Hi,
My name is Sermed. I’m 28 years old and I study Finance in Montreal. I started trading starting in late January following an overwhelming swell of news on Oil. I had started being able to save money, and began to want to find some reasons to use the money. I was also cutting down on all the procrastination to focus on school haha. I had a void to fill and the financials to fill it with. I hope you read what I write next especially if you’re a newbie. It could save you a lot of pain!!! Scroll down for the lessons I’ve learned.
Every speculator and analysts from big Investment banks like Goldman Sachs and J.P Morgan were screaming price drops until $30 or some such ludicrous figure. At the time oil was around the $40-45 mark.
I had heard of etoro.com so I decided to start a practice account. After two days of trading on a practice account and doing “well” (Not really I was just to new to know it) I decided to enter into a real account with an initial investment of $500. My fear was missing the “great opportunity”. I lost 2/3 by the end of the week.
I decided to invest more but this time use low leverage and in the meantime educate myself in all things forex. I was making a $1-5 dollars per week and was feeling very frustrated. I was also constantly unsuccessful with oil and decided to drop it as a vehicle and focus on forex.
Then news about Grexit started picking up steam and around beginning of march. I decided using lots of different information points to Short Eur/Usd. First two days of the week I was doing extremely well. Collecting lots and lots of pips. However, low leverage and low equity resulted in having hundreds of pips but very little earned. I decided by tuesday to increase my leverage and portion of equity per trade. I made massive returns. Most trades closed at >100%. A few closed >300%!!. It was amazing and I was over the moon. Not only did I break through and return to my original total investments. I blew past it and made 100% return over!
The next week I lost everything, >90% loss. The reason? I knew nothing of economic events and where to look for them or find them. I was lucky and heard of one big news event and traded on it. When the sentiment and news reversed. I had no idea. And given how successfully I was doing with very high leverage and high portions of my equity, I had no risk management. So what ended being one of the happiest and most successful moments in my life, turned into one of most resounding losses and failures. I lost all of my savings as I invested more and more to increase my positions and focus. I started with only USD/CAD and Eur/USD and ended up with over 6-8 currencies.
After that, I decided that in order to continue I must increase my learning to a comprehensive and ordered level. I trade very little with real money as I rebuild myself financially. I am back to a practice account as I attempt to truly comprehend how to be successful. So what have I learned?
Lesson:
-Never ever start on a real account.
-Make sure you are truly successful before starting a real account. Be objective use a proportion like W/L of 80% for example.
-Learning is highly important.
-THE KEY TO TRADING IS THE PSYCHOLOGY AND DISCIPLINE. All the technics in the world won’t save you from getting killed if you don’t have the right psychology and discipline to maintain it. I recommend the audiobook trading in the zone.
-Be patient with yourself and with how you trade! Even though trading focuses on short term trades, your understanding and skills will only build over the LONG TERM, you can lose a lot of money in the short term.
But also take note of the Lessons!