I agree with your comments Turbo even though I personally trade intraday on 1H/15m TFs.
What longer term TFs would you suggest for Kingfish? Are you thinking of 4H/1H or even longer term like daily charts?
Although longer TFs give more reliable signals they do normally require wider stops (Yes, I remember, you donât personally use stops ). How would you recommend someone with limited equity would deal with that?
Although you mention that one benefit of longer TFs is not having to spend hours in front of screens, I think extensive price monitoring can actually be an educational benefit for Newbies who are not so familiar with how markets move.
Love it!!!
Come on Turbo! Confess, [I]you[/I] never learnt on slow speed!!! Surely nobody in germany drives slowly!
are you two trading full time? iâd appreciate if you can share some additional thoughts or lessons learned on how you made successful transition into a full time trader. specifically shall i be trading small lots then gradually scale up? OR just risk a bit more on high probability set-ups?
i wrecked my first car with 15 before i had a drivers license. so yes im not a âslowbroâ
with trading it was similar. started with daily trading with futures contracts and warrants on stocks. then moved to cfd broker (big mistake) and thought that 20 pips a day makes me happy. lost a lot of money. took me quite some time to throw out the entire wrong knowledge from internet and such trading styles out of my head.
yes i completely agree screen time is very important but watching 15 min charts only confuses beginners as the moves at first seem random. and when high impact events take place the new player is completely lost.
i cant really advice kingfish a time frame because everyone has his strategy or TF that fits to his personality. if id have to give an advice id say the following:
dont fix yourself on one timeframe untill you found out what suites you. you have a pair that you watch the most? take this pair and make 3 different setups:
1d/4hours
4hours/1hour
1hour/15minutes
and watch them day in and day out all 3 of them. try your luck where you âseeâ opportunities and at the end of a month (or several months) take a look where you succeded the most or lost the smallest ammount. after every day take a clise look at the daily time frame because the daily is by far the most important one. more important than the weekly or monthly. in one glimps on the daily TF you can differentiate between a market you can trade in today or a market you should not tozch today at all and simply stay out.
to be honest what i learned. and it took me time. is that its not important what timeframe you trade or what you trade or what strategy you are using.
the hardest part to learn is to know yourself your abilities and where you fit in. after you learn that then comes the most important part: learning patience.
higher time frames give you a slow movememt which gives you time to understand and learn better. 98% of strategies and formations and wisdom yoz can come across at in internet or books was written by people who trade in the daily timeframe. pretty much non of these tactics or ideas can be used on smaller time frames.
a double top is way less meaningfull in the 1 hour chart then in the daily TF. flags tennants elliot wave fibonacchi pivot points etc etc they are completely useless outside the 1d TF.
i remember myfirst dozen times when i held positions opem over night. i barely managed to sleep at alll because i had way to big positions open on way to tight ranges/stop lossses. took me quite a while to learn that.
funny thing: now in most trades i do on sole stocks it doesnt even matter for me if the stock is going up or down after i entered the trade, i profit on both directions.
god when i remember how stupid i was 6 years ago when starting and thinking i know it all. god no wonder i fell hard on my face a few times
what was lacking the most was patience. its the most impartant attribute that soneone has to teach himself in trading.
kingfish has such a long road ahead and im sure that pretty every advice he can get wont help him much because at the beginning its a huge overload of information.
the most important ones i can think of right now is
1st. psycholigy (kniw yourelf your natural behaviour) and once you know your natural behaviour find/develop a straregy that enforces and works with your natural behaviour.
if you try strategies of others what work against your natural behaviour you will always fail.
2nd. patience
only then comes reading patterns strategies etc etc money management risk managememt etc etc (those parts are the fine tuning not the basics)
id say to stick to a predefined system that is proven as low risk would do good untill he gets all the knowledge in his head. i suggested the 3 ducks system posten on babypips. you Manxx aswell had a system a few month ago if i recall correctly called âthe blue ribbon systemâ maybe that would be a good alternative. and then kingfish has to work on himself 90% of his way to sucess.
Turbo, those are brilliant posts above and clearly straight from your own experience, which makes their content even more credible. Thankyou.
But!!!
I would like to defend just a little the benefits of trading short term TFâs. It is certainly not necessary to sit staring at screens all day. One can be, and perhaps has to be, selective when one is watching the screen. For example, my day normally goes like this:
My time zone is GMT+2 so:
8:00-9:00 - study previous dayâs charts, overnight moves and check todayâs calendar, decide on dayâs likely direction and move duration.
