Great post. It’s a hobby until you lose all your hobby money…then it becomes your business or you move on.
Thanks for your detailed response. Grateful you found the time to explain your thought process.
Actually the reason I mentioned swing trading was how much time and attention scalping occupies. I’m under the impression that scalping requires a greater degree of skill and chart reading ability but I don’t know if swing trading is any less stressful, atleast initially.
If you could find a way to balance personal priorities, family & goals with a less time consuming approach to trading wouldn’t it be a win/win for you? It’d be a shame to let all those hours of practice and effort rust over time.
Even for intraday stuff I don’t usually go below the M15. I honestly haven’t heard of swinging on the M5 chart. Ever tried the 4-hour to 1-day charts? I think most who swing also look at multiple time frames (for e.g. Monthly/Weekly/Daily or Weekly/Daily/4 hour charts) to understand the bigger picture and try to get an optimal entry.
This is what I’m struggling with atm. I’m a perfectionist and can’t stand being wrong by nature.It is a struggle to accept that you’re going to be wrong more than half the time and that it’s ok and expected. I’ve also got a tendency to go all in and pursue whatever I’m passionate about in a single minded purpose. Very destructive because many things fall by the wayside in that all consuming manner, very similar to how you described your experience with scalping.
I’m rewiring the circuits in my head. Poker was a wake up call (probabilities). Don’t want to waste the rest of my life being that single minded. There’s much to learn, do and grow.
Works out to a 20% gain if your estimated win rate was 60%. That’s not bad at all
Really glad for this exchange. You sound like someone who’s finally found peace and purpose. Even if you decide to completely give up on trading you’re still a winner
I personally plan on always having a part time job. Here in Germany its great. I work 3 days a week on the weekend when forex is closed. I earn more becaue its the weekend. But now the best thing: If you earn below a certain amount in Germany you can fill and apply to get more money from the state until a certain amount is reached. So far they dont have a problem that i also earn on forex as long as i dont take it from the account.
So at the moment everything is perfect. I also work the 3 days in a museum. Alli do is sit and watch that people behave and dont touch the paintings. Usually i read a book or browse my phone. i could even trade during that time but i dont like it. Live is good at the moment.
Well I don’t know if it is the number one reason but it is certainly very high on the list of reasons. Insufficient income from current sources (job, pension, etc) often combined with dislike of current job, boss, etc.
But, as anyone knows who has traded some time, it is not easy to earn a regular return. And it is just simple mathematics to realise that earning a decent income from trading would require extremely high risk exposure if one’s equity is too small. Even 20k is too small if it means having to earn 10-20% profit from it every single month in order just to pay the bills.
This is why this thread is so useful to any wannabe full-time traders. You have to do your sums and then try it out alongside your existing circumstances before taking the plunge.
Another aspect is that one should not think of living month to month off the same month’s earnings. Trading full-time is like streaming videos - it needs a buffer in the middle. You pay in irregular amounts at one end according to the market and trading success and you draw out from the other end a regular monthly income. But there needs to be a substantial buffer in the middle to smooth over the irregularities. Otherwise, if you fall short one month then there is immediately pressure to make it up the next month on top of the basic earnings you already need to make that month - there the pressures starts and catching up can be a killer.
It is very good of you to have returned with this story. As you say, this is not a denial story, it is an eye-opener to others thinking about it.
“Set/fire and forget” is, in my opinion, a very good way to trade generally. But I find a big difference psychologically between trades which are based purely on capital-building and trades which are providing an essential income. When one is full-time trading there is something of a need to watch and study markets on a regular basis as well as world events, etc depending on one’s trading approach. It is very difficult to avoid looking in on how one’s trades are doing when they are income providers - and even more difficult to resist meddling with them! In addition, if trade durations are more than a few days, it is a terrible pressure to see an open trade with a good profit and still let it run. And an even bigger pressure if, having seen it approaching a TL, to then wait for the outcome which turns out to be a SL after all!!!
The psychology is so very different when trading for a living.
I also trade on a “set and forget” principle but I also monitor my trades hourly. The only way I avoid interfering is to have set clear rules controlling this. For example, a reverse signal, a time limit of, say, six periods and close if not reacting as expected, and so on. I.e. there are defined concrete parameters determining the circumstances in which I am “allowed” to interfere.
