I started trading back in November 2013. Maybe a little before. I still consider myself a beginner, but am taking the steps towards Beginner+. Hopefully this helps others. I know recording some of this information and reflecting helps me on my journey.
1. Beware of Binary Options
I first discovered Binary Options as a quick way to make money. This was actually my first entrypoint into Forex. Earn up to 90% profit in 60 seconds. Amazing. I found things like the 5 Point Decimal Trading System as ways to make thousands quickly. Using this âsystemâ I blew my first $300 account in a matter of 2 nights. Some system, eh? What could have gone wrong?
Unfortunately the odds were stacked against me with Binaries. Not only was I on the hook for where that particular pair was headed, I had to figure out where it was headed within a specific time frame. I started applying Stochastics and RSI indicators to charts looking for the Holy Grail. It worked sometimes, not other times. I came out to about 50% ITM (in the money), which isnât enough to break even. Next up, more complex strategies. I chained indicators together to figure out the science behind predictions. Signed up for a signal service or two. Nothing really worked.
I still trade some binaries using a simple support / resistance and price action and occasionally the Center of Gravity indicator.
2. Donât Trust Indicators
Indicators alone wonât do anything for you. I purchased add-on indicators for Tradingview that I thought would help in my trades. Some of them were marginally helpful. Others turned out to be completely wrong. Others I couldnât (and still donât) understand. How am I supposed to tell price is bouncing off of or between 5 different colored lines or if a particular oscillator will flatten out in an oversold condition instead of oscillating back up (which is what they are supposed to do, right?). Only careful trade (lot) management has made my life easier. Now there are only 1 or two indicators I am comfortable using, and they mostly revolve around, again, Support and Resistance.
Not that Indicators are badl. Itâs just that, as a beginner, there are so many to choose from and you have such little understanding of when to use them.
3. Demo First
I signed up for a Mirror Trader account with FXCM. Little did I know that I would almost have to work harder managing the various Mirrored Strategies than I anticipated. I didnât set my stop loss and lost 100 bucks overnight due to a trade not going my way. I had to compare strategies, manage lot size, submit problems with the platform to the FXCM developers. Ugh. What a pain. What was I learning? How to pick âwinning strategiesâ. What did I gain? $100 profit. I withdrew my money and resolved to improve and develop my own strategies first, and do mirror trading as a backup once i knew more.
I then started demoing these strategies. Each approach got a different account. I was learning more this way. My support / resistance strategy has been doing a steady 4 - 5% a month. Iâm learning more and getting more comfortable with expectations on the demo side. I control every aspect of trading. Every month my methods get a little more advanced. Instead of just looking at the chart and support / resistance levels Iâll check an oscillator or market sentiment. Iâll plan an entry point. Iâll look at candlesticks and form an opinion on where I expect price to go. I am slowly experimenting and seeing what works and what doesnât.
Lessons Learned
Hopefully the next four months Iâll move a winning demo strategy to a micro account and build from there, once the foundations have been set instead of just grasping at strategies I find on the interwebsâŚ