9:00-10:30 London start - watch screen until signal sets up and enter trade + target and stops.
10:30-12:00 Decide whether to leave trade to take care of itself and walk away, or whether to nursemaid it home by watching and a manual exit if and when necessary.
12:00-15:00 Screens off
15:00 - 18:00 US start - watch screen until signal sets up and enter trade + target and stops.
18:00 -> Watch as long as trade is open then close for the day
That is not a demanding amount of screen-oggling.
Additionally, whenever I am not screen-watching I do not have any trades open to worry about. Also, if I want to do something else in the morning or afternoon I simply donât trade. And if I am away for a few days, I donât have to plan how to handle any long-term trades, especially any that happen to be losing at that time.
The downside(s) of short-term trading has already be mentioned and I agree with that totally.
I think the big lesson here is precisely what you wrote in your excellent post: that one has to design oneâs style and method according to oneâs circumstances and own character and behaviour. There are surely many recipes for the same dish and we each have to find the one that suits us best.
I found this particularly interesting, also. Mostly because I trade same (roughly) the same time-frames as you (albeit actually using volume-charts rather than time-charts, in my case), but my weekly/daily activities are so radically different from yours.
I âalmostâ donât do this at all. I check only whether there are any âfundamental reasons not to tradeâ.
I [I]almost[/I] never âwalk awayâ at all and almost always exit manually.
I admit to doing almost certainly a bit more screen-oggling than you (on Tuesdays, Wednesdays and Thursdays, anyway), but half the time I have no possible set-ups brewing up and am playing backgammon online, posting in the forum, reading/writing emails and so on.
We have that in common (and I wouldnât want it any other way).
Likewise. I used to arrange occasional university commitments for Mondays and Fridays (especially Monday mornings and Friday afternoons), when I could. And I still do the same now, when I can, with all my doctor/hospital appointments (via brilliant, ever-tolerant secretaries/receptionists/nurses to whom Iâm eternally grateful).
When Iâm âawayâ (for 2-3 months at a time), Iâm online much more than I am at home, overall, because I have far fewer other things to do.
Yes, indeed: this is [I][U]exactly[/U][/I] âwhat it all goes to showâ, really.
thanks everyone for the lively and informative discussionâŚ
i told my wife that i will trade full time for 3 months then decided if i need to go back and find a peasant job. now three-month trial (when i have been completely autistic while focusing 200% on fx) is up, the results are so mixed.
signal services sucks, almost blew up my account if i didnât cut down the lot size;
my own trading is profitable, but the sample size & lot size are small, i couldnât reach a conclusion one way or another.
All I can say kingfish is donât rush this. You have an enquiring mind which is great and will help you on your journey. You can be a profitable trader. You will overcome the mental challenge. You will find your edge. You absolutely can trade full time but hereâs the thing, everyoneâs path is different and you have to forge your own path. The time it takes to âget itâ is also not something you can define by giving yourself a limit of 3 months.
Kingfish, the sad news is that you are not by any means alone in your experience and current situation. Based on the large number of hugely enthusiastic newbies that come here, post a few times - and then completely disappear - it is clear that many, many people first decide to become full-time traders and only [I][U]then[/U][/I] start to learn how to trade and find out what life as a full-time trader is actually like and what it requires from you. The lure of financial freedom, the ability to leave a mundane job, the yearning to have all that âthe good lifeâ has to offer, even the romantic image of being a big successful player in the global foreign exchange markets, all draw innocent wannabes into the business before they have established a consistent track record and learnt the business. It is strange that in any other trade or profession such an approach would be seriously frowned upon, afterall, one wouldnât go pulling peopleâs teeth out without first qualifying as a dentist?
You can chose whether you want to [I]âlive to tradeâ[/I] or [I]âtrade to liveâ, [/I]but if you choose the latter then you are opening up an entirely new ballgame. If you are trading full-time then you are constantly drawing down funds to cover regular expenses even when you are not trading for whatever reason and also when you have the inevitable losing streak. If you have a family then the demands are even greater.
Full-time trading also impacts considerably on your choice of trading style. The longer the timeframe for your positions then the longer the delay before you know whether they have succeeded and the longer before you can access the profit.
Full-time trading also demands a lot of time researching and simply waiting for things to happen. For many this is very frustrating and boring. Trading is not so very glamorous most of the time!
Full-time trading requires a large buffer to cover all these difficult periods and uncertainties and to be able to maintain your trading capital at the required level in spite of drawdowns. The psychological pressures arising from living though negative earnings periods and the constant need to perform is an extreme addition to the already significant pressures purely from trading itself. I think you are already experiencing these pressures right now?
Personally, I would advise you to seek a regular income from another source to sustain you during your training period and forget about full-time trading until you have a consistent performance record from a specific, well-defined trading method that you have complete confidence in.
Turbo has already mentioned above that you can expect to lose for at least 2 years. Many other traders (not even full-timers) state that it took 5-6 years to become consistent. Lexys, one of this siteâs most studied and consistent full-time traders traded on Demo for some years before starting. On another thread, Clint, another highly-respected long-term trader here calculated a demonstration of how much capital it takes to produce sufficient ROI to turn professional - its a lot!
If you are very good and learn very fast then maybe you [B][I]can [/I][/B]hit the road on the run, but most canât and donât and since you said yourself that you do not yet have confidence in your own performance then that is a very risky basis on which to even think of going full-time.
I know this is not what you want to hear and sorry if this sounds so pessimistic, but I want to state how I see it so that you get a broader view of what you are facing.
[QUOTE=âborsaci;784379â]either the problem is with your entry points or your stop-losses are too tightâŚ[/QUOTE] Welcome to the site my friend. Where you from?
manxx, thank you for the extremely well thought-out post!!
have been going through tons of self-debate on this. of course the ideal option is to find a job and keep honing my trading skills. the only concern is that i may end up not putting in enough effort on forex and eventually falling into that frequently quoted 95%. i have been working 90 to 100 hours a week on forex in the past 3 months, screen time, reading, post mortem, etc. believe me, jobs in my career field wonât allow more than 10% that level of effort, though i understand in forex, working hard doesnât equal to trading well.
the other option is to find a mindless part time work, i.e., uber, coffee shop.
Indeed ⌠people very widely under-appreciate the time-commitment/educational-phase required to make a living from this. [I]You[/I] clearly havenât, though.
As Manxx mentioned above, I was actually on demo for 4 years, myself, before trading with any real money. (Admittedly, that was partly because I was âunder-ageâ for live trading, at the time, but still ⌠with hindsight I needed it, though it didnât always feel that way at the time!). And it was another two or two and a half years [I][U]after[/U][/I] that before I was making profits steadily enough to be making what most people would call âa decent livingâ.
For what itâs worth, I always feel that itâs terribly easy both to overestimate what you can achieve quickly and to underestimate what you can achieve slowly (that last partâs the âbetter newsâ, in the long run!).
I totally understand your problem, here: âgoing back to workâ reduces the time available for the learning-curve needed, and makes it all seem that much further away. There just isnât an easy answer.
(I thought Manxxâs post above was outstanding, and I hope itâs helpful with your deliberations. Good luck!).
great post manxx. theres always a âbutâ isnt it
i didnt attack short time frames trading. i only pointed out that it isnt more or less profitable then long timeframe trading. your day routines are very interesting but nott my style.
because out of 2 reasons:
1st. i have my business i need to manage so i cant watch charts all day
2nd. i dont want to watch charts too long.
to the second point: there was a time i watched charts 15 hours a day. the only thing i realized is the boredome with it and the result of many factors were i immagined good opportunities and was tempted to constantly act in the markets and constantly over trade. i was never able to overcome that obstacle. not even now.
but i changed my weakness into a strength. i came to terms with the fact that i always want open positions 23/5 and learned to benefit of it.
my trades last days/weeks so im constantly in the market with something but with longer traders.
my strength is to analyse instead of following a system. analysing is impossible in smaller time frames than the daily. i switch to 4 hours (smallest time frame i use) to find good entry points. on the daily i find the trend and the direction.
everyone has his/her own ways and theres no better or wrong or right way as long as it yields profits everything is ok.
my day looks like this:
i wake up around midday (11:00) or so and check what happened on the opening of frankfurt/london and in the asian sessions.
then every 4 hour candle i take 15 minutes before it closes to see what happened on my trades and my anticipated trades (opportunities which are developing and potential future trades). and thats it. i dont look at charts longer then 1 hour a day.
on the weekend im doing my analysing away from âmoving pricesâ since weekends everything is closed i can concentrate to analyse the trends and directions (several hours on saturday and sunday) and set a plan for the next week/month and note dowm which securities are to be traded or observed connected with fundamental data coming out within the next week/month and taking into consideration a lot of fundamentals from the previous weeks.
