How has your mental understanding of Forex changed over time?
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  1. #1
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    Default How has your mental understanding of Forex changed over time?

    Hi,

    Forex has become available to everyone. If you read up on it then there is no one that knows something you don't.

    the only thing that can change then, is your understanding of that knowledge(including how to implement it).

    Can you give any examples of something you was doing Forex related that was not working until one day you came across another way of understanding that component that enabled you to then implement it better?

  2. #2
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    Although knowledge of information is available to everyone, should they look for it, most of the time it is highly misguided information, incorrect information and [unfortunately] in most instances geared towards the motive of the vendor should they be wanting to take advantage of traders with little knowledge - we've all seen these types of promotional adverts/posts.

    I suppose there were three lessons that I learned along the way.

    1. Don't base trading decisions on indicators such as the most common oscillators (RSI, MACD & CCI to name a few of more common). There are numerous free [misguided] advertised system which are driven by such indicators. It's so easy to fall into this trap as a new trader as it seems to simplify the whole process. I openly admit that when I first started I was a huge advocate of RSI divergence and convergence, the reality is that this wont work as a stand alone reason to trade. Fast forward a number of years and I don't use any indicators - however, I do know a few traders who use these indicators successfully, although their approach is to use this indicators as added confirmation that the trade in question has a higher probability of success (the original trading idea was NEVER derived from such indicators).

    2. I suppose the second biggest lesson learned was that of being realistic - the reality of trading is rarely discussed. Again, when I started to trade I used to draw up templates of how rich I would be after making 40% a month - this is just not achievable [at least long term]. It's a delicate area to discuss, and one that I happen to argue quite often here, but any new trader who is adamant that they can make in excess of 5%-10% a month for extended periods of time is delusional and quite clearly still in the 'newbie' stage. Yes there are traders here who have managed to show a big return for a month or two - but we never seem to hear from them again later down the line. I wonder why this might be...I can name a few who are currently active here in this forum...

    3. Quantify everything - my three favorite words "quantify, quantify, quantify". Without quantifying every element of your trade how on earth are you going to manage to replicate success and avoid what clearly doesn't work. Quantifying though is a whole area of study in its own right - there is a right way and a wrong way to do so. It does require a lot of work to ensure you are capturing the correct variables, however later down the line it certainly makes the analysis of your trades a lot easier [and more accurate] - it's amazing what you can do in Excel after a few advanced lesson on data analysis (then again I am fortunate that this has been my day job for past number of years).

    I guess it's different for everyone - stay realistic and question everything you do.
    Last edited by RISKonFX; 04-15-2017 at 09:56 AM.

  3. #3
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    Quote Originally Posted by Jezzode View Post
    Although knowledge of information is available to everyone, should they look for it, most of the time it is highly misguided information, incorrect information and [unfortunately] in most instances geared towards the motive of the vendor should they be wanting to take advantage of traders with little knowledge - we've all seen these types of promotional adverts/posts.

    I suppose there were three lessons that I learned along the way.

    1. Don't base trading decisions on indicators such as the most common oscillators (RSI, MACD & CCI to name a few of more common). There are numerous free [misguided] advertised system which are driven by such indicators. It's so easy to fall into this trap as a new trader as it seems to simplify the whole process. I openly admit that when I first started I was a huge advocate of RSI divergence and convergence, the reality is that this wont work as a stand alone reason to trade. Fast forward a number of years and I don't use any indicators - however, I do know a few traders who use these indicators successfully, although their approach is to use this indicators as added confirmation that the trade in question has a higher probability of success (the original trading idea was NEVER derived from such indicators).

    2. I suppose the second biggest lesson learned was that of being realistic - the reality of trading is rarely discussed. Again, when I started to trade I used to draw up templates of how rich I would be after making 40% a month - this is just not achievable [at least long term]. It's a delicate area to discuss, and one that I happen to argue quite often here, but any new trader who is adamant that they can make in excess of 5%-10% a month for extended periods of time is delusional and quite clearly still in the 'newbie' stage. Yes there are traders here who have managed to show a big return for a month or two - but we never seem to hear from them again later down the line. I wonder why this might be...I can name a few who are currently active here in this forum...

    3. Quantify everything - my three favorite words "quantify, quantify, quantify". Without quantifying every element of your trade how on earth are you going to manage to replicate success and avoid what clearly doesn't work. Quantifying though is a whole area of study in its own right - there is a right way and a wrong way to do so. It does require a lot of work to ensure you are capturing the correct variables, however later down the line it certainly makes the analysis of your trades a lot easier [and more accurate] - it's amazing what you can do in Excel after a few advanced lesson on data analysis (then again I am fortunate that this has been my day job for past number of years).

    I guess it's different for everyone - stay realistic and question everything you do.
    Thank you for the indepth and honest breakdown.

  4. #4
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    Quote Originally Posted by StavFX View Post
    If you read up on it then there is no one that knows something you don't.
    I would whole-heartedly contest this statement. I've been in the markets for nearly 30 years and there's a lot of stuff I don't know that others do.

    the only thing that can change then, is your understanding of that knowledge(including how to implement it).

    Can you give any examples of something you was doing Forex related that was not working until one day you came across another way of understanding that component that enabled you to then implement it better?
    In terms of shifting my way of thinking, probably engaging in the Market Profile concept has been one of the biggest changes in how I look at things.

  5. #5
    scmonds Guest
    2. I suppose the second biggest lesson learned was that of being realistic - the reality of trading is rarely discussed. Again, when I started to trade I used to draw up templates of how rich I would be after making 40% a month - this is just not achievable [at least long term]. It's a delicate area to discuss, and one that I happen to argue quite often here, but any new trader who is adamant that they can make in excess of 5%-10% a month for extended periods of time is delusional and quite clearly still in the 'newbie' stage. Yes there are traders here who have managed to show a big return for a month or two - but we never seem to hear from them again later down the line. I wonder why this might be...I can name a few who are currently active here in this forum...

    the above taken from "jezzodes" post is the first mental thing you need to get over..."Jezzode" is mistaken. ive traded forex for 14 years. my first year i averaged 10% per month in my first year and it has gone up ever since.

    things that have made me a successful trader.

    1- dont believe what cant be done.if you do you will never succeed...remember people used to believe the earth was flat and if you sailed too far youd fall right off..the 4 minute mile would never be broken.. there are so many storys of what is not possible..but hey most have been broken and many more will fall over the coming years. so keep your mind open...

    2- Indicators where first created as a selling tool, to get people to invest in a product...... that alone should tell you they dont do what you hope they do.. take a moment look at the charts and think about that one it will come to you.

    3- many studies have been done on trading markets using random entry, outcome random trading is more profitable than structured.- that should tell you alot right there

    4-money management is key

    5- "find an edge in trading" WTF is that?????? is it a indicator? is it a certain balance of indicators??? no the "EDGE" is "YOU"

    6-if you dont understand time and relation ...your screwed.

    7- the day you first sat down and looked at a bar chart and said "hey i can make money" is for most traders the only and last time they ever saw a chart correctly. and the mountain of info that came after it has done nothing but cloud them.

    8-traders that tell you it cant be done, only say it because they couldnt do it. and they are cleverer than you. that there tells you alot.

    9-Trading is a "ART" and like painting or drawing or sculpting you have to learn the strokes and spots of the market just like any technique that is applied to art.

    10- Should you succeed it is a very very lonely place. have someone to share your time with ... you will have plenty of it free...

  6. #6
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    Quote Originally Posted by rhodytrader View Post
    I would whole-heartedly contest this statement. I've been in the markets for nearly 30 years and there's a lot of stuff I don't know that others do.

    .
    just because you do not know about it, does not mean the information is not out there to be learnt. Whether that means you have just not come across it, or your understanding of certain aspects differs from that of others is the point i was making.

    That is also what makes Forex so interesting and exciting in my opinion. A new understanding of a concept you had learnt years ago can change everything.

  7. #7
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    Quote Originally Posted by scmonds View Post
    2. I suppose the second biggest lesson learned was that of being realistic - the reality of trading is rarely discussed. Again, when I started to trade I used to draw up templates of how rich I would be after making 40% a month - this is just not achievable [at least long term]. It's a delicate area to discuss, and one that I happen to argue quite often here, but any new trader who is adamant that they can make in excess of 5%-10% a month for extended periods of time is delusional and quite clearly still in the 'newbie' stage. Yes there are traders here who have managed to show a big return for a month or two - but we never seem to hear from them again later down the line. I wonder why this might be...I can name a few who are currently active here in this forum...

    the above taken from "jezzodes" post is the first mental thing you need to get over..."Jezzode" is mistaken. ive traded forex for 14 years. my first year i averaged 10% per month in my first year and it has gone up ever since.

    things that have made me a successful trader.

    1- dont believe what cant be done.if you do you will never succeed...remember people used to believe the earth was flat and if you sailed too far youd fall right off..the 4 minute mile would never be broken.. there are so many storys of what is not possible..but hey most have been broken and many more will fall over the coming years. so keep your mind open...

    2- Indicators where first created as a selling tool, to get people to invest in a product...... that alone should tell you they dont do what you hope they do.. take a moment look at the charts and think about that one it will come to you.

    3- many studies have been done on trading markets using random entry, outcome random trading is more profitable than structured.- that should tell you alot right there

    4-money management is key

    5- "find an edge in trading" WTF is that?????? is it a indicator? is it a certain balance of indicators??? no the "EDGE" is "YOU"

    6-if you dont understand time and relation ...your screwed.

    7- the day you first sat down and looked at a bar chart and said "hey i can make money" is for most traders the only and last time they ever saw a chart correctly. and the mountain of info that came after it has done nothing but cloud them.

    8-traders that tell you it cant be done, only say it because they couldnt do it. and they are cleverer than you. that there tells you alot.

    9-Trading is a "ART" and like painting or drawing or sculpting you have to learn the strokes and spots of the market just like any technique that is applied to art.

    10- Should you succeed it is a very very lonely place. have someone to share your time with ... you will have plenty of it free...
    very true statement.

