What Every New & Or Aspiring Forex Trader... Still Wants To Know

lazydogs · August 26, 2011, 3:19pm

great story Simon, thanks for sharing. I for one, enjoy reading your posts, you always provide valuable insight and information to those of us who are new to Forex

SimonTemplar:

Yes, big drop on GBP/JPY this afternoon. I was in a Short, so nice way to end the week for me, but the Japanese PM going did speed things along!

No problem at all sharing my background, if you’re interested. I am full time at this (at least insofar as it is my principal income), but have not been at it as long as people on here might assume - I have been trading nearly two years. I had a previous career for ten years following university (unrelated, though - British Civil Service), then stopped that a few years ago to run our own own business (again unrelated) and be around more as kids had started turning up (we have three small boys). My wife suggested Forex trading to me a couple of years ago, she has a ‘proper’ career with a big blue chip company (hence when kids turned up it was my salary we cut to develop our business lol!), has been there 15 years since uni. We wanted to give me a new challenge, give us a fallback should Mrs Templar ever want to leave work, and bring in a good chunk of money to have a nice lifestyle while we were (comparitively!!) young and had the kids around. We hoped that I might have some aptitude as I travelled a lot with my first career, worked in and have always followed international politics, speak some languages so have always followed currencies and international events, and my wife’s work gives us access to a lot of quality market analysis. Through my first career I worked alone a lot, including overseas, so had learned to rely on my own judgement and make quick decisions. I’m a pretty analytical type, so we thought it was worth a punt.

To answer the trading part of your question: I went a route that is sometimes frowned upon on this site and went on a training course. I then took a year’s coaching with the same training provider. We were fortunate in that, because we have a pretty hands off business, and my wife has a corporate salary, we could afford for me to put in full-time hours to my trading right from the off, knowing that I would not be profitable right out of the box but that this would be the fastest route to finding out whether I could make a go of this long term. So we were able to pay for the training/coaching, fund a trading account and have me not produce an income for a while - I am very conscious that this put me in a very unusual and lucky position. We decided to give it a year and take a view then on whether the idea had legs. We have made various other investments over the years, mostly in property, and not all have worked out, although overall we have been lucky. So we treated it like a business from the outset, noted all the expenditure and decided how much time and money we could invest before we would want to see a return or pull the plug.

The first six months were a steep learning curve. The course and ensuing coaching meant that I did not make as many missteps as I might have had I been self-taught, and meant that I probably got to a higher level more quickly - initially, I just traded the strategies they taught me. The flipside is that we had invested a few thousand at this point, when you tot up the tuition, my trading account and my time. I made all the usual rookie errors, some of them several times, and lost money in five of my first six months, I was losing a few hundred (GBP) a month on my trading. Struggled a bit with the psychology, found myself pulling winning trades early, while losing trades would hit my Stop as I desperately hoped that they would turn around. I overtraded, too, quite badly at first - risking 1% per trade I could still be risking 6-7% at a time if I had too many open trades. I also traded too many variations on the strategy all at the same time.

Then slowly I learned to focus on only a couple of the strategies taught, execute mechanically, not let losses get to me too much, limit my market exposure at any one time, stay out of the market if I felt it was unclear - lots of other things, too, that have been discussed on this site. I have made most of the mistakes at one time or another. I never blew an account, and never lost my overall faith that I could turn it around, although there were a few bleak moments… I was obviously very fortunate to have a wife who was prepared for me to take a chunk of money out of the household finances without any guarantee that I would be able to put it back, and then fund us on a day-to-day basis while I figured it out. Trading took a lot of my time out of our regular business (my wife has a career job, after all), so I used to feel pretty bad on a Friday evening, reporting another week of losses. My coach was invaluable at that point in keeping me focussed, improving me, telling me which bits were good and which bits were terrible. I told him early on that I am a big boy, I would rather he be blunt. And he often was lol! For a while, his favourite phrase seemed to be ‘why did you do that?’.

