So… This question goes out to all the forex veterans out there… Honestly, I just am curious and am wondering… If there is one thing you wish you realized when you first started trading that you know now after being consistently profitable what would that be or what was it that “changed your game” made you “level up”, or gave you that “aha” moment in your trading career to push you to new heights? I’ve noticed my trading is getting better with time and experience but in essence what should I avoid and or what are some of ur daily habits to become mentally, physically, spiritually balanced?.. Don’t mean to be weird lol, just looking for some advice. Thanks…
2 Likes
Hello,
If I could go back in time to day 1, here are a few things I would tell myself:
-
Dont focus on profit, focus on capital preservation
-
Dont enter trades @ market, use orders to enter trades at predetermined levels
-
Dont judge your strategy on winning %.
-
A significant portion of your yearly profit will come from a small handfull of “homeruns”
-
Price is king
-
Every currency pair has a “personality”
-
Embrace and learn from your losses.
-
Dont make predictions
-
When in doubt about a particular trade setup, remember that its better to be on the sideline wishing you would have entered the market then to be in the market wishing you would have stayed on the sideline.
12 Likes
No… No… Mate
I COMPLETELY UNDERSTAND
and let me say… it’s a very intelligent question
Prepare for a lengthy post … ok
I’m going to try and summarize everything that is relevant to your question that i have experienced in the last 7 years.
First of all there IS NOT 1 thing, there are many things
but if i had to narrow it down to 1 thing, it would be
I HAD NO IDEA WAS I WAS WALKING INTO, i just had a goal of what i wanted to do.
but that doesn’t help much.
so let me also say this…
The first thing was … i did not expect the industry to be so ruthless and take money Without batting an eyelid
EXPLANATION :
The Industry charges you to learn, When you make mistakes YOU PAY MONEY TO LEARN
The industry doesn’t care if you don’t know, IT WILL STILL TAKE YOUR MONEY
The industry doesn’t care if this will send you broke or end your life, IT WILL STILL TAKE YOUR MONEY
and the justification for all this is
"you agree to hold us harmless" (as per the contract)
then…
i didn’t know that it was not wise (Meaning… that i should not have) Started with an amount less than $2,000
EXPLANATION : Because of how minimum lot sizes work and how leverage sneaks up on you, Even though your broker tells you "you can start with a minimum of $25"
YOU WOULD BE CRAZY IF YOU DID
then… TERMINOLOGY was not clear
EXPLANATION :
I Remember going through babypips school for the first time
and then opening a trading account, DEMO then live
i have found that you’ll come acroos two basic types of interfaces
Type 1 - when you are trading you are shown (in $$$$) how much currency you are controlling or Trading, but YOU WILL NOT BE SHOWN LOT SIZES
this is a deceptive way to trade because
- it makes you feel important when you see that you control around $50,000 worth of currency.
THE ILLUSION of this type of trading is… You are not really aware of how much you are winning or losing until the trade is over
and more importantly , WHEN THE TRADE MOVES AGAINST YOU, you are not really aware of how much you are losing until you lose it al and get that WTF moment.
i started on a platform like this
Type 2 - The type that shows you trades IN LOT SIZES
the first thing that will happen when you come from Type 1 to Type 2 is…
you’ll stare at the screen for a while and probably decide… oh well, i guess i’ll put on 1.0 standard lot and see what happens
so let’s say you start with $300
and you put 1 trade down for 1.0 standard lot
WHICH IS $10 PER PIP
Now… IF THE TRADE SUDDENLY MOVES 30 PIPS AGAINST YOU… You’re FIRETRUCKED hehe
you will sit there and say… oh my go, what just happened
Other issues with Terminology that i remember facing initially were
- What is a Lot
- How much lots should i trade
- What does MARGIN mean
- What does MARGIN LEVEL % mean (this is really really important)
- didn’t know there were swap fees
- i didn’t know there were commissions
Next
YOU THINK YOU CAN TRUST YOUR BROKER… hehe
You’ll then call your broker and ask
"what do all these terms mean ?"
and YOU WILL BE FACED WITH SOME GUY WHO…
-
You think he knows what he’s talking about (in actual fact, he probably has no idea and is merely taught to talk the talk)
-
because you don’t know what markets will do , YOU CHOOSE TO BELIEVE THAT HE KNOWS (But, he hasn’t got a clue) he’ll say this
You might say “I’m trading EUR USD, what do you think the market will do today"
he might say something like this
"well. i think there is a lot of bullish pressure from [Insert News Report here] and as a result of [insert another news report here] i believe that there is a very good chance that we are going up to at least [insert price here], but if that doesn’t happen then it will go bearish to [insert price here]”
hehe
now… the guy on the phone will sound like a cool guy, he’ll sound like your mate,
fact is
HE WILL BE ONE OF TWO TYPES OF PEOPLE
Type 1. He genuinely is a nice guy but hasn’t got a clue and probably can’t trade himself and figures he’ll join a trading firm and get some experience
THIS GUY CANNOT HELP YOU
Type 2. he is not a nice guy but is acting as if he’s your best friend
THIS GUY WILL NOT HELP YOU
BOTH GUYS will tell you this line
"of courses we want you to win, it’s in our best interest to keep you trading and if you lose we lose continued income" hehe
don’t believe this
A good rule of thumb is
IF YOUR BROKER OFFERS YOU INFORMATION ON WHICH WAY THE MARKET WILL MOVE… Be Very Very suspicious of that
this is a direct conflict of interest
now… THIS IS A BIG ONE
MARGIN LEVEL %
One would assume that if your Margin level % is at 100% you should be fine
NOT EVEN CLOSE
I had to learn by experimenting
i made a rule to keep it above 100%… I got taken out
i made a rule to keep it above 200% … i got taken out
i made a rule to keep it above 500% … (you think this would be safe… Eventually, i got taken out and dropped like a bad habit)
i made a rule … you get the idea
Each time you think you’re safe, YOU GET TAKEN OUT
BOTTOM LINE IS THIS… TO BE SAFE
Keep your Margin Level %
- As High as Possible
but - NEVER LET IT BE BELOW 1,000% (at the time when you open a trade)
so… you can chose whatever lot size you like, but if your Margin level is below 1,000 % and a big move happens, YOU WILL BE FIRETRUCKED… BANK ON IT
keep this in mind as well
if your Margin level goes below 80% YOU WILL RECIEVE A MARGIN CALL
You can do 2 things here
- Deposit more money or
- let the trade ride
IF YOU LET IT RIDE and it keeps going against you
and…
if it reaches between 20% - 30% YOUR BROKER WILL TAKE YOU OUT AND CLOSE YOUR TRADES… You will not have a choice in the matter.
this will result in your account being blown
Your broker is LEGALLY allowed to shut down your trades Once you get below 100%
Most hold to the rule of 80%
but very few actually close your account at 80% BUT THEY CAN IF THEY CHOOSE
below 40% I WOULD BE VERY CAUTIOUS
knowing this from the start could have saved me a tonne of money
KNOWING THAT RISK IS NOT 1 THING
Risk is comprised of a few things
Stop Loss position should be considered when assessing risk
Take Profit is not relevant in assessing risk (Profit is not a risk, Loss is)
however, there is an element of probability associated with the Take Profit position, because if your T/P is too far away the odds stack against you and it’s inevitable that you stop loss gets hits first.
risk is also How much money are you risking vs How much is in your account
NOW HERE ARE SOME NOT SO OBVIOUS ONES
if you feel tired or sad or too happy , or to confident you increase your risk of failure
if you have pets, you increase your risk of failure… Example
if you have dogs or cats or birds that roam free in the house and they step on your keyboard, YOU COULD LOSE MONEY
for me… Lucky it was on a demo
My Rainbow Lorikeet, Jumped on my keyboard,
I KID YOU NOT
- OPENED A TRADE
2 THE MARKET WAS HIGHLY VOLATILE - SOMEHOW HE TOOK ANOTHER STEP AND CLOSED THE TRADE
****** I LOST $15,000 IN A MATTER OF SECONDS **********
Lucky it was a Demo huh
so… Rule to live by
if you have pets, do not allow them be able to get to your computer or keyboard.
[removed for Forums violation]
SOLUTION… Do not allow for distractions while you are trading.
if you must answer something, ALWAYS USE STOP LOSSES just in case
Not having a plan or a goal will also increase your risk
which brings me to this
PLAN YOUR TRADES
Have a Definite plan of the following
- what is your yearly Life goal
- what is your weekly or Daily Life goal
- what are your yearly , Weekly Daily Trading goals
- Do you have a VERY VERY SPECIFIC SET OF RULES THAT WORK , THAT YOU FOLLOW WHILE TRADING
if you don’t… FORMULATE THEM
because if you fail to do this
you will never understand why you are losing
I personally made a flow chart
BEST THING I EVER DID
REMAIN CALM AT ALL TIMES AND FORGET ABOUT THE MONEY
This is not something i had to overcome, it’s just something that is important to mention
DO NOT STRESS (Master how to do this)
Do not relate the amount of money that you lose to a memory of how much effort it took to earn the money at work or how much BS you had to put up with at your job to earn your pay.
