Forex documentary
I just watched this and one lesson I got out of this is the undeniable importance of “trading psychology.”
You must leave your emotions at the door, as much as possible.
I also noticed how short-lived some of their trades are. Not days, but just a few hours.
Anyone have any suggestions on what lessons new traders can learn from this short video?
You’ve already identified the most important lesson. Emotional control. Regard trades in percentage terms if you can. Regard money management as being critical. You can’t trade without capital so a low risk strategy keeps you in the game.
Losses are inevitable, but large losses aren’t. Learn to cut those losing trades short, there’s always a better trade awaiting.
@steve369
I understand what you mean by percentage.
In this documentary, they’re investing £100,000,000 and profit £20,000 in just a few hours.
However, that’s actually just a 2% profit. Which, is nothing. But because they’re rolling with a £100,000,000 margin, a small profit % is a lot of money.
But, when you’re just a retail trader with a $2,000 account (like me) and you’re only throwing in $200 at a time with a 2% SL, if you profit 2% you only get $4. That’s only enough to buy you fries and a drink at McDonalds.
Even though you technically would have the same success rate as a top trader (in this example).
But then again, they’re there at their desk trading all day.
I don’t know about back then, but nowadays some people only have one trade per month.
This video predates the development of the Japanese candle system, it seems. So, I’m not even sure how they could speculate price action.
I need that chart! Haha
[quote=“dushimes, post:3, topic:428067”]
But, when you’re just a retail trader with a $2,000 account (like me) and you’re only throwing in $200 at a time with a 2% SL, if you profit 2% you only get $4. That’s only enough to buy you fries and a drink at McDonalds.
[/quote]
$40 is 2% of a $2,000 account.
@steve369 Correct. But I only risk 2% of my account per trade. So, that allows me to place my SL, then increase my lot size until my SL is at around $40. This usually leaves me around a $200 margin.
That’s usually how I do it. So, a 2% return in this example would be just $4.
But to be honest, last month I took on a lot of losses. So, I’m just trading 0.01 lots right now, just so I can focus on % profit.
Once I’m consistently profiting, I’ll start increasing lot size again.
What do you think?
But, I could use more discipline with trading psychology. I’ve gotten better since I started, though. Much better. I still have a long way to go.
You are right with pointing out that emotions should be kept at bay while trading. They tend to hamper trading and restrict a person from making sound decisions.
That’s true. When you decide to trade, you need to ensure that you don’t let your emotions control your trades. You must put the best efforts to keep your emotions at the door because being emotional won’t take you anywhere.