Everyone trades differently, but sometimes there are ideas worth sharing. For example, somewhere above there was talk that a full-time trader needs a variety of instruments to share the risk.I, on the other hand, only trade one instrument and I watch it so carefully and continually that it is like a second skin. I watch when it is trending and when it is ranging, etc and set my levels accodingly. However, I don’t think this approach is so suitable for currency pairs but is better with indices and commodities.
Just some thoughts…
Yes, very difficult, especially with my tendencies, but I don’t believe it’s impossible. Rather I can’t afford to believe it’s impossible. Managing them once to move to BE or so is fine I believe but otherwise let them either run on TPs or trailing stops is the goal, with minimal intervention.
That’s why I enjoyed @SimonTemplar’s account. He managed to get a similar system off the ground.
An immediate goal is to read atleast 50 pages of a book on any one day aside from my trading and other tasks. Two weeks in and I’ve only managed maybe 20 pages the day before. Still micromanaging the trades more than they’re needed. Just got to be more efficient with my time and frankly speaking there’s a lot more I can do
Maybe it’s a futile exercise. But I won’t know till I go the distance.
I still believe in the 5+ year plan.
If you want to trade for a living you will need more capital, as @SovoS has suggested. You would also need to be able to double your account annually by showing an average of a 6% monthly return. You need to prove to yourself that you can do this consistently:
Start with $10,000
Year 2 = $20,000
Year 3 = $40,000
Year 4 = $80,000
Year 5 you would hit your $100,000. Only then should you consider trading full time.
Obviously there are many other factors to achieving this and it is not easy. Some months would be good, some would be bad. I could not do it right now and I’ve been trading for over 3 years. But that is my long-term goal.
I think trading is one of those “onion- shaped” activities - every time you work through one layer there is always another underneath!
But at least you seem to know where you want to get to and that is a big asset. No matter how good the road map, it is useless if you don’t know where you want to get to!..
Yup! And THAT’S the difference between a job and trading.
Assuming one is making those gains…
I think forex is good for both.
Yup. And this is why I don’t quit. Look at past charts, and you can see what you shiuld have done. The profits are there. I can see it. Every trader on this forum can have profits, but most of us won’t.
Not because it’s impossible, but because of our own choices. All we gotta do is filter thru our emotions, and slowly make adjustments to our thought process and the money will take care of itself.
Do not quit. If it’s something you want, do not quit.
I fully agree with you. It is clearly possible. It is only a question of learning - learning both the theory and the practice. This is why I always say that the key to success is not in the trades, it is in the trader and the preparation work.
The trader MUST develop a professionalism. There is no place for revenge trading, over-trading, FOMO, and all the other common errors that emanate from our human characteristics. But that does not mean one has to de-humanise, it just means learning the discipline. One can only imagine the discipline and training needed to fly and land an aeroplane, or lead troops in dangerous territories, or sail a small boat in heavy seas, or carry out a surgical operation. No-one can do any of these without the training, knowledge and discipline in procedures - trading is no different. People just have to realise that and work at it - it is not impossible, it is not even difficult.
It is just hard to do alone, with no formalised guidance and learning, just through one’s own mistakes, the hard way.
Interestingly, I just received an e-mail from a trading company and in it they state:
*It’s not enough to tell people what you did in a good trade. Because what really matters is the very specific information that led to that good trade. I.e. what caused you to do what you did in the first place."
Kinda similar thoughts!
Traders lack seriousness if they trade as a hobby in the market.
I’m not sure I agree. The beauty of forex is you can have a $100 account and still trade. Also, Tradingview now has a paper account that you can trade indefinitely. You don’t even need any of your own money to have fun with it. The ads are annoying, though.
Yeah, it’s a common misconception that swing trading is only for the higher TF charts. And there is even more of a misconception that you can only scalp low TFs.
I often swing the 5M and scalp the 1-hour. Nothing illegal about it.
Also, I don’t normally do a top-down approach. It’s best for me to concentrate on the chart in front of me.
Yeah, but aside from the psychology, swing trading limits the daytrader’s opportunities. You just have to take what is offered. And sometimes you have to scratch and claw your way back to profit by scalping.
Thanks, but I haven’t given it up completely. It is still my hobby.
Thanks. Glad it’s having an impact.
I was able to build a little buffer, but it needed to be bigger, for sure.
I agree. And I think you’ve laid out a pretty good plan.
Why is that? Wouldn’t it be the same thing as really good golfer deciding not to go on tour due to family commitments?