Greetings from the UK

Hey all! British trader here. I’m currently in sixth form (12th grade in American speak), and have been trading for around about a year. I am hoping this is something I can pursue as a career in place of going to university.

I am currently net negative around -£1500 but I planned to lose this money learning as demo accounts don’t do it for me. This is what I see as the learning cost and I have another £2000 I am willing to lose before becoming profitable.

I trade XAUUSD mostly but I also look at Forex pairs. I’m hoping I might soon find a profitable strategy, but it’s hard in a world where you are bombarded with Forex scam techniques.

I generally do day trading with bits of scalping, using Stochastic oscillator and price action.

Thanks for reading and I’m excited to get to know you all. Any advice would be greatly appreciated.

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Hi harrylarkin

It won’t be what you want to hear but move to demo.

Reserve your capital.

Find a system that works in demo then make a decision to move back across.

If you still insist to use real,
Consider a 4:1 reward to risk system for example- this should give you a little more longevity

DM

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If you want to practice live stick to a couple of hundred pound using 0.01 lots

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R:R sounds good.
I disagree with demo accounts I have used them in the past but they discount phycological effects which are a major factor in trading.
Thanks for the idea though.

Good idea!

I put some money aside to practise trading but I do try my best not to use too much while I’m not profitable

Your doing the right thing in my opinion. There really is no better education than trading a real account with just enough to feel the pain of losing. I’m also not a fan of demo accounts so don’t feel like that is a necessary step. Just remember trading metals can be very different than trading currencies…

Hi and welcome to the forum. I’d like to suggest that if you stick on this forum for a long time you will avoid many of the mistakes that many of the members have learned from in the past, and that will save you time and money. I admire you for starting young. You will have lots of time to recover from any serious mistakes but hopefully you will not make that many.

Before you do any further trading, I would encourage you to think deeply about what your money management strategy is or should be.
By that I mean how much of your remaining £2,000 bank are you willing to risk on one or more open trades in parallel?

I would also encourage you to think how much of your capital is at risk at any one time instead of calculating how much profit you may expect from each trade. It is a good idea to research the average true range (ATR) of the underlying pair, and set your risk in relation to the ATR.

Much of this can be learned by studying the School of Pipsology in Education section along with some classic books. Search on here for books and choose one or two that look interesting.

And remember, nobody in the world “knows which way the market is going to move”. We just look for tools (indicators) that can be proven in the past to have given us an edge where our gains exceed our losses. For the vast majority of us that is a lot of hard work, navel gazing and self-assessment that may never stop.

Best of luck

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You are gambling by trading XAU/USD, as are crypto currencies. It takes years of practice to become profitable on these pairs.

I suggest your mindset should be rewound, get serious, and educate yourself properly and proficiently otherwise you’ll blow all your capital. That’s the reality, not social media sirens.

Precisely, the psychology is the biggest thing for me.

And yes I sort of see gold as a more risky and more volatile GBPUSD.

However, it’s my favourite to trade and it’s the pair I know the most information about so for now I’m going to learn it.

Thank you!

I have read a good few books e.g. “Charting” by Fred McAllen.

I generally trade the maximum amount of lots I can in each trade so I only have one trade open at a time. This is generally 0.12 lots for gold.

I know that this is very poor risk management but while my portfolio is worth very little trading with any less than the full sum would show negligible return. I am expecting that I lose the vast majority of the £2k before I become profitable. I just need to prolong it.

I try not to let trades go below -5% of my portfolio however. I have had a look at ATR but have not yet figured out how to use it effectively, so will have a further look at that - thankyou.

XAU/USD is not gambling, and neither are crypto currencies. Gambling has no edge and the house always wins. Indicators used in Forex can just as well be used in gold and despite the higher volatility gold trends and has patterns. Crypto also trends with patterns unless you are talking about shitcoins/pump & dumps but you didn’t specify that.

I have not gained an interest in trading through social media gurus as I’m too sceptical. I have been education myself for the past year and I continue to. I likely will blow all my capital but that’s what I already said - this money is set aside for learning.

Love the fearless attitude! I know you’ll do well in the long run. :slight_smile:

Wouldn’t a negligible return be > a negative return? I believe abstaining from risk management would be detrimental to overcoming the psychological hurdles you’ll inevitably face trading.

Revenge trading, chasing losses, getting a high on a hot streak or a low on a sequence of losses, etc, etc, are mostly impulsive decisions we wouldn’t normally take if we aren’t caught up in the moment.

Risk management, in my humble opinion, is one way to confront those impulses and tendencies head on and manage them effectively. Like training wheels. Once you’re able to identify tackle them you won’t need risk management I believe. There are a ton of good traders who don’t use the risk management we read in the books with are successful. And then there are pros with decades of experience who eventually blow their capital (e.g. Archegos)

Why not set the goal on preserving your capital? Would setting a goal like that be detrimental to your goal in anyway you feel?

