Over the weekend, I had withdrawn my money from Moomoo and posted my margin in Interactive Brokers (IBKR).
Simultaneously, I had reviewed my recent trades and thought about how I can do better. The losing trades are still too small a sample set to invalidate my system. I shall continue to execute in accordance to my rules and review again when I have a larger pool of trades.
Besides a problem on trading permission for some futures (which I am checking with IBKR support), I am good to go.
Over the Lunar New Year festive period, I did a transaction cost analysis of my futures trades executed via the Moomoo trading platform.
I realized Moomoo was charging a platform fee of 1 USD per contract in a trade. For example, here is the breakdown of fees for buying 9 contracts of Micro AUD/USD Mar25 (M6AH5):
Commission = 8.91
Platform Fee = 9.00
Exchange Fee = 2.16
Regulatory Fee = 0.18
GST = 1.82
Total = 22.07 USD
This is actually quite expensive for a single leg. Hence, I have decided to switch to Interactive Brokers (IBKR).
The benefits of using IBKR are multi-fold. One advantage is that unlike Moomoo, there is no limitation on the futures contracts available for trading on the platform. This means I can trade the various CME Micro FX futures, which gives me a more refined exposure per trade.
IBKR is also lauded for its strengths by various authoritative websites. For example, Investopedia rated IBKR as one of the best platforms for trading futures. [article]
The third advantage is that IBKR offers a desktop trading platform, while Moomoo only offers a mobile app interface. The tiny font size in the app is challenging for me. I prefer to see things more clearly on a PC/laptop screen.
I am withdrawing my funds from Moomoo over the next few days. Meanwhile, I will complete the registration for an IBKR account and post my margin. This transition also gives me a needed pause in my trading, especially after experiencing the 13 percent drawdown.
I had been thinking about my recent short in Micro AUD/USD Mar25 (M6AH5). I had steadily added to my position as the Aussie dollar trended nicely lower.
Five days ago, the Washington Post reported that Trump’s aides were exploring a narrower tariff plan than expected. This caused the AUD to strengthen abruptly. Unfortunately, the price hit my stop and I was stopped out.
3-month price chart of Micro AUD/USD Mar25 (M6AH5). Source: Barchart
A profitable position had turned into a loss. While I was not feeling downright miserable, I was certainly dejected. This was especially since Donald Trump had refuted the report, and the AUD started its slide again.
Nonetheless, I have to put this loss in perspective – the article could have well been accurate, and the Aussie dollar continues its ascent in the alternate scenario. Had I not have the stop in place, I would have lost much more.
Unexpected twists can and do occur. It is par for the course when it comes to trading the market. Further, I had to reset my mind and start a fresh short position again as my system gave the SELL signal, which I dutifully complied (see grey text on chart).
So the lesson here is: always expect the unexpected, and manage your risk well.
I feel sorry for the investors who had lost their money. I’m not sure why they had trusted the scammers. Perhaps in the low interest rate environment, a forex trader who promises returns as high as 13 per cent seems too good an opportunity to pass over.
If those investors have tried trading themselves, they will realize the depth of the challenge. The reality is unlike the click-bait titles that we see on YouTube:
I have read how successful traders take years to hone their craft. I’m under no illusion that if I am to survive (and thrive), I will need to pay my dues too. Moreover, trading means dealing with probabilistic outcomes. Even when one has done everything right – right entry price with stop-loss, right position size, right timing – there is no guarantee of a sure-win.
There is a verse in Rudyard Kipling’s poem “If” that I find particularly meaningful:
If you can meet with Triumph and Disaster And treat those two impostors just the same;
Replace Triumph and Disaster with Wins and Losses, and the verse speaks to me of the ideal trader mindset:
If you can meet with Wins and Losses And treat those two impostors just the same;
When we have a winning trade, we feel happy. Proud even, that we have made the right call. But I argue this is not the right emotion. In fact, we should not have any emotion involved. It is better to bring our hearts back to a neutral state, so that we can focus on our trading process for the next trade.
Likewise, when we have a losing trade – or a streak of losing trades – we feel sad. Possibly angry. But it is not the right emotion either. It is better to let the feeling and raging hormones dissipate, so that we will be in the right frame of mind to execute our next trade with clarity.
The next trade should NOT be encumbered by the last winning/losing trade.
If we can face our wins and losses with subdued emotion and we acquire the mindset that wins and losses are nothing more than probability events in trading, we will become better (and profitable) traders over the long run.
SHORT CAD/USD Mar25 One 6CH5 contract sold at a price of 0.7072 One 6CH5 contract sold at a price of 0.70045 One 6CH5 contract sold at a price of 0.6962
As of 31 Dec 2024, these are my positions:
SHORT Micro AUD/USD Mar25 Seven M6AH5 contracts sold at a price of 0.6367 Eight M6AH5 contracts sold at a price of 0.6309 Seven M6AH5 contracts sold at a price of 0.6245
SHORT Micro EUR/USD Mar25 Four M6EH5 contracts sold at a price of 1.0384
SHORT Micro GBP/USD Mar25 Eight M6BH5 contracts sold at a price of 1.2487
SHORT 5-Year T-Note Mar25 One ZFH5 contract sold at a price of 106.140625
LONG Corn Mar25 One ZCH5 contract bought at a price of 454.50
Cash is at 93,840.49 USD. On a NAV basis, I am down 4.4 percent since inception.
Screenshot from my Moomoo trading app.
To be clear, this is not a sim account. This is real money deposited with the broker.
The choice of trading the micro versus the full contract was not intentional. My broker Moomoo supports trading in micro contract of only certain currencies.
Stop-Losses are imperative. When I put on a trade, I will always put in my stop-loss. I know exactly where I must walk away. The value of this rule was recently demonstrated when I shorted the Soybean Meal Jan25 (ZMF5) at 285.4. The trade was in the money initially. The price then staged a sharp V-shaped rebound. I was stopped out at 295. Were it not for the stop, I would have lost much more money as the price climbed higher.
3-month price chart of Soybean Meal Jan25 (ZMF5). Source: Barchart
On the other hand, I do not have a Target Price for each trade. There is no specific risk-to-reward ratio. My system does not tell me to take X dollars of risk for Y dollars of profit. As the open profit increases, I will scale my position, up to the allowable risk limit. The position is to be closed only when the trend reverses.
Did I forget to mention I am a trend follower?
Going into 2025, I will continue this patient and disciplined approach – trade only when there is an entry signal, trade only a risk-adjusted position size, and put in a stop-loss everytime.
I will review the performance again at the end of 2025.
The Mechanical Trader 