DO THE OPPOSITE OF THE NEWBIES
As a newbie thsi be almost impossible to do
but… strive to
a) Understand what beginners are doing
(a Good way to learn this is go to Newbie islandon baby pips and read what everyone says,
and understand NONE OF THEM KNOW WHAT THEY ARE TALKING ABOUT
Learn from this
b) Learn what NOT TO DO from the newbies as a newbie
Example…
lets’ say you are trading EUR USD and eveyrone is saying… buy buy buy… well.
you want to be looking for a sell position
you also want to expect the market to move against all the newbies at some point
MAKE A HABIT OF REVISTING BABYPIPS OCCASSIONALLY AND RE LEARNING
this is self explanatory
UNDERSTAND THAT THE MARKET MAKERS READ THIS STUFF AS WELL
Understand that the people who YOU THINK you can take money from, HAVE BEEN DOING THIS FOR OVER 100 YEARS
THEY ARE EXPERTS
BE CLEAR ON THIS
YOU WILL NOT PROFIT A CENT UNLESS THEY ALLOW YOU TO AND GIVE IT TO YOU
do not think that Candlestick patterns form purely as a natural result of PUSH PULL ACTION as a result of Bears vs Bulls
No…
what do you think the market makers would do if they knew that 95% of all Traders want to BUY a currency
do you think
a) they would squabble between themselves in the hope that one of them wins
or
b) do you think that they may work together to take your money and rob you blind
hehe
it’s not rocket science
Markets are indeed Manipulated, make no mistake about it
also understand that Longer time frames are harder to manipulate
brokers read the same stuff that newbies read and they KNOW WHAT YOU EXPECT TO SEE IN A CERTAIN SITUATION
NO ONE CAN GIVE YOU A MAGIC PILL SOLUTION TO SUCCESSFUL TRADING
WHY ??
Well, Unless we live in the matrix and we can upload information instantly to our brains that allow us to fly a chopper or be a kung fu master or an expert trader in a matter or seconds
SADLY… IT COMES DOWN TO THE SLOW PROCESS OF EXPERIENCE
that’s it
EXPERIENCE
and this takes the following
- TIME
- MONEY
- PATIENCE
- RISK MANAGEMENT
- YOU MUST LOSE AND MAKE MISTAKES IN ORDER TO WIN
- YOU MUST LEARN FROM YOUR MISTAKES
No Automated Trading robot will help you
Experienced traders (who know how to play the game) WILL NOT WASTE THEIR TIME WITH YOU
(Because it takes years of 1 on 1 trading and learning. it’s not worth it… i know, i’ve tried and i’ve taught people
and even if an experienced trader helps a newbie, he gets labelled a scammer
IT’ S JUST EASIER TO NOT BOTHER
Occasionally you can offer help, but IT’S VERY LIMITED and it won’t put you ahead of the pack.
again, Because Experience and Time are a necessary component
now… EXPERIENCE AND TIME
BUT… THERE’S A CATCH
there is no point doing something for 5 years if you are doing it wrong
so…
here is a guide
you will likely need to learn for around 1 - 2 years on demo
until you are ready
but, THE CLOCK STARTS TICKING FROM WHEN YOU ARE LEARNING CORRECTLY hehe
Not from when you started
so… How do you learn correctly ?
well. AGAIN, EXPERIENCE
Trial and Error
but … it does help to have a definite trade plan so you can define your errors and fix them instead of jumping from strategy to strategy
BINARY IS FOR IDIOTS
Binary Options are for idiots… simple as that
if you trade binary options YOU WILL LOSE
it’s a simple as that
i personally did not , but i have tested it
i knew better, straight off the bat
but in the process of teaching people forex successfully (Which i no longer bother with)
i have found that many start off with binary
and…
ALL OF THEM WITHOUT FAIL HAVE LOST ALL THEIR MONEY
if you can get a friend of group of people to trade with it helps the learning process
let’s see what else
oh
Have a stable internet connection… AND A BACKUP CONNECTION
(this ties in with Risk management)
don’t be in the position where you put a trade down, you have to get out because there is a reversal that was unexpected
and… YOUR BLOODY INTERNET DROPS OUT
it sux
No one will reimburse you for your loss
now. it wont’ matter if you lose $20
but, if you are trading to the effect of $10,000… yeah… IT SORT OF MATTERS. hehe
and… if you are planning on trading succesfully, YOU WILL EVENTUALLY GET TO THIS LEVEL.
