6 Years Trading Experience summed up for newbies

Beginner Questions
1

I’ve been trading for 6 years and have made a heck of a lot of mistakes in my time. I’ve also experienced way more frustration, anger, sadness and tears than anybody should endure.

With this post I aim to save you all that trouble, however I know that even if you agree with every single point I mention, you’re still likely not to follow the advice.(it’s just human nature i guess).

Golden rule #1 - Money Management.

Above anything else in trading, you need to have very tight and strict money management or else you can kiss your account goodbye sooner rather than later.

Risk 1-3% on a trading day and no more. It doesnt matter how right you think you are, this is what you have to trade with and not a penny more!

Golden Rule #2 - Technical analysis.

Forget complicated systems, forget fundamentals, forget the news.

You can trade purely on technical analysis. I use a combination of 3 indicators plus EMA’s and candlestick formations and I’m able to make profitable calls on a regular basis, days before they happen.

Golden rule #3 - Patience.

With correct money management as in the first rule, and good technical analysis as in the second rule, you can expect to make between 5% and 10% return on your account per month if you trade fulltime.

This is up to 120% return per year which is incredible if you compare it to any investment or bank.

However, if you’re trading with $1000, that’s only about $1000 a year profit (or $100 a month) which is not a lot of money. If you trade with this amount and expect to run it up to a million dollars in a year, you’re going to lose all your money and waste your time.

If you want to make a living off your trading, you need an account of $50k - $100k (depending on your expenses) and then you can only make this living if you implement rule 1 & 2 very strictly.

This is the essence of profitable trading summed up in less than 1000 words.

Forget everything else, concentrate on these 3 rules and you will come out ahead in the long run.

If you ignore this advice and blow your account… I told you so.

Happy trading
Diggy

2

Hi Forexhabits,

Your rules all make sense except for rule 2. I wouldn’t discount fundamentals completely. What Indicators do you use?

Bitterseatrader

3

Fair, but 1k 1st yr 4k 2nd 8k 3rd 16k 4th 32 5th 64k 6th 120k 7th… 100% profit compounded will make the cash, but yeah 7yrs part time tx trading at 100% a year is a big ask!? I agree with the KISS formula too :slight_smile:

4

I agree with all your rules. If we are good at reading price we don’t need anything else, as most of the new’s is priced in the chart’s itself.
Well, if there’s a unexpected accident or such we can’t help it out and that is why we have stoploss.

5

thanks Forexhabits. Maybe ur word sounds simple. But i know its very complicated for newcomer like me to understand and apply to the fx business reality, on what ur resume after 6years trading exp. Seems like write ur exp in ton pages then resume with only this one. But thanks for the share… Hope i will be like u someday but more than u in different aspect :slight_smile: