Honorary Member Q&A: o990I6mh

[B]Magnus a.k.a o990l6mh[/B]

1. How long have you been trading and how did you get into forex trading?

My first contact ever with forex was, I think, back in 2006. At the time I felt left out since many of my friends played online poker and I simply couldn’t see the fun in it. During some aimless web surfing I stumbled across some trading platform and for some reason or other I registered for a demo account. I think it was MBTrading but I’m not sure and it doesn’t matter.

I had NO idea what I was doing. Literally, I remember I had no charts up, just the quotes and I sat there for maybe 10-15 minutes and just punted wildly at the buy and sell buttons. For a few minutes it worked but then price started ticking against my positions and the demo account kept shrinking. No fun, so I quit and continued surfing around.

That was my first ever contact with forex trading.

Two years later, in early 2008, I came into contact with forex trading for real. I had been looking at different ways to make my money work for me instead of just sitting in a bank account. I got close to entering the stock market but then I came across some retail forex websites and I started reading more and more. I was very attracted by the concept of leverage allowing a small retail trader to take positions that were anywhere from 10-200 times larger than one’s account size. Mind that this was before I understood anything about risk management and position sizing. I was, to say the least, very green in the spring of 2008.

In the fall of 2008 I started demo trading and since then I just never really quit. In May 2009 I went live.

###2-3. What’s your most memorable trading experience? Was there ever a time when you suffered a huge drawdown and thought of giving up? How did you get through that phase?

My most memorable trading experience is without doubt one I never want to experience again. It’s difficult to describe a feeling and even harder as English isn’t my native language but I’ll try:

It happened shortly after I had loaded up my live account a bit for the first time and I thought I was invincible. Naturally I decided to scalp with huge positions… A few times it worked, sort of - I managed to collect a few measly pips or I got out at break even after experiencing nerve-wracking drawdowns. Of course that alone should have been enough to show me the folly of my behavior but no! Another trade and suddenly the drawdown just kept getting bigger and bigger and soon my stop loss would get hit for a big loss. I couldn’t accept that of course so I did the only wrong thing and removed my stop loss. The trade then merrily proceeded going against me. I ended up losing something like 60% of my account in that one trade.

While I was in the trade my heart rate and emotions were probably much the same as that of a mouse backed into a corner by a big cat. Helplessness, knowledge that I should cut my losses but freezing and just watching it happen, a real feeling of being sick to the stomach, I felt a lot of things.

Afterwards I just felt one thing - such disgust with myself that it’s hard to describe really. I had long debates with myself on how it could be possible for me to have been so stupid and to do the very thing that I had previously sneered at when others admitted to having been through that particular emotional hell.

Believe it or not but that was not just the most humbling experience of my forex trading to date, it was actually one of the most humbling experiences of my life. It’s an experience I never ever want to relive, but it’s also one I would not trade away for anything.

I did come very close to quitting but my pride stopped me. I’ve never been the type to give up and I simply could not look my wife in the eyes and admit that I had failed and given up. It was not an option. The money amount was nothing to worry about but my pride, that was another matter entirely. I slowly licked my wounds and stopped live trading for several months. I had no choice. I had to go back and deal with the reason that had made me behave so stupidly. That’s what I did. I read several trading books and I read thread after thread to learn more about trading. I also did something else which I believe was vital – I went to work on the mental components.

###4. What’s the most challenging part of trading for you?

For me the most challenging part of trading has been keeping out all the noise that is all around you. So many ”experts” of all sorts wanting to share and teach. It easily can make your head spin. One piece of fundamental data says this and a trendline or something says the opposite.

I guess it’s often called analysis paralysis and it’s something I’ve had to battle. As you find your own path it gets easier.

###5. When would you say a trader is “successful”?

This question is quite difficult. There are many different ways to answer it.
For me, a successful trader is one who has a track record of at least three consistently profitable years with a total of at least 100 trades using the same approach.

###6. Do you think anyone can become a successful trader? Why or why not?

My view is that most (not all!) people could become reasonably skilled traders with the right training . However, and this is the BIG caveat – retail traders do not generally have access to that sort of training that professional traders in banks, hedge funds, etc receive through their companies.

Without that it’s a whole other ball game. It’s my belief that relatively few people are able to teach themselves to become successful traders. The reason is two-fold: difficulty in finding the good information and, more importantly, a lack of mental stamina, aka stubbornness.

###7. How does your personality match your trading style?

I work a full time day job which means I nor can or wish to watch the charts all the time. As a result I’ve had to make my trading fit into my life and not the other way around. I work only with limit orders, aka set and forget, and I only have to check the charts every four hours or so. Personality-wise I’m more of planner than impulsive, so this sort of approach works the best for me.

###8. If you could give just one piece of advice to newbie traders, what would it be?

I have several pieces of fairly good advice, but if I can choose only one this would be it: Learning to trade is not a sprint, it’s a multi-year marathon. Don’t give up.

###9. Describe your typical day as a forex trader.

A typical day for me starts in the evening, around 2100-2300, when I look through the charts and pick out potential interesting pairs that go on my watchlist for the next day. I also manage open positions and, if warranted place limit orders.

The next day I check the charts in the morning before work and then around late 10AM, in the afternoon and after I come home. If I see a valid setup I place a limit order that may or may not trigger. That’s all there is to it really.

###10. Who’s your favorite FX-Men?

Out of all the FX-MEN there’s a special place in my heart for the honorary FX-MAN Tymen. I had the good fortune of coming across his thread at a point in time when I needed to find a base to build from. He provided that for me and since then I’ve come to respect him greatly and I’ve also continued to learn from him. I may not agree with all of his views and I may not trade exactly like him, but I have enormous respect for him and the honesty he represents.

From the Babypips “staff” I enjoy reading Big Pippin’s, Pipcrawler’s and Jack the Pipper’s blogs. The first two for their sound approach to trading and the latter for his interesting views on different topics.

Could you share with me what type of result someone with your experience might expect. I am new and can’t really tell from reading blogs if this is really more of a hobby with most everyone or if it can pay off financially. I would be willing to put in great effort if I stood a reasonable chance of making real money. I hate to invest that time if I don’t stand a chance of being financial rewarded. I thought I would ask you since I notice you have a full time job as well as trading income. I would appreciate any advice you could offer. Thank you!

Hey Harry!

Sorry I haven’t answered quicker.

The frustrating answer is that the results are highly individual. However, if you know what you’re doing and have a day job that allows chart checking every now and then, you should be able to make 10% or above monthly. There’s potential for much more than 10%, but if you can just get that kind of return then compounding will do the rest.

Most traders that try end up failing. Imho most people, not all, but most people could learn to trade profitably. Most quit long before they get there though.

Looking around forums you will not see that many that claim to make money and many of those who do are liars. However, don’t let that fool you. The thing is that those who start making money don’t make much fuss about themselves.

On this forum for instance there’s the Alternative Technical Templates threads. I have no doubt those guys make by far the most money of all the traders on BP, but they don’t talk about it. Successful traders certainly do exist and you can be one of them.

Good luck and take it slow at first.

Thank you so much for your answer to my question. It sounds like the opportunity in Forex trading is the same as all other opportunities I have found throughout life. A few brains and a tenacious commitment to learning and working hard yield an almost certain amount of success. Thanks for letting me know hard work will probably pay off.

May you enjoy great success!