I did notice a steady improvement while continuing to lose more often than I won, then after the first four or five months it suddenly clicked. I had lost a few thousand in bad trades, but we were fortunate in being able to seed my trading account again at that point sufficiently well that we were optimistic, once things had clicked, that I would be able to make the money back on a sensible timescale.

Sometimes I look back and kick myself for basic errors I made. For instance, I started with a £5000 account, so was risking £50 per trade. So the learning trades were costing us real money. Would have been less painful, perhaps, to risk £10 per trade on a £1000 account. However, I am not sure that it would have worked as well for me, as I learned an enormous amount from that period, my psychology basically started out on the right path. I have always needed a little pressure to perform best. I never bothered with demo trading for that reason - figured I would treat it too much like an arcade game.

Overall I am very happy with the route we took, delighted with it, it has been life-changing. Although it was very character building, all of the dark moments help me now. I make a nice income from Forex, I sit down to trade confident that I will be up on the month, and although I don’t enjoy losing trades they really don’t get me down. I was 35 when I started, I am 37 now - I have a long time ahead of me in Forex, and it gives a very good return on investment. The losing period of my Forex career was only one summer. My gains now are dwarfing my losses then. Which is why I often pop up on this site encouraging people to stick with it, as I do believe that with a lot of hard work (I have put in some serious screen time) and a bit of a feel for it there is nothing to rival it for freedom, flexibility and return.

This is also why I occasionally champion training courses on this site - we all learn in different ways, but I was a profitable, full-time trader under six months after I first took a course. Prior to that course I knew nothing! I still trade the strategies I was taught there, with a few extra twists that improve profitability that I have picked up along the way.

Apologies for the appalling ramble, I might have broken my own record. Just thought that if I was going to answer that question it made most sense to give a full answer!

(Anyone not interested, apologies for the lenth of this post, just skip it and apologies to ICT for hogging such a chunk of this page of his thread.)

ST

couriermike · August 26, 2011, 5:05pm

I didn’t realize the significance of the GDP downgrade from 1.3% to 1%. They said on the news today that 1% or lower is a ‘recession predictor’.

MCAWally · August 26, 2011, 6:40pm

Quite right that ICt_Macro_pivot is very very wrong on the Weekly by 650 pips and approx 50 pips off on the Monthly.

Wally

kenny10pips · August 26, 2011, 6:46pm

yes it is nice to hear your story as to using some one that is the route i am getting ready to go as having some one who can help disect your emnotions that I think are hard to do over emails and such is a priceless commodity. The thing that I have learned most from here is all the different styles there are and not to totaly accept my instructions nor instructor and the “gospel”

akeakamai · August 26, 2011, 7:05pm

I’m sick of trying to work trading around my stupid full-time job. I can’t compete. I miss entries, I can’t manage my trades and I don’t get enough sleep. Maybe you guys can do it, maybe you got that drive in you to compete against FT professionals, but I don’t. Not anymore.

I quit, I’m done, I’m leaving. Bye

Good Luck to you all :41:

My Tombstone:

Net loss to FOREX: $16,244.80

SimonTemplar · August 26, 2011, 8:42pm

Seriously? Don’t quit. You are a great contributor around here, and end of day trading alone can net a nice income and work around a day job.

ST

SimonTemplar · August 26, 2011, 8:45pm

Thank you for the feedback. I would certainly agree that there are many different approaches to Forex trading, and most of them can make money. One of the appeals of Forex trading is that it can be a very individual achievement when it clicks. The main thing is, listen to a range of opinions, then do what you think. At the end of the day, it is your money on the line, after all.

ST

SimonTemplar · August 26, 2011, 8:48pm

Thank you very much for the positive feedback - genuinely very much appreciated!

ST

Manta · August 27, 2011, 12:46am

Don’t give up. Your posts in this thread are great. Try to find 1-3 trades per week and catch the main weekly movement and you dont have to watch charts every minute or hour. Or take a break for a while or trade demo until you are able to double demo account in some period.

It is so easy to give up something…

I personally do not watch any timeframe smaller than H1 usually only 2x-3x a day and still was able to make around 500 pips on 4 pairs just this single week. You dont have to really spend you life stucked to your computer and 5 min. charts.
Sometimes I dont understand why people trade real money when they are not able at least double demo account or some cent account.

…but everybody can blame FXpros, brokers, job, etc.

lazydogs · August 27, 2011, 1:03am

yeah AK, I totally agree with Manta. You have been a very valuable contributor to this thread and I believe you have the knowlege and skills to make this happen for you. I think Manta has a great suggestion trading the higher time frames. I was actually thinking about this earlier today for myself.

Personally, I have a day job as well, so I gave up trading the LO long ago as I was just too tired everyday. I;m directly south of you in CO, so I wake up in time to catch NYO if it looks good. If not I trade LC. With your post a few pages back, separating out the different sessions, I may start looking at the Asian session. Your post helped clarify what was right in front of me. Like ICT said a while ago, all it takes is 20 pips a day, and once we learn more about the Asian session, that will be another trade for those of us with day jobs.

I know you are down quite a bit overall since you started trading, but how are you doing since learning ICT’s methods? I think that is the real measure, and we are just getting all of ICT’s tools, so it should only get better from here.

FX280 · August 27, 2011, 1:12am

Hi ST,
Thank you for sharing. It is encouraging for newbies like myself to see that successful trading is possible and only with couple of years hard work. When you say hard work and serious screen time dose that mean following one pair and becoming familiar with its moves and then moving to next pair?
Also if you can please give some details of your screen time you mentioned that would be nice. Do you mean back testing? Looking at charts all day? Trying to find patterns and SR levels?

Thanks and good luck with your trading

SimonTemplar:

Yes, big drop on GBP/JPY this afternoon. I was in a Short, so nice way to end the week for me, but the Japanese PM going did speed things along!

No problem at all sharing my background, if you’re interested. I am full time at this (at least insofar as it is my principal income), but have not been at it as long as people on here might assume - I have been trading nearly two years. I had a previous career for ten years following university (unrelated, though - British Civil Service), then stopped that a few years ago to run our own own business (again unrelated) and be around more as kids had started turning up (we have three small boys). My wife suggested Forex trading to me a couple of years ago, she has a ‘proper’ career with a big blue chip company (hence when kids turned up it was my salary we cut to develop our business lol!), has been there 15 years since uni. We wanted to give me a new challenge, give us a fallback should Mrs Templar ever want to leave work, and bring in a good chunk of money to have a nice lifestyle while we were (comparitively!!) young and had the kids around. We hoped that I might have some aptitude as I travelled a lot with my first career, worked in and have always followed international politics, speak some languages so have always followed currencies and international events, and my wife’s work gives us access to a lot of quality market analysis. Through my first career I worked alone a lot, including overseas, so had learned to rely on my own judgement and make quick decisions. I’m a pretty analytical type, so we thought it was worth a punt.

To answer the trading part of your question: I went a route that is sometimes frowned upon on this site and went on a training course. I then took a year’s coaching with the same training provider. We were fortunate in that, because we have a pretty hands off business, and my wife has a corporate salary, we could afford for me to put in full-time hours to my trading right from the off, knowing that I would not be profitable right out of the box but that this would be the fastest route to finding out whether I could make a go of this long term. So we were able to pay for the training/coaching, fund a trading account and have me not produce an income for a while - I am very conscious that this put me in a very unusual and lucky position. We decided to give it a year and take a view then on whether the idea had legs. We have made various other investments over the years, mostly in property, and not all have worked out, although overall we have been lucky. So we treated it like a business from the outset, noted all the expenditure and decided how much time and money we could invest before we would want to see a return or pull the plug.