now there are things you can do to combat this from happening
-
Have 2 Internet plans from different providers
is it crazy… NO, considering how much you make vs the safety aspect of it -
the problem sometimes lies in the fact that
YOU PUT DOWN A TAKE PROFIT, but don’t have the time to put a stop loss down
SOLUTION… USE A PROGRAM OR EA THAT PUTS THEM BOTH DOWN INSTANTLY
so… when you hit that button both are on
oh… or course
EAT PROPERLY
This is critical
YOU MUST
Eat Properly and Drink Properly
Dont’ eat crap… ok
you need your brain to make logical decisions
you will make the best decisions if you are eating healthy and drinking healthy
if you eat crap
CHANGE YOUR DIET
this will also affect your emotional state and will determine if (After a loss) you feel like shit or not.
this was a biggie
TRADING IS NOT GAMBLING
I Didn’t perceive trading as gambling, but i frequently see people say this
"i put a bet down to sell"
or
"when you place a bet on EUR USD make sure… etc"
if you are using the word "BET"
you need to change how you think
TRADING IS A RISK, NOT A GAMBLE
let me explain
A long time ago i used to play Snooker competitions and less frequently, Pool Competitions.
now… when me and some mates went to a pub (outside of competition) (And No, i was not a hustler or a shark)
but when i went to a pub and some guy would challenge me to a game
USUALLY THERE WAS NO COMPETITION
there was always the off chance of RISK that some player who didn’t have a clue and was blind as F*** would accidentally drop the entire table… sure… it happens
Not in Snooker, hehe
But in pool… yes
The Reality was this
IF A PERSON PLAYED ME IN POOL and they allowed me to have 1 Turn, they would have around a 30% Chance of winning
if they stuffed up their turn and i was allowed 2 Turns in a game… GAME OVER… simple as that
it was not a Gamble, it was a skill
you see, if you have 2 people playing pool that don’t have skill, it’s a gamble
if you go to a casino and play black jack… IT’S A GAMBLE
because
you are not allowed to see the history of the cards
you cannot requrest a print out of the last 500 decks that were dealt so you can find a pattern
you cannot get out of the game if you see the dealers first card is a crap card
you basically enter the game with no upfront information
and you are playing against a superior opponent
IT’S A GAMBLE and in the long run… YOU LOSE
BINARY OPTIONS IS A GAMBLE because it takes away all the safety measures that you can hope to have in trading to make a trade an EDUCATED RISK BASED DECISION
in trading, you can obtain information
you can research things
you can set safety measure , Stop Losses etc
you have indicators you have calenders
IF YOU USE THESE RESOURCES CORRECTLY AND FOLLOW A PROVEN DEVELOPED TRADING PLAN
IT’S NOT A GAMBLE AT ALL
there is a risk of loos, BUT IT IS MANAGED
also, I’ve run a business for the last 16 years
now. am i guaranteed to get work every day… NO
so is my business a gamble ?? NO
because i have risk management in place
i’ve worked out a proven business model that generates income
so… even though my clients are not in any contracts
they still call every single day
and i make money every single day
Everything is planning and risk management
Driving a car
Living Life
Getting Married
whatever
if done correctly
trading is not a gamble
I THINK THOSE POINTS ARE THE MAIN ONES
and yes
i wish i had someone to write all this for me from Day 1
Man, oh man
how much better life would have been
Hope that helps
I’m not going to say GOOD LUCK
instead i’m going to say
LEARN WELL
AND
PLAN YOUR TRADES
MANAGE YOUR RISK
AND
I WISH YOU ALL WELL
18 Likes
My most important realisation was I needed to find a trend and follow it.
3 Likes
Mine also, Tom: the turning point was simply learning to look for long entries in uptrends and for short entries in downtrends.
2 Likes
To identify (unambiguously and with a clear definition) underlying trends in higher timeframes than the one from which I’m trading and use this information as an overall directional bias (i.e. to take entries within my trading timeframe only when they’re in accordance with the higher timeframe’s trend.)
4 Likes
This post is full of win.
Biggest thing I learned was
- Don’t listen to 99% of people posting in forums. Most of them are pretenders and don’t trade any real money.
- When you develop your own strategy you are comfortable with . . . stick with it regardless of what other’s might say.
- Before you start live trading your own strategy figure out what your real drawdowns might be. This will really help to keep you steady when you go through a losing streak.
- Time is your friend. A massive backtest was done with multiple different strategies over years and with different trading instruments. What they found was that taking profit at predetermined places was not the most profitable. The most profitable method of taking profit was to wait a significant period of time (something like 60 days in this case). Now, I’m not advocating waiting that long. But I think it points to the fact that patience is needed. Regardless of whether you are day trading or swing trading, give the market time to work. I’ve been in trades that lasted on a day (swing trading) and trades that lasted over a month or longer. You have to be willing to wait out the ebbs and flows of the market.
