What I've learnt so far

Hello traders,

I want to share with you my experiences as a beginner trader. I’ve been trading on live for 2 months with a very small account, before that I didn’t spend much time on demo, but I did diligently study the babypips school and made some practice EAs before starting. I am by no means experienced or even intermediate yet, but I have learnt some lessons and maybe by sharing them other beginning traders might come to new insights:

[B]EA Robots[/B]

When I made the move to get into forex I was convinced that I could build an EA robot that would trade and make profit for me. In the first few months I spent my time learning to program in mql4, building robots, and testing them in the strategy tester. I learnt the following:

1 - The robots do marginally well, at best, and that is after a lot of tweaking
2 - Because so much tweaking is required, I believe it is impossible to make one that will work out of the box for multiple currency pairs
3 - Even if you get a robot doing well for you, it doesn’t mean it will make profit forever, you need to monitor and tweak it continually

So as you can imagine, I eventually gave up trying to program a robot. But I do not regret this period of my trading career: I’ve learnt the basics of mql4 and now I sometimes apply that knowledge to make simple indicators or scripts for myself.

[B]Trading isn’t easy[/B]

Just because of the fact that everyone has internet and that there are hundreds of brokers, doesn’t mean that forex is for everyone. It wouldn’t surprise me if most successful forex traders are well educated, but more often than not people who maybe aren’t suited to be traders are trapped thinking “That looks easy.”

I figured this out shortly after I stopped trying to make a robot. Although I quit trying to program the perfect machine I was still looking for the ‘set it and forget it’ holy grail. I was looking for the perfect combination of indicators that would give me great entry points frequently. I never traded live with any of these systems but I did backtest a few, but I quickly learnt that there was no guaranteed way to deal with whipsaws and incorrect signals.

I came to the conclusion that trading isn’t something that you can do mindlessly. But I think if you can think logically you could do alright.

[B]Don’t worry if you miss a trade opportunity[/B]

In the beginning I was anxious to continually have trades open and I hated it when I saw big moves on the chart that I missed. Sometimes I would join trying to get a piece of the action but this was often a mistake. It took me a while, but I have now made peace with the fact that that missed opportunity isn’t the last.

[I]Forex will continue to exist for the foreseeable future, and more opportunities will come.[/I]

The above has made a huge impact on my success, because I now am calm enough to not try to force setups when things don’t quite line up like I would like them to. I am now happy with not having a trade position open at all times, instead I simply try to find 1-3 good setups per week and try to make steady progress with almost guaranteed trades.

Furthermore, at the start I hated the higher time frames because I considered them so slow with few opportunities. With my new found patience I’ve come to really appreciate the 1D and 1W charts for how clean they are. I use the 4H a bit, but the trends are so much easier to see on the higher time frames, in my opinion.

[B]The mystical ‘newbies always blow their first account’[/B]

So far I’ve been successful without blowing an account. I’ve even made 29% profit since I started live, but to be honest some trades were luck. I am still a beginner and am still learning trading psychology, but who knows, I might still succumb to poor trading behavior and end up blowing an account. But I think the ‘newbies always blow their first account’ is a bit of an overstatement. This goes back to what I wrote above about trading not being easy. Trading isn’t made for everyone, but I think anyone who is sufficiently educated to be able to think logically is capable of conducting proper technical and/or fundamental analysis and can be successful rather quickly.

I define ‘successful’ rather loosely. I’ve been successful, but in retrospect I could have easily milked more out of most of the trades that I took. I don’t care about that. I’m not looking to make millions, as long as my account is moving in the right direction its all good. So although trading with proper knowledge could be considered easy, you need to see it like an other endeavor: lots of people can play tennis well, but they won’t be as good as Roger Federer any day soon (or ever).

[B]There is always more to learn[/B]

Again, after only 2 months of trading there is still clearly a lot for me to learn. I see it as a process which you slowly improve in. My trading method is price action without indicators. I’ve found good setups so far but there is plenty for me to learn, for example: being able to identify and become more aware of support and resistance levels; not closing trades to early because of fear that it’ll reverse even though the setup is good; and journaling my trade and progress better.

It’s a lot to read, but if anyone found the above insightful that makes me happy.

Kluebirby

Thanks for article - i think if you have a lot of experience - you can share more Tips (or even Tricks) to community.