draw my support resistance lines. trend channels. insert datas for what days there are high impact news. etc etc
and thats it. monday-friday i only manage my trades on behalf of what i set on the weekends. most of the time i dont need to change anything on the chart. for example on the brent chart i didnt change anything since months simply because nothing is changing. it has its support resistance areas inbetween which its constantly flipping directions of several hundret (sometimes 1000+ points) and the only thing im doing is sitting and observing what its doing when it reaches one of these lines. reverse or continue. and then i enter a trade. the rest im only managing open trades and potential future trades and doing my scaling in to profit as much as possible from a trend im already in.
scaling in is the greatest tool someone can have. once learned correctly it yields you huge profits with minimum risk. a trade of 1:4 R/R Ratio is becoming a 1/8 rr trade in the same timeframe etc. etc.
you saw some of my charts in my trading thread âturbo tradesâ those are so to say scaled in pictures. if you zoom out it looks like this:
inbetween those lines i find entry points and take profit points. the next stop for brent is between 46.5 and 45 if it turns around in this zone it will go to 60 till xmas and thats 1500 pips. with scaling in, this potential future trade yields 4500-6000 points profit.
the last 10 days in brent i did not know where the direction it going to be. it was 50/50 so i set up a strangle/straddle trade which unfortunately did not get triggered. if it would have gotten triggered id be by now in profit of 160 points⌠without even knowing or caring what the direction of the trend/movement would/could be.
heres the straddle/strangle trade: post number 137
OK Kingfish, I greatly admire your persistence and determination as well as your dedication - all excellent and essential characteristics for a traderâŚ
So, if you are going to have a go at this then I guess we have to give you all the help we can!
Firstly, I think you have to put your charts and forex stuff well on one side and do a serious analysis of your financial requirements for the next, say, 12 months:
[B][U]Income requirement:[/U][/B]
Use a spreadsheet or similar and set out all your familyâs essential costs and your overall income from other sources. We donât know anything about your family financial situation but you will need to prepare a family âprofit and lossâ in the same way that your mortgage lender would need if considering a house loan for you. Ăf your overall family earnings donât cover your expenses then you can calculate the minimum amount you need to earn from your trading and the frequency with which you will need to be making withdrawals (not forgetting that the taxman will also be interested at some stage, but lets earn the money first! ).
On top of that essential minimum earnings you can now establish how much additional income you would need to make life enjoyable and achieve those extras that make life âworkâ. Donât also forget that items like cars, washing machines, etc donât last foreverâŚ
And then on top of that, it is essential that you plan an excess earnings amount to build up your capital base to facilitate increasing your trading size. Without that your trading capital will start to stifle your ability to expand.
[B][U]Capital requirement:[/U][/B]
You available capital has to cover at least two things:
your margins and a large enough buffer to absorb the interim minuses on your open positions (which is partly defined by your trade money management and risk exposure, e.g. max number of open positions x max stoploss etc).
how much capital to cover your expenses over, say, a 2-3 month period when you do not reach your trading targets or have a nil or minus month - or are not trading for reasons like holidays, sickness etc.
Once you have gone through these two analyses you will know how much you need to make per month and whether you have the capital available to sustain your trading through the lows as well as the highs.
Once you have a clear idea of your income requirement then you can start to consider what kind of trading model you will need to produce it based on position size constraints, risk exposure parameters, timeframe considerations etc,
At the same time ( :D) you can think about whether you are primarily an indicator person or a Price Action or a combination of both. Once you are clear about this part then I am sure there are people here who will gladly advise on method setup!
Another axiom that I think is well worth remembering is that a good trader can succeed even with a mediocre method but a poor trader will not succeed even with the best methods. The point being that consistent success depends more on [I]your [/I]personal skill and proficiency as a trader than the type of method you are usingâŚ
not sure if you are suggesting i may get to trading consistency in the next 12 months. im certainly flattered. that would be the 2nd shortest time commitment i have heard so far, which range from 8 months to 5 years.
certainly not looking for getting rich quick scheme, otherwise i would just fund a micro account buying a whole lot, go big or go bust. i suspect lots of young folks doing it that way thus all the account blow-up chats. with my speed of wealth destruction, it would take quite a while to achieve that distinction:18:
my budget shows that i have another 3 months expense saved up. still can dig up more but thatâs all tied up in stocks.
to switch topic a little bit, if you donât mind. since we trade the similar TF, how do you decipher the overall trend for scalping purpose? if i look at the cable daily chart, 5, 10, 20ma all point to different directions, flat, up, down.
was thinking about sending you a pm, but i havenât post enough to qualify the pm function.
No, I am [I]not [/I]suggesting that at all! In fact, my opinion was that you should not attempt trading full-time at all until you have all the components in place and functioning. I.e. trading method, capital, risk/reward and money management, etc,etc.