5 Likes
i agree with the majority of this
Point 1 is definitely correct
Point 2… well, the reason why people continue to lose is because they don’t follow point 2, they don’t settle on one strategy then work on it, they do strategy hopping hehe
Point 4… Definitely
Most times if you are on the wrong side of trade, (Assuming you can handle it emotionally and financially) Holding the trade is the best option as it will likely come back to even out
Got something new. Looks a complete message. Thank you Sir.
For me it was when I went to the Daily charts instead of the one hour.
And stopped looking for “quick” results.
Now I am much more relaxed.
And given myself a larger stop loss.
So far it is working well.
1 Like
i concur with this.
When i was on shorter time frames a long time ago, it was stressful at times.
i also now feel relaxed
and i’m also on larger time frames
i look at H4 Daily Weekly Monthly
i only look at 1 minute when i want an entry
but i will make my decision TO ENTER based on the Weekly usually.
and it’s also working well for me.
If you mean that your directional bias arises from weekly charts and your entry timing from one-minute charts, why not just say so? It might avoid creating so much confusion.
This is how i talk,
What’s wrong with the way i said it ?
Why is this …
confusing
IT MEANS
When i want to pick a fine entry point, i look at the one minute chart… simple
Now, i could also say (As you stated)
i derive entry timing from 1 minute charts
i could also say
My short term decisions and timings are based on 1 minute charts
i could also , if i tried hard enough probably think up a few more ways to say it
DOES IT REALLY MATTER ?
this is how i talk
what is unclear about this line
and also
what is unclear about this …
CLEARLY you understood what i said
and there are many people on this forum that speak differently.
Are you suggesting that you we all have to speak the way you want us to speak ?
you didn’t say TI CREATED CONFUSION
you said … it created SO MUCH confusion
could you please clarify what MASSIVE inconvenience i have caused ?
simply stated mate,
this is how i talk
is there a problem with it ?
Thanks for all the details… what a great post!! I appreciate the value man and I will take heed… I’ve been demo trading for around 10 months so far, I tend to go from winning a couple thousand using 0.5 t 1.0 lots and then losing the profit and bringing me back to original deposit… for example… I’ll start off with 4500, bring it up to 7000 and then I’ll have a losing streak… it’s like 7000 acts as a ceiling for some reason. Maybe it’s mental but that’s why until I master consistency I will not open a live account. And once I am consistent only then will I begin my journey . I have been trading as if it was a live account. I am preparing to keep the same mentality so the transition will be streamlined. . Basically I am doing all I can to learn right now and train my mind to trade like a robot… I want more than anything to master this skill, this art… I will do my best… what gives me hope is knowing how many thousands or millions of people in this world are trading successfully doing the same thing… screw the %1 that lose statistics. I’m focused on the ones that are winning! And yes I look for trend on higher time frames as well, 4hr daily and weekly. I draw my support/resistance and trendlines out and then look towards smaller time frames for each entry for example an ideal entry during a pullback etc.
firstly The 1% are the winners, not the losers ( think this was typo)
but that aside
have you tested the ceiling ??
what i mean is…
if you trade with 0.5 Lots - 1.0 Lot
starting from $4,500 and you make $2,500 profit, then lose $2,500
TRY THIS, as an experiment
Trade 0.2 Lots
and see if your ceiling is still capped at $1250
if its’ not then maybe this course of action is your solution
Everyone trades differently , and you have to find why this is happening to you THROUGH TESTING.
Try different things , even if they seem stupid at times
keep going with it
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It’s psychological - Either Van Tharp, or Elder (can’t remember which) had a client who was findng the same ceiling issues (with real money .) - You need to identify the problem - why exactly does your subcnscious feel thet you should not be rich …?
Only then can you cure it - Or is it just that you are scared to risk real money and this is a mechanism to avoid the neccessity to trade for real .?
I don’t know - but you need to find out what the real issue is … 
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Yes, absolutely agree its about psychological. I believe it is the hardest to learn in trading.
Your post was indeed lengthy, but I read it all. Thank you for taking the time to share your experiences.
It was Elder.
I highly recommend both him and Douglas. Elder for newer traders, because he spends a lot of time on indicators, risk management and trading systems, which will be most useful to new traders. Douglas is all about the psychology, making him better suited to more experienced traders. He feels more ‘new age’ than Elder, but I felt the issues he addressed were closer to my own issues than what Elder was focusing on.
It’s early days, but I really feel they helped me bring my trading up a level.
1 Like