially investing in you). For me to do this, I'll need to see you producing solid results on a demo account for at least 3 - 6 months. If you can, I'll set up something to allow you access to live funds trading without self funding it.

Drawdown Rules

Drawdown will be tracked with professional metrics. This means we are tracking equity drawdown (not balance drawdown), and it mean we're tracking equity drawdown from high water mark.

This means if you open trades and they float against you, but later close profitably the drawdown in running trades is counted as losses. It also means if your trades go into profit and later close at a loss the percentage loss will be from the high in equity. So for example if you go up 2% in equity profit and close 1% loss, you lost 3%. 3% is your high water mark drawdown.

So it is essential you can both control your running equity losses, and efficiently cap losses on unrealised profits.

Markets

The backer is mainly from the Forex world, but also willing to provide backing for results from other markets. So people can trade where they know best.

(Note: For me funding you, I'll probably only be accepting Forex. Logistical reasons).

Toxic Tendencies

Results will be screened by quant team for 'toxic tendencies'. These are known weaknesses in strategies that mean they can produce short term results, but rarely are sustainable. The most common example of this is martingale. Toxic tendencies strategies will be rejected even if they produce good results. If there is any chance at all of them being considered 18 months or more of trading history will be required.

Fresh Accounts

For the purposes of this contest, all accounts will have to be new accounts tracking forward from the start date of the contest. Backtesting or previous forward testing will not be accepted.

Further Funding

The funding available can be further increased if tier 3 benchmarks are passed. Tier 3 is the lowest viable results, with funding usually capped under 5 million (most commonly 1 million). If traders can beat tier 3 results and match tier 2 or even tier 1 results, a lot more funding is available.
As a rule of thumb, tier 2 traders have minimum investments of 5 - 10 million. Tier 1 traders minimum investments of $100 million. I will discuss in more detail with people how to progress through these tiers if and when it is applicable.

Time Scale of Opportunity

This is open indefinitely. The backer will probably be quite happy to offer incentives like this for a long time (profitable traders are worth a lot of money to those who can fund them). Even if for some reason they decide to no longer offer funding, in a few years time I will be in a position where I can allocate large amounts of funds to profitable traders - so I will provide continuity of this offer.

My Benchmarks

As benchmarks, I will provide a few different strategies that I know are suitable for tier 3 trading. It has always been in my plan to provide some strategy write ups for these for people to learn them, and then have them running with ongoing results updates for people to see how they perform. So I will just push on with getting this set up, and then use these strategies as my entries into the contest and setting of tier 3 benchmarks.

Starting Date

ETA for this is probably in the next 3 weeks. This gives me a bit of time to do the strategy write ups and finalise details on funding requirements and scale up of investments. I will update on this when I have a more solid timeline.
submitted by whatthefx to TradingAlerts [link] [comments]

Journal entry - Deferred tax asset

Hi guys,
Brief background: In my country unrealised loss on forex denominated asset/liability considered non-deductible for tax purposes and it will be become deductible upon its actual settlement. Therefore it gives rise to DTA/DTL depending on situation. In 2014 year end, my company accountant recognized DTA (Dr:DTA, Cr: Deferred tax expense) on forex unrealised loss on our USD payable. Since we were in profit making position in 2014, we paid extra tax due to it was not deductible expense yet. However, in 2015 year end, unfortunately we are in loss making position and during 2015 we settled the liability which caused the unrealised loss in 2014. Now we are not sure how to reverse the DTA recognized in 2014 because the reversing journal entry cant be (Dr: Income tax expense, Cr; DTA) right? If we do this entry it would unreasonably decrease our retained earnings. In this loss making situation what is the correct accounting entry to reverse or write-down deferred tax assets? thank you A LOT.
submitted by Engvvn to Accounting [link] [comments]

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