Pipcrawler's Thoughts on Setting Newbie Expectations

Here’s a repost on my thoughts of newbie expectations on the process of becoming a trader:

Let’s all remember that trading is a skill, and to reach a high level at any skill doesn’t happen overnight. Period. For example, how long does it take to become a doctor, musician, or sports figure at the professional level? Years right? I’m pretty sure Michael Jordan (the greatest basketball player ever, IMHO) wasn’t championship material the first time he picked up a basketball, was he? I don’t even think he was good enough to play on his varsity basketball team, but he had the drive and passion to learn and master the fundamentals, practice, improve and learn/practice some more. And after seven years of hard work in the NBA he won his first of six championships…Even then he never got comfortable and continued to learn new skills to add to his arsenal. Same thing with musicians and doctors. How many hours do you think Miles Davis practiced the same bebop scale to perfection, or a surgeon cutting into cadavers to hone their technique? The hours of practice are probably countless.

Success in anything, especially trading is the same thing. You’ve got to learn, practice, and make the efforts to improve. And the reason why I compare trading to these different fields is because I see it as an art - where its not an exact science and every moment is different. Micheal Jordan didn’t play against the same 5 guys his whole career, nor had the same teammates. Every song Miles Davis played didn’t have the same chord progression or melody. And every patient in some way or another is different than every other patient a doctor may see in their career.

This is why it is important to learn and master the fundamental skills of trading. Learning and mastering the fundamentals will help you create a plan that you understand and works for you, and it will help prepare you to quickly react and adjust to the infinite amount of situations the market will throw at you. And it doesn’t matter what your style of trading is (whether it’s discretionary, systems, fundamental, technical analysis), the environment is constantly changing and you WILL have to make adjustments to your system or methods periodically.

Someone once said, “Much like anything else worth doing life, time and practice brings experience and wisdom.” Forex trading is worth doing, you just have to have the patience and drive to consistently improve, no matter how small, day by day. Put in the work and over time you will see success…

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Good one Pipcrawler at the time of reading that post I felt it
should be a “sticky”.

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I really like your post and just wanted to add a few things. I am new to forex myself, but I read as much as I could over the past year before I started to even ask questions. Maybe it’s just me, but I like to try to learn everything I can before I start asking questions. This is not to say that questions are bad…I’ve seen some really good ones here, but I’ve also seen some that almost seem like someone is trying to make a joke by posting them. To continue with your analogy, it would be comparable to:

  1. Someone wanting to be a basketball star but has never played asking, “What is the best basketball to buy? How do you beat the Lakers? If I shoot the ball 40 times will I win?”

  2. A medical student asking, “What’s the worst disease? What’s the best suture to use when you do an appendectomy? Do white pills work better than red?”

  3. A first-time music student asking, “What’s the best note? Is it better to play a song in the key of D or A flat? Which do you think is better, Jazz or Classical?”

This is a great community and I know there are many people willing and eager to help people learn. As newbies, though, we need to try to ask relevant, meaningful (even answerable) questions. Just my opinion.

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Thanks for the comments and opinions!

Yes, questions are great, especially if you ask the right ones relevant to your situation. Asking questions like, “what’s the best indicator?” or “Is ‘xxxxxxx’ the best system out there?” is like asking Tiger Woods, “what’s the best club to use?” or asking Micheal Jordan, “Is the triangle offense the best way to win a championship?” Someone new to golf wouldn’t fully understand why one club was better than another, nor would a new basketball player understand why the triangle offense worked great for Jordan and his team, but not so much for anyone else. You have to start from the basics to understand the bigger picture.

And the basic goals of a “newbie” should be 2 things:

  1. Understanding Yourself: Ask things like,
    “How comfortable am I with the possibility of losing money?”
    “Why do I want to learn how to trade?”
    “Do I have the time and resources to enter this business?”
    “How emotional am I?”
    “How do I react to stress?”
    “Will I take the money and run as soon as I see profit?”

Understanding yourself and your limitations is a basis that will help you define your risk tolerance/money management system, an analysis method, and execution method that would be comfortable for you.

  1. Understanding what the market is and its movements.

After you go through the basics of the what the market is in the School of Pipsology, you’ll then need to gain a broad knowledge of what pushes prices up, down, or not at all. And I say “broad” for the reason that the market environment changes, and what moves markets today, may not be the same reason tomorrow.

This will be the basis for moving on to the next step, understanding the tools of trading (a lot of which can be learned in the School) and not just know them. I’ll write more about this in my next post, but for now, take is slow newbies, learn and improve day by day. Observe and record what you see and your thoughts, and eventually, that light bulb will click. :slight_smile: Good luck!

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I think that to be a great trader the person has to be [I]inquisitive[/I]. It amuses me (no, it actually pisses me off, but since forex is a zero sum game it’s actually a good thing) with the crowds blindly following advices that they don’t even bother to try to know why that is.

An example is the famous reward/risk ratio. Some say that 2:1 is good, others say that 3:1 is better, and so on. It’s NONSENSE. Think about it, there’s no logical base whatsoever to set these ratios without first considering the whole system. A trade system could very well have a reward/risk ratio of 1:2 or even 1:3 and it would still be perfectly plausible since it increases the rate of winning trades but decreases the rate of pips you make in each winning trade.

This is just an example, there are many more but i don’t have time now. My point is, be inquisite, don’t believe ANYTHING you’re told about trading before first trying to think [I]for yourself[/I] why X or Y advice makes sense or not.

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Hahaha those sound like the ten commandments of forex. If you answer all those questions are you promised to be a winner or something? Those sound more like I want to be a better person help me help myself. If I took those question seriously as a beginner all my answer would be no.

