What was / is your biggest challenge with trading forex?

Interested to know peoples thoughts?
As a newbie I’m guessing there are a lot of people who have similar issues when they start out.
What is yours?

Lack of availability of “volume” information.

I tried for quite a while to compensate for it by looking at the (probably closely related) volumes of the most proximal forex futures contracts, but without significant improvement on my results from trading from time-based forex charts alone.

Eventually and somewhat reluctantly (at the end of 2015, even after making what most people would call a decent living trading spot forex for 4 years) I took the very repeated and insistent advice offered to me by successful traders (some institutional and some ex-institutional) and switched to actually trading futures so that I could trade directly from volume bars instead.

This was a huge eye-opener. I was able, with only very minimal changes to my charting methods, to do exactly the same things I’d been doing for so long and achieve significantly greater reliability, higher win-rates and more profit (so far, anyway!). I’ve ended up, of course, with some embarrassment, wishing I’d been the kind of person who’s “easier to advise” and had done this [I][U]years[/U][/I] ago. It really makes a difference to the results, and the difference is genuinely beneficial.

For me the challenge is mostly psychological. I am often not patient enough when I make my trades and I tend to close my positions too early, and other times, in an attempt to compensate for that I close them too late. I am working on myself though and I think I am improving.

Discipline and also screen time

[B][U]Discipline [/U][/B]
if you have your ducks in a row regarding strategy, Entries , Exits , Signals , MM , Brokers , Platform , Capital Base …then ask any decent trader and its keeping the focus and discipline tight …i’m a scalper (or short term trader)…lots of trades a day …its the discipline that kills me …always has been …I have the attention span of a fly …

[B][U]screen time [/U][/B]
I am back as a FT management consultant this year - so only getting 2 hours a day max on the screens …used to be F/T scalper and was much easier to be relaxed and let the trades come to me…its natural to be more pushy wen the clock is ticking …all my doing and my fault and easily fixable when I go back to being a FT trader in 2017

why am I management consulting again ? …because scalping bores me rigid day in day out …sure the moneys good , but I still need more variety in my day and dealing with people …just me I guess … in 2017 I may run some trading courses again - that will solve that by giving me the people contact and trading at same time

N :5:

don’t beat yourself up …you made the change - which is a lot more than most hard bitten experienced traders do …I changed a few things 3-4 years ago on my forex approach and it really added the value …

amazing how we can all be lead to the water …but takes us longer to drink - eh ? :18:

N

Indeed - exactly so. :slight_smile:

Thanks for the “charitable interpretation”. :8:

The truth is that trading the most proximal contract of Euro Futures or Pound Futures is almost identical to trading the EUR/USD or Cable, respectively (they’re about 99.9% correlated) … [B][U]but[/U][/B] just with the hugely significant additional facility of having “volume” directly available, which - for me - makes all the difference in the world. My pro-trader friends knew (and I didn’t) that my semi-scalping, intraday trading methods would be ideally suited to trading from volume bars, much more so than from the quick-ish time bars I’d been using - admittedly successfully - for so many years. I have some degree of Asperger’s syndrome and pretty contrarian instincts - [I]in one sense[/I] I almost “can’t be taught”: I have to work everything out almost from scratch, for myself. (I had much the same issues at university.) Sometimes that has big advantages; at other times (and this was one of those times) it’s a bit of a “handicap”. :8:

(Edited to add: I’ve now actually switched from forex futures to index futures, but that’s not really relevant to the “journey of discovery” [I]per se[/I] which I think this thread’s about.)

Umm, Interesting, I think thats why I had such a hard time really learning Forex, I have to trial and error, and shot myself in the feet before I get that "Ah Ha " moment, then move to the next set of failures

Yes this is big challenge among trader, Sometime faced with loss leading me being emotion and can’t control decision, and in my experience if already emotion then reckles in decision making hence result will only loss again

Thanks for your responses.
I should have shared mine at the start :34:
I’m trading a few of the indexes after mixed success and failure with forex.
The indicies seem to be working for me and I like the idea I can make 1 or 2% in any where from a minute or two
to 60 mins and then be done with it until the next market opens
I have found the less I trade the more successful I am. Possibly I suffered as most newbies do from FOMO.
Thankfully I 'm getting over that.
Also now I’m not stupid enough to let the price run past my Stop, I am more successful. :mad:
So for me it was over trading and money management

Reaching Consistency.

Biggest challenge in forex for me was overcoming the spread. By nature, forex is a zero-sum market. If we take random trades in random directions with a fixed 1:1 R:R, it should result in a breakeven balance in the long run. But factor in the spread, and we actually have a negative-sum environment. Now, if we do the exact same thing, we’ll lose money in the long run.