I live up here in the North countries and winter is approaching. If someone said to us that they are planning an expedition to the North Pole now then we would say that it is not a good idea, wait at least until the spring. But if that person says that he is going to try it anyway then we would at least try to give our best advice and suggestions about how to plan it and what to take with him to give the best possibility of succeeding against all oddsâŚ
The only reason why I said 12mths is nothing to do with your trading success. I was talking about your business analysis plans and in particular your Cash Flow and Profit & Loss. Every company needs a written plan that identifies their forthcoming costs and expenses - and how they will be financed. If you are going to try and trade full-time then you also have to plan and think full-time. This means it is not sufficient just to trade and see what it looks like at the end of the month. There is also no point in any of this if you make a small profit for two months and then your quarterly bills arrive and there is not enough to cover them!
A 12-month cash flow analysis will tell you what payments are coming up in which months and also how much on average you need to make per month to cover a full year - i.e. what has to be your minimum âannual salaryâ equivalent to even survive.
This is the core difference between trading alongside a job, where you can experiment, test, lose, gain etc and it does not matter how little of much you make provided you donât blow it all - but the moment you go full-time then you have to make [U][B]at least your minimum âsalaryâ[/B][/U] before you even start to make any extra!
I havenât even started to talk about your trading methods and probablilities of success. You have to get these targets clear first so that you know exactly what you are taking on. Three months buffer is not much at all. I could imagine that your minimum âsalaryâ will be at least around 2000 per month. In any trading month there is realistically about 12-15 actual trading days, so you need to target earnings of around 150-200 per day every single trading day. And when you donât make that on one day, then you have to make up that shortfall on another day - that is extreme pressure on a new trader!!!
So, what I am saying is that, before you think further about full-time trading now, work out these figures and decide is it really feasible. If you still think so then we can move on to helping with your trading methods
You are at a crossroads here. I am [I][U]not [/U][/I]saying you will be a consistent trader in 12 months - what I [U]am [/U]saying is that you will [B]have [/B]to be a consistent trader before your cash runs outâŚ
hi manxx, i really mean that sentence in a facetious way. 8 months or 8 years, nobody really knows. itâs like a trade.
have ANOTHER 3 month of living cash committed in this biggest âtradeâ of my adult life, probably. :51: . but just like trading, i need to think about the risk. i certainly can dig up more fund to buy more time, but my âlot size or slâ in this âtradeâ would also be getting bigger. thatâs why advice from you and everyone contribute here is so valuable.
money aside, there are other considerations as well. for example, here in the States, employers tend to bias against folks who are out of job for too long.
Exactly! But what is certain is that there is no natural law either that states that you [I]have [/I]to lose for a certain period before you can be profitable! There is a reason why it takes time and that is because there is a huge amount to learn about (at least) four major areas:
how markets move
what trading method to use
how to manage risk, profitability and capital
how to manage oneâs own patience, psychology, character, etc
Since there is no standard schooling to go to (except maybe the BP school!), most newbies inevitably learn this stuff individually in a totally haphazard manner, and mainly by finding out firstly what doesnât work - and that inevitably means losses! How long it eventually takes to reach the âbreakeven pointâ in learning is very individual.
But there is one small, but very bright diamond shining through all this heaviness: You have actually clearly and significantly [U][B]outperformed [/B][/U]all three of those signal services that you subscribed to !!! Think about that for a moment - you made a profit from your [U][I]own [/I][/U]trading for these three months. That is one big achievement no matter how small the numbers were. As it happens, the fact that your results [I]were [/I]small is even more positively significant beause it shows that you already have an understanding of risk and didnât just âbung it all on the redâ and see what happens.
You have all the right attitudes and you have all the right character traits of controlled ambition, persistence, determination, objectivity andâŚa longing to trade. I am sure you have all it takes in personality terms to be a successful trader, but you do not yet have professionalism and confidence in handling the [I]tools [/I]of the trade. And gaining that is not difficult.
This is why I would hate to see you end up blowing all your spare capital by taking on too much too soon and ending up with neither capital nor a trading account and a big chip of frustration on your shoulders from what âcould have beenâ. If you could only find a way to trade alongside a job income for a while then you would be free to make mistakes, develop your style, build your confidence, build you capital⌠and then the big step into full-time trading with at least the tools and the knowledge of what you are capable of.
But donât just listen to my reservations., Iâd hate to be the one âthat got in your wayâ!
). How would you recommend someone with limited equity would deal with that?