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Unfortunatly I am, very very curious. I can take somthing as a given for a short period of time to get my feet wet but overall everything I’ve been told/read about will come into question. I don’t truley believe anything untill I can prove and understand it. This is the reason it took me so long to seriously look into forex and start learning in the first place, sounded too good to be true. I did find a real answer, it wont make you rich, its a job, and it takes A LOT of work to get close to beating a savings accounts ROI!

Anways I do like this thread!! I wish I had read somthing like that when I was starting out so I could have aloted appropriate resources for this career I’ve chosen. I’m still going to make it, infact I’ve noticed my personality changing dramatically, how I handle stress, etc…

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A traders world will always be a traders world, don�t forget that you must add up your experience, your knowledge, your skills, your political views and most important you broker. Once you make a salad of that and take your time, sometimes more than you expect.

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Simy…unfortunately, there are no promises in trading…sorry! Again, IMHO, trading is an art and not a science. There’s always some degree of uncertainty and all we can do hone our trading skills to manage our risks and avoid dumb, unnecessary mistakes. :slight_smile:

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Here is a promise: Overall I’ll make it, I may not make myself rich but I will allow myself to live off of my trading. I’ve got time to learn… Now that I know I need to learn alot more (I can probibly learn 50* more then I currently know about forex, and I feel I’m far from a newbie!)

On the flip side, I like being able to learn more and more, its a challenge as much as it is a career. I could have been a doctor, or lawyer, but I think I’ll be happier not having to deal with people when I dont want to :wink: I’m not anti-social, I’m anti-stupid… woe are my peers… :confused::rolleyes:

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I guess that is the idea to be able to live of trading, that�s when you know that you are very good or should I say a pro. But until that day comes stick to your day job, especially in the market continues to fluctuate the way it is.

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Currently I work just enough to cover my cost of living, no expensive thrills, and dropping all needless expenses. This allows me to keep more time available for trading and learning to trade. Its kinda boring but there are plenty of free things to keep ones mind/body busy… I’ve picked up bicycling again as a hobbie/mode of quick transportation :wink:

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Yea that is very important seeing what happens in the market does take time and usually time away from your loved ones. I only spend time in the market when my daughter is in her dance class other than that I prefer time with her than + pips. All the money in the market can�t buy time with my daughter.

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I dont have children (have had close calls but…) So I dont have to worry about that, I do babysit for a friend when she works (shes currently temporarly dissabled) and when I’m watching her I don’t use the computer at all, I trade when shes at school or sleeping (although I typically goto sleep when she finally manages to goto sleep :wink: )

But I havnt been doing that recently… I spend a large amount of my free time with my boyfriend (including when there are no setups worth watching) when I dont/shouldnt watch a pair etc… so I do still spent a lot of time with people I care about. When you think about how much time you loose with a 9-5 type job I spend considerable more time with people I care about then that, even more then only working 20 hours a week. I spend just as much time learning as I do looking for trades, and I probibly only spend about 6 hours a day using my computer for forex related purposes.

But I do understand what your saying :slight_smile:

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Hey i’m newbie too! I started learning about forex in 25th august, 31 days ago, but my learning curve has been rather exponential, and i mean really exponential.

Since my beggining on forex i’ve faced it with a completely open, yet inquisitive, mind. I already knew that the holy grail systems wouldn’t work if i didn’t have my act together as a trader. In fact, it’s been only a few days ago that i’ve started looking for a system/testing/building one. Until then, i’ve been readin for 8+ hours a day everything i could find about forex (also downloaded a bittorrent package on trading of 500+ ebooks -2GBs of trading ebooks only-, including all the classics, but of course haven’t read most of them yet…), and boy i learned A LOT.

I started working on myself first because i knew that no system works if the trader isn’t good enough.

As Pipcrawler said, trading is an ART. I like to compare it to martial arts. The beginner will want to know all the killer moves and techniques, but no matter how good the moves/techniques are, he won’t be very effective using them because he doesn’t have enough experience yet. The same technique, if used by a white belt and a blackbelt, will have a major difference in effectiveness depending on who uses it and what’s his experience level in the martial art overall.

It’s exactly the same with trading and trading systems. We can’t expect to make a killer at trading/forex even if we have the best system in the world, for the simple reason that we aren’t good enough yet as traders, overall. And to get good at it we will have to read a lot (in the beggining) and practice a lot (after a good knowledge base has already been established).

I got to the practice path now, i’m sure i’ll slowly but consistently get better and better at trading until i become one of the top forex traders, and then you guys won’t have the honor of reading my posts anymore because i won’t care anymore about you underdog newbies :wink:

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I like the way you said that last line… :smiley:

I’m intrested in that ebook collection, whats the name or what can I search for etc?

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I downloaded it from demonoid when it was still up (maybe it still is but i can’t access it from my country), the name of the file was plain and simple: “stock market books” (all books on trading, though, and a few of them on forex).

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Crawler,

I am glad you took my advice to make this a sticky. People seem to be taking my advice more and more, which is exciting and scary. I try to keep my advice sound with common sense, but even I delve into emotions and opinions sometimes. Anyway great post.

For all the newbies out there, this is required reading :slight_smile:

Kudos

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Simy I think that a forex trader never really learns everything there is about forex and especially about the trade view or perspective. The market has many different variables and there are also that many indicators and just as many brokers. If you add all that up that is a lot of education.

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Very true Stanely… that’s why I’ve always said that I have been a “student” of trading for the past 10 years, and in another 10 years, regardless of how successful I may become, I will still be a “student” of trading…the markets will never stop changing and we can never stop learning!!!

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