The first six months were a steep learning curve. The course and ensuing coaching meant that I did not make as many missteps as I might have had I been self-taught, and meant that I probably got to a higher level more quickly - initially, I just traded the strategies they taught me. The flipside is that we had invested a few thousand at this point, when you tot up the tuition, my trading account and my time. I made all the usual rookie errors, some of them several times, and lost money in five of my first six months, I was losing a few hundred (GBP) a month on my trading. Struggled a bit with the psychology, found myself pulling winning trades early, while losing trades would hit my Stop as I desperately hoped that they would turn around. I overtraded, too, quite badly at first - risking 1% per trade I could still be risking 6-7% at a time if I had too many open trades. I also traded too many variations on the strategy all at the same time.

Then slowly I learned to focus on only a couple of the strategies taught, execute mechanically, not let losses get to me too much, limit my market exposure at any one time, stay out of the market if I felt it was unclear - lots of other things, too, that have been discussed on this site. I have made most of the mistakes at one time or another. I never blew an account, and never lost my overall faith that I could turn it around, although there were a few bleak moments… I was obviously very fortunate to have a wife who was prepared for me to take a chunk of money out of the household finances without any guarantee that I would be able to put it back, and then fund us on a day-to-day basis while I figured it out. Trading took a lot of my time out of our regular business (my wife has a career job, after all), so I used to feel pretty bad on a Friday evening, reporting another week of losses. My coach was invaluable at that point in keeping me focussed, improving me, telling me which bits were good and which bits were terrible. I told him early on that I am a big boy, I would rather he be blunt. And he often was lol! For a while, his favourite phrase seemed to be ‘why did you do that?’.

I did notice a steady improvement while continuing to lose more often than I won, then after the first four or five months it suddenly clicked. I had lost a few thousand in bad trades, but we were fortunate in being able to seed my trading account again at that point sufficiently well that we were optimistic, once things had clicked, that I would be able to make the money back on a sensible timescale.

Sometimes I look back and kick myself for basic errors I made. For instance, I started with a £5000 account, so was risking £50 per trade. So the learning trades were costing us real money. Would have been less painful, perhaps, to risk £10 per trade on a £1000 account. However, I am not sure that it would have worked as well for me, as I learned an enormous amount from that period, my psychology basically started out on the right path. I have always needed a little pressure to perform best. I never bothered with demo trading for that reason - figured I would treat it too much like an arcade game.

Overall I am very happy with the route we took, delighted with it, it has been life-changing. Although it was very character building, all of the dark moments help me now. I make a nice income from Forex, I sit down to trade confident that I will be up on the month, and although I don’t enjoy losing trades they really don’t get me down. I was 35 when I started, I am 37 now - I have a long time ahead of me in Forex, and it gives a very good return on investment. The losing period of my Forex career was only one summer. My gains now are dwarfing my losses then. Which is why I often pop up on this site encouraging people to stick with it, as I do believe that with a lot of hard work (I have put in some serious screen time) and a bit of a feel for it there is nothing to rival it for freedom, flexibility and return.

This is also why I occasionally champion training courses on this site - we all learn in different ways, but I was a profitable, full-time trader under six months after I first took a course. Prior to that course I knew nothing! I still trade the strategies I was taught there, with a few extra twists that improve profitability that I have picked up along the way.

Apologies for the appalling ramble, I might have broken my own record. Just thought that if I was going to answer that question it made most sense to give a full answer!

(Anyone not interested, apologies for the lenth of this post, just skip it and apologies to ICT for hogging such a chunk of this page of his thread.)

ST

green_as_grass · August 27, 2011, 3:01am

Hey ST
Thanks for posting your experience here for us to read.
It’s encouraging & helps keep me with reality as to what’s possible & what it takes to make it happen.
Indeed you were very fortunate with your financial position, I’d like to be able to take your path but at the same time “there is more then one way to skin a cat” as we say.

akeakamai
Sorry to hear it’s getting to you so badly,
I understand what you mean by full time work weighing you down, I have a similar problem, 70hr weeks don’t help technical analysis skills… right now I have time away from the job & it’s heaven! But soon it will be another eight months of endless mind numbing hour upon hour of work! Just one more year though & I’m determined to cut loose.

