Hello everyone, hope everyone is safe in these crazy times we live in !
So I wanted some advice on my current trading. I started learning trading a number of years ago, but blew a few small accounts, jumped strategies, tried binary options etc. Then took a break, tried again, failed.
Since then I started investing more time into Trading Psychology and in May 2020, I decided to go live again. But this time my mindset was completely different and my expectations were way lower/realistic. And my discipline was on point, and I journalled it all, as well as sticking to one strategy throughout.
Other than skipping one month of trading during that time, I traded all of the months (7 months). So after 7 months of trading live, my account is up by around 10%. My ultimate goal would be to hit around 5% returns per month but I know this will be difficult to get to. My question is am I on the right track ? What can I do to improve my results ? I look at my journal but then struggle to find areas in which I can potentially improve on.
Now I know achieving my 5% per month goal wont happen overnight, but how long would I need to be trading to hit such a goal ? What things am I looking for to see where I can improve ? I only risk 1% per trade and aim for 2-3% per winning trade. I currently trade the D, 12hr, 8hr charts mainly.
Where else can I look to learn more rather than looking at different strategies/indicators ? Are my expectations relistic ? Should I be aiming for lower or more returns ?
Hi Lucmancfc,
It seems you have already earned your badge of honour from past experiences. welcome to the Forum. If you have not already read these, I suggest you read (front to back) Trading in the Zone (Mark Douglas) and Trade Your Way to Financial Freedom - Van K Tharp.
The first one will highlight any process areas you may have not covered in detail, and recommends detailed analysis of your trades to highlight any errors (in particular where you took a decision that was NOT written down before you entered the trade) or just simple errors. When I did this recently over a range of about 400 trades, I was amazed how many errors I had made when I thought I had a mechanical routine established. In my case the number of errors causing negative effect on results were almost balanced by those causing positive effect on results, but nevertheless, it was a good exercise.
The second book is all about trading psychology, but I have found Van Tharp’s content to be absolutely on the money for a serious trader.
Best of luck with the journey, and remember to participate in the forum. The more you ask, the more you learn.
That’s excellent news and excellent returns on your capital, despite your concern. I wouldn’t change a thing, providing your strategy remains profitable. One thing I’ve learnt and that is you cannot control or dictate what the market will fling at you - that includes your returns on trades.
So let’s check out a couple of things. A good profitable strategy should be able to demonstrate that the win ratio is within 4% of either being long or short on a trade. In other words, it’s not skewed to favour either.
Secondly, I tracked 8 months of daily trades to find out which days of the week were most profitable or had most losses. To my surprise, my trending strategy significantly produced its best returns on Friday by a long chalk, and its lowest on Thursday and Monday.
I’ve reasoned that institutional pro traders won’t rock their boat before the weekend, but having survived the weekend without misfortunes, will correct their positions at the start of the week.
Thirdly, I’ve shortened the time given to let trades run. If it seems likely to be a loss, I cut it before the S/L and use the ‘savings’ to fund a new trade. There’s always a better one awaiting.
Finally, I suggest you could increase your lot size to compound the 10% return - e.g. capital $1,000, now $1,100 increase from 0.10 to 0.11. If you find yourself losing because you’re fiddling about with your strategy, even after I suggested you let it ride, decrease the lot size accordingly.
I think it’s like scaling a mountain (not that I’ve ever done it).
You don’t much progress in the foothills but as you get more experience you think you’ve made it to the summit only to get over the next hill and there is more ahead.
Trading is like that - you won’t suddenly go from crap trader to great - but the fact is you are no longer losing is a big plus.
You’d probably tread here for a while, but in a year from now will be much closer to consistent trading profitability
That’s nicely put to words. Nothing happens overnight in forex. Practice is what is going to help you get out of your fears and look back at your mistakes. Develop a reviewing habit, So you’ll be extra careful about the mistakes you did before.
Well, I truly believe that books are the best source of knowledge for anyone. If you are apt with your basic forex knowledge, there is nothing that can stop you from making profits in the market.
That’s so true. Forex trading won’t get you results from the very beginning. You will have to make several losses before you can make profits. Try out as many strategies as you can on your demo account and once you have obtained enough knowledge and think that you are ready for live trading, start small.
Agreed, earning from forex is all about hard work and patience. Nobody gets rich here in a day or two, its all about how earnestly one wants success here and how passionately is he working towards his goal./
Forex trading is considered by many to be a difficult subject. But is forex really difficult? I think Forex trading will be much easier for you if you can trade according to discipline by maintaining proper psychology.
I know a lot of forex traders who were not very sure about what they were doing. But as soon as they started to trade forex, they realised that it is exactly what other traders say it is. You will be on the right track only if you know what you are doing. You won’t be doing anything much otherwise.
5% is quite reasonable in terms of monthly profit.
Keep using demo and fine tune your strategy master 1 pair before incorporating more and use proper money management good luck
I hardly believe, Options trading is not a proper way to show your trading skill! It’s all about gambling! I see, mostly the pro traders avoid this way of trading, I have no plan on options trading! Forex is much standard way!
A trader should go step-by-step while trading and avoid jumping directly to bigger trades which can make your trading process complicated. Every small step in trading eventually leads to bigger success.