Books by Dr. Alexander Elder, Walter Peters ( in his one book with Alexander Nekritin) and Mark Douglas are worth reading. They address trading psychology and I believe all three have degrees in their fields. “The Mental Game of Poker”, Jared Tendler that’ll also give some insight. I don’t think I’m as well read as many other ppl here in the forums, but these should be a good start.

Tom Hougaard is one good trader I’ve found that talks a lot about trading psychology. He’s a pure price action trader that trades in the 7 figures live on YT and shares his thoughts and opinions while he does so. Worth checking out.

regards, Dims

Hi Harry,
If you are expecting to lose the vast majority of your bank, at what stage do you expect not to lose, and what would have changed in your trading strategy and plans to bring about that change. Please ask a trusted colleague (preferably one who is not interested in Forex) to give you their honest opinion of what you have stated here. Whether you are a young guy with £3K to spend, or £300, or £300 million, there is just no logic in your statement whatsoever. I will try to explain in the hope you can reset your current mindset.

So I start a new venture. I don’t really know how this venture works, but I do know that millions of people participate in it 24x5.5 (or in the case of cryptocurrencies 24x7). I also know that the historical failure rate is over 99%. (Note I have used my own definition of failure rate that means the capital invested AND the time invested has a minimum expectation of returning 5% per year on capital at an internal hourly cost of £50 per hour invested).

I join Babypips forum because I have heard there are some smart people on that forum who can guide me in my venture and minimize the mistakes I make in my journey.

The vast majority of members tell me to practice on a paper trading account before I make mistakes on a live account with real money, but that does not float my boat. I would rather learn to lose real money because I am impatient. Lesson #1 - learn to be patient.

I understand the Psychology thing but I have had little experience either way in knowing how a trader feels when he doubles his funds or loses 80% of his funds. Forum members tell me to be cautious and trade on paper first. That does not suit my style. Lesson #2 - learn to be disciplined. If you prefer to learn losing real money on a live account, is your own mindset telling you that you HAVE to lose money before learning how to make money? Patience, discipline, both are needed.

You have the third requirement - Initiative. It takes 10 times the effort to make £2K profit than it does to make £2K loss. A true trading plan should never take your portfolio down by 10% (at the extreme, 20%). Think about this in a realistic scenario. You would not be handling a £2K trading account to make a living out of it. You would be responsible for a £200K trading account, whether your own funds or a PROP trading company’s funds. If you manage 20% per year as an early trader you will be in the severe minority. And you would only be able to spend 1/2 of that, which is not enough for even a young single to live off these days.

I’ve provided a link to a podcast on ATR. Enjoy.

You’re learning incorrectly as you are not managing your risk properly. That’s the ONLY reason you’re blowing your account. Get smart and try and understand that trading excessive risk is a gambling mentality. FX trading is a slow approach to success, never a get rich quick scheme.

Top pros will regard the key to success is by protecting your capital at all costs. Without that mentality, you’ll fail. That’s the reality.

And listen and learn from the other posters as well. They’re trying to help you not to lose.

Great discussion and many valid points made by all. I’m of the opinion that Harry will need to find his own way despite the plethora of advice given here. If he feels the need to lose money that’s fine, even though it seems counterintuitive to most of us here. At 17 yrs old i doubt any stranger or family member could have influenced my decisions either :slight_smile:

Yes, I agree with you -thanks for the idea. I do find myself bipolar regarding wins and losses.

I shall work on setting a goal to preserve capital.

Thank you too for the references - I will get to those ASAP.

Hi @Mondeoman, thanks for the reply.

I think what I have said has been slightly misinterpreted.

I do have a good idea of how this venture works as I educated myself for six months leading to me putting any capital at all in. Very few users and only on this forum have advised I use a paper trading account; elsewhere I have heard many sources of people saying they’re a waste, e.g. CTI. Patience is not the issue - I am sticking to my plan.

I am not enthusiastically trying to lose money; I am accepting a learning cost of a few thousand. I then have hundreds of thousands of capital I can use when I become profitable.

I do indeed believe that I have to lose money in the market to learn to make it, however I can limit the amount I lose by using a smaller lot size in my trades.

Thank you for the podcast - I will get to viewing that ASAP.

I have not blown any accounts. Getting smart is not the issue rather acquiring knowledge is. This is why I’m expecing a learning curve.

Hahaha, the teenage brain is wonderful isn’t it?

I think what I’ve said has been slightly misconstrued in that people think I am aiming to lose money before I gain it. What I mean is that I accept that as with any profession there will be a learning cost, and I have set aside money for this.

I genuinely hope you kick @$$ because I relate to and love your approach so far. You’re way smarter than most of us, when we began, to understand and focus primarily on the psychological side of trading. Plus you’re not married to your funds and view them as a “cost of tuition”. You also come across as a strong (maybe bull-headed) and independent thinker.

I don’t think you’ll pi$$ away that money. You’ll make the most of it :slight_smile:

PS - Tom Hougaard doesn’t apply stop losses (one reason I immediately thought of him) either but he explains why and how he reached that stage. He’s pretty cerebral guy and worked as a prop trader (JP Morgan). I have a feeling you might enjoy his take on trading.