One metric to assess a trading strategy is its expectancy. Expectancy tells us roughly how much pips we can expect to make per trade on average. Coincidentally, I find backtesting most losing strategies, with sound logic, will generally have an expectancy equal to -(spread). This demonstrates that most strategies are more or less breakeven, but the cost of paying the spread per trade is what is making it a losing strategy.

Once a trading model can beat the spread, that’s when you’re in business. :slight_smile:

Hard thing for me was knowing when to listen to others and knowing when to stick with my plan, too many times I’ve spent hours of research on a trade idea only to read some analyst say the exact opposite. More often than not I could of just stood my ground and made the trade accepting the win or loss because they were calculated. BUT, I get filled with doubt and let the trade slip away.

In our trading we have to look for the signals that are actually based on our own trading and once we are able to do it then we have to rely upon them. In case the analysis is wrong we may get some losses but then it is the the opportunity to learn from our own trading mistakes here :wink:

I’m not quite following you, sorry.
If I am looking for a 1:1 R/R on a trade I just add the spread into the equation, with the indicies it’s usually only 1-3 pips and in most cases if you are clever about the placement of yous stop loss ie:don’t put it where logic tells you everyone else is, i don’t see how the spread should be an issue. It’s just the cost of doing this business.

For me it was one word: PATIENCE! My mentor hammered home “patience = profit” it still took me a long time to master the art of waiting for the trade plan to develop entirely before action was taken to enter/exit trades.

Indeed, as Buffett was quoted saying:

“The Stock Market is designed to transfer money from the Active to the Patient.”

This is so true, I have found over the years that as the number of trades I make each year decreases, my profits increase.

I have so many “challenges” that I don’t really know which to mention! I guess I am a strange animal in that making a profit is not, and has never been, my prime priority in trading. By nature, in all things, I am a developer, This means I am never content to stick with what works even before it has a chance to prove it [U]can [/U]work! I am constantly tinkering with new thoughts and ideas. I even wake up at night with a new idea and have to put it into my charts at first light. Being an eternal optimist, I always try new things with live accounts. I am passionate about technicals and even more passionate about trying new things. But this often has its own cost in profits. But, hey, what does that matter if you are enjoying yourself, learning, and making enough to keep you playing in the sandpit?

Having said that, my method development has always been very systematic and actually the core basis of my method has remained unchanged for many, many years. Maybe the nearest publicly recognised method is Guppy MMA - which is so close to my own independently derived method that I was dropped-jawed when I first saw it. Only major difference is that I add ribbons to the rainbows! (and no “funny” comments about that either, please! I’m a happily married man :21:).

But I guess my biggest negative challenge is that if my own method tells me that the market should go up or down but doesn’t move immediately after I have entered a position then I usually assume that I must be wrong and close out instead of waiting for the market to catch up with me. The consistent element in my method development has always been identifying directional changes as early as possible, but this often means the market starts to properly move only after a significant wait - and my patience/confidence can often fail before this happens. It takes bravery to believe in one’s own system enough to trade against the prevailing direction unless it is actually confirmed quickly in the price action. And that kind of bravery is even harder to wear when one is, by choice, entirely alone in one’s trading…

You may want to make note of what the market does before it “catches up” with you. There may be a slight flaw in your strategy that would correct that…jmo…otherwise it seems you may suffer from over analysis syndrome…making profit should always be your goal otherwise just “play” in the demo sandpit…again jmo
If you have a proven strategy(which sounds like you do) and you plan the trade…trade the plan…you need to trust your homework and let the trade develop as you planned until it shows you(by your criteria) that it is no longer a valid trade…trust yourself…

On the contrary, if you are only thinking about the money then you are going to limit your creativity in addition to the risk of serious psychological negative impacts. I make what I need and I “play” with the rest, but thank you for your “opinion”. And, it seems, judging by one of your previous posts, your opinion is not particularly backed up by your own record in profitability:

[I]“I started with $1300 in a trading account in 2004. Leverege was 400:1 and away I went. after 6 months of trading I had turned that $1300 into $276.00. Sound familiar to anyone?[/I]”

oh and BTW, I have just about the simplest analysis one could imagine - almost embarassingly so! So perhaps you might stick with resolving your own “challenges” rather than deprecating others’

oh and another BTW, I think I said that I [U][I]enjoy [/I][/U]my trading I don’t remember actually mentioning “[U][I]suffering[/I][/U]” anywhere . But thankyou for your interest in my welfare!