Sounds like you need to sit back, take stock & make a less emotional judgment call after the initial pain has subsided.
Your posts have all been quality, would somehow seem wrong to just throw in the towel just like that!

All the best whichever way you go mate! :57:

traderpilot · August 27, 2011, 3:05am

What a final this week! Finally it is unfolding the big foodprint. THe whole week the fiber wasn’t able to make lower lows while the cable made consistently lower lows…hughe accumulation took place in the fiber…so a move upwards someday was forseen. However I didn’t think it would happen last friday. The banks took advantage of driving the price one more time lower while Bernanke was speeching and when it reached the weeks low again on the fiber…Boom! Next week we might even see prices reaching for higher.
(this ofcourse is how I see things happening :22:)
Have a nice weekend!
TP

MCAWally · August 27, 2011, 4:42am

I’m sorry for you AK but I know how you feel, I seem to fall off the rails and lose consistency all the time and I wont live trade again till I get back on track.
But it looks like the Asian session would suit you better and there are some very consistent set ups there in the fiber for 30 - 50+ pips at least 3 days a week, just have a look at ICT’s Asian vid when it comes out and see if you can work with it.
It would be a great loss to us all with your knowledge gone from the mix.

Either way mate, all the best.
Wally

erikskenne · August 27, 2011, 4:46am

My first OTE, and it worked out well this time, hopefully next time too.

Alishijo · August 27, 2011, 5:47am

Wow! ST that was a great contribution, thanks so much for your time. I had always assumed that you were a lot older than you actually are…probably because you are always focused and seem immune to the ups and downs of learning the ICT methods (which is a result of having confidence in your own system and only looking to improve on that). I found your story even more interesting because I will also be 35 when I take a stab at FT trading next year, and will be coming at it with the discipline I have learnt from running a business these last ten years. The only thing I am lacking is a blue chip wife! Hopefully I won’t need one of those because I have been on a steady upward curve for a few months now and I seem to have stopped hemorrhaging the money that I once was. I am still not consistently profitable, but I am confident that that will change in the next 6 months to a year.

Best regards, and thanks again.

Alishijo · August 27, 2011, 6:11am

Hey AK, I was REALLY surprised to see this post. I thought you were on top of things with the analysis and insights that you have been posting, but looking back I guess there were signs of frustration creeping in (…when you said you were done with LO, for example).

I really do hope that you reconsider your decision because I think you are close to cracking the code, but you have just had a bad run of it lately. August has been a difficult month to trade with all of the ups and downs, and it is no wonder you feel beaten up. Just think back a few months…were you not seeing easier trades before the summer? Alternatively you could focus on longer term trades using the COT data if you feel your body and mind needs a rest from the daily beatings. I only really realized how exhausted I was once I took a long vacation from it at the end of July, and I urge you to at least take a month away from the charts even if you do decide to come back.

Well, I honestly hope that this is not the last we hear from you.

Best regards
Ali

Jaroon · August 27, 2011, 8:59am

Yep well said Ali. Take some time out AK, you’ve got way to much knowledge to let it go to waste Also I always appreciate the fact that you are often the one to ask the questions some of us want to ask but fear offending :56:

You’ve given me advice in chat and generally in the thread so thank you for that if you bail. Remember the long term picture mate, trading for a living as your day job. Don’t give up the dream. Of course if you do call it quits I wish you the best.

couriermike · August 27, 2011, 9:59am

That makes alot of sense, traderpilot. I didn’t think of that at all. It’s really nice to see other people’s take on things.

@akeakamai, I know I don’t know you, but I can relate to what you’re saying. Life is short, and we all have to make hard decisions sometimes. Good luck to you in all your future endeavors, whatever they may be.

bun · August 27, 2011, 11:14am

Can anyone explain to me why Commercial hedgers trade against the trend? i.e. : Bullish at market bottoms and Bearish at market tops. Thanks in advance, Oh and props to ICT for this awesome thread, as far as i can tell this is gonna be the catalyst that i need to jump start my trading career :D.