  8. #8
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    I know very little about foreign exchange markets and their mechanisms.

    But I understand technical analysis. I honestly think if you're spending more time learning about fiscal policy or statistical methodologies for counting unemployment and the like rather than perfecting your trading, you're wasting your time.

  9. #9
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    Quote Originally Posted by scmonds View Post
    the above taken from "jezzodes" post is the first mental thing you need to get over..."Jezzode" is mistaken. ive traded forex for 14 years. my first year i averaged 10% per month in my first year and it has gone up ever since.
    Good for you - you should be teaching the institutional traders then at the likes of City Bank and Goldman...

    Oh dear... must we really go here again

    Here is a fun fact - If you have been trading for 14 years and make 10% per month on average as a minimum [as you have stated] and you started with a TINY $100 account [my guess is that it was certainly more], do you have any idea how much that would be worth, assuming we compound at each month end?

    $900,000,000

    (of course you could argue that income tax needs taking into account - but with this size of profit i'm more than sure that any sensible trader would move off shore to a zero tax haven)

    And instead you're rather here, batting around unjustified, misleading comments to new traders who want real advice from rational real traders. But don't believe me, the returns of retail traders are public information, easily accessible through the likes of the FCA and other financial authorities [admittedly sample data of real accounts, but significant enough to draw conclusions from for proposal papers] . It's not a lie, it's facts

    1- dont believe what cant be done.if you do you will never succeed...remember people used to believe the earth was flat and if you sailed too far youd fall right off..the 4 minute mile would never be broken.. there are so many storys of what is not possible..but hey most have been broken and many more will fall over the coming years. so keep your mind open...
    This may hold some validity - but please, stay realistic here. There is a fine line in beleiveing what is rational and what is highly irrational.

    2- Indicators where first created as a selling tool, to get people to invest in a product...... that alone should tell you they dont do what you hope they do.. take a moment look at the charts and think about that one it will come to you.
    This is not true at all, indicators where historically created to understand the securities of which they adapted to, by proven mathematicians - not by salesmen. This comment made me laugh. It is true that they are being increasingly used in todays day and age for sales tactics; however that should not be taken away from their true meaning, again they are still used by many successful traders [retail & institutional - across the board of FX, Stocks & Commodities]

    3- many studies have been done on trading markets using random entry, outcome random trading is more profitable than structured.- that should tell you alot right there
    Cant disagree here, although these random entry studies were net of spread - if you were to include spread then they would not be profitable as trading is a zero sum game - think about this for a moment, perhaps?

    4-money management is key
    It's certainly one of the Keys, not much use if you don't have a structured trade plan with a proven positive expectancy.

    5- "find an edge in trading" WTF is that?????? is it a indicator? is it a certain balance of indicators??? no the "EDGE" is "YOU"
    No, an edge is most certainly quantifiable - how do you suspect trading algorithms work?

    6-if you dont understand time and relation ...your screwed.
    Not much context provided here, perhaps you could expand?

    7- the day you first sat down and looked at a bar chart and said "hey i can make money" is for most traders the only and last time they ever saw a chart correctly. and the mountain of info that came after it has done nothing but cloud them.
    Yes, there certainly is a lot of misguided information available that new traders take as the truth. Deciphering this into useful information is highly time consuming.

    8-traders that tell you it cant be done, only say it because they couldnt do it. and they are cleverer than you. that there tells you alot.
    Experienced traders tend to be rational when discussing expectancy - after 14 years you should know this?

    9-Trading is a "ART" and like painting or drawing or sculpting you have to learn the strokes and spots of the market just like any technique that is applied to art.
    Questionable, i'd personally say it is a science. Coming back to institutional trading algorithms, these are most certainly not an Art - they are quantified, mathematically proven systematic entry criteria. I don't know about you, but the successful traders that I know do not paint over their charts in the hope to become the next Picasso

    10- Should you succeed it is a very very lonely place. have someone to share your time with ... you will have plenty of it free...
    Finally, something we can all agree on?

    I don't want to come across as an obnoxious ars*hole - however when providing advice such as your above comments can we please try and be correct, or at the very least realistic. This forum is full of people dropping by, people who smash comments down with no real effort and this is taken as 'truth' by the people who are here to learn.
    Last edited by RISKonFX; 04-16-2017 at 11:27 AM.

  10. #10
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    Quote Originally Posted by Jezzode View Post
    Good for you - you should be teaching the institutional traders then at the likes of City Bank and Goldman...

    Oh dear... must we really go here again

    Here is a fun fact - if you have been trading for 14 years and make 10% per month on average as a minimum and you started with a TINY $100 account do you have any idea how much that would be worth?

    $900,000,000

    And instead you're rather here, batting around unjustified, misleading comments to new traders who want real advice from rational real traders. But don't believe me, the returns of retail traders are public information, easily accessible through the likes of the FCA and other financial authorities. It's not a lie, it's facts.
    $900,000,000 that alot buddy...... 10% per month is not easy to get. I'm only 7% per month if lucky. Average is only 6%....so scomonds possible to guide us how u hit 10% what strategy u using? What your major pair? Ect....

    May God be with us

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