Learning how to control your emotions while trading is an essential but challenging key to success. It takes time, experience, and hard work before you can be the master of your emotions and stay unfazed regardless of the market’s moves. This is what our featured member spent months on improving, and today’ he’s ready to share how it changed his life!
Trading for just about 17 months, Alg626 has been actively sharing his trading journey in the community. With the help of the contributions from other members of the community, he was able to learn more about price action and trading psychology.
And although he’s on the path towards becoming consistently profitable, he’s also had his share of mistakes and mishaps. Just like any other newbie trader, he explored different approaches on how to start trading. Joining paid signal services and FTMO challenges failed him. But despite this, he pushed through and focused on developing his first trading strategy.
So, without further ado, we give you @Alg626!
1. Tell us a little bit about yourself. Where are you from? What are your hobbies, interests, favorites?
Born and raised here in Georgia, me and my family live in a small town just 20 minutes south of Atlanta. Married now for 17 years, we have two kids. Boy and girl who are 12 and 8. Hobbies include playing basketball and golf, love the beach we head to Florida couple times a year to the Gulf, snowboarding we usually go to North Carolina to find some snow. Always enjoy a good movie or concert.
2. How long have you been trading and how did you start with forex?
I have been trading now for about 17 months, so not long at all really compared to others on the site. Well, it all started one day, a friend and I were hanging out and he showed me MT4 on his phone and talked a little about it, but at that time I didn’t really follow. So maybe another month or so we were hanging out again and he mentioned something, so I took a look at it and it was an USOIL chart, which at that time it was like at $42.00 a barrel. In my mind I thought well just buy oil it’s going to go up when we start pulling out of this COVID mess. So quick as I could I deposited $100 into an unregulated broker and bought oil that night. Went to bed with no stop loss or take profit targets lol. Woke up with a nice little profit made 150% that night and thought “this is easy”. So closed that trade and entered another with a bigger lot size but not really knowing what I was doing. And like you would think the price moved against me a bit and margin called lol. One of many lessons learned the hard way. And those were my very first two trades I ever have made.
After that I found the Babypips education section and started reading, which was a great help in understanding just the basics of what was a buy stop, sell stop, what was a pip, how price moved etc… Then I made an account after reading through the entire school (it seems it has been refreshed since last time I read it) and started lurking around. During this time as well, I joined a signal service which was a legit service (did my research). Thinking it should be easy to make money I’ll just copy his trades and bam I’ll be rolling in the money, also at this time I was joining FTMO to pass that as well. Well couldn’t ever get it to really sink in and get going so I continued to struggle, along with failing several FTMO challenges, with that for a while until I decided I was going to figure this out on my own and find my trading strategy. And that’s where I really started building my first trading strategy.
3. Could you please describe a typical day in your trading life?
Well, I set my zones and alerts on the weekend, usually takes about 1-2 hours total. I trade off a 4HR chart using price action. I don’t pay much mind to the charts during the day (I still work a full-time job at the moment). Each day around 5:30pm (Eastern Time) during the swap I’ll go through the charts and make adjustments if needed. Meaning if a zone has been broken or an alert was triggered and I didn’t like the set up I’ll see if there anything else I like about that pair, if so I’ll set another alert, if not I move to the next pair and won’t revisit that pair till the next day. I don’t read any news or pay much mind to the fundamentals. Just look at the chart and go from there. The only reports I do look for though are the NFP and the FOMC.
4. Who has influenced you the most in your trading journey?
I first started off developing my first trading strategy kind of my own, wasn’t watching videos or reading anything that just blew me away. I haven’t figured out the psychology side of things and how much of a big role that plays, more so than your actual trading strategy or plan. So my first trading strategy which was mechanical and just RSI/MACD strategy with a few rules and based on support and resistance. Then I found the thread that Jonathan Fox had here and that was kind of my introduction to price action. Read through that thread and started backtesting that strategy and it worked very well for me. As time passed and progressed I found out about Tom Hougaard (actually from another member here at Babypips) and his approach on psychology of trading. Then also found Chris Caprie’s thread here as well and just really started looking into my mindset about trading and expectations from trading. So the main ones I was really able to pull from….Jonathan Fox, Chris Caprie, Al Brooks, and lately it’s been Tom Hougaard and the late Mark Douglas.
5. What’s been the most challenging part of trading for you? How are you dealing with this challenge?
Goodness, what’s not challenging in this market? But I think for me it’s the emotional side and learning to deal with all those emotions that flood during a winning streak and a losing streak. You get those highs of winning then become over confident and you’re trading outside your trading plan. Or you hit a losing streak and now you don’t want to take any trades or you’re exiting early just to make back some little profit when in fact if you would stick to your plan that win would have been a much bigger win. Or you do the opposite when you lose - you open a bunch of trades trying to “get back” your losses. All of it is very dangerous to your state of mind and your account balance.
One of the ways I combat that is to always try to be aware of your emotions, one reason I try and do all my analysis on the weekend with me not being in any trades. I can still make analysis during trades and through the week, but if you can be in a carefree state of mind while going over charts it just works better for me. I have thankfully come across material from guys like Tom Hougaard and Mark Douglas that really focus on psychology of trading. Going through their material has really helped me.
I truly think there are a lot more better traders out there than what people think. It’s just that some never get through the emotional barrier and having to rewire how you think.
6. You’ve shared 2 trading strategies in the forums, which would you recommend to a new trader the most and why?
Well for beginners a mechanical system is usually easier to start with which is what my first strategy is (well along with having to locate support and resistance). They have clear entry and exit rules and are a litter easier to follow.
As for “price action” or a more discretional strategy where you’re just reading the chart and your entries and exits are based on how you read the chart. I do think a beginner can start off with that just may be a little more difficult. But each person is wired different and I don’t necessarily think one is better than the other, just depends on the trader. I’m teaching my son to trade, he is 12, he likes just looking at a chart more than using indicators or being in a fixed system. But if my wife was to trade, I can tell she would be more of a mechanical system trader.
And time frame is important I think for a new trader, I would recommend new traders at least starting at 4HR chart or Daily for Forex, Oil, or Gold. Indices are a different story. If you’re a new trader just wanting to do indices, then maybe start at 1HR before drilling on down to the other timeframes (but indices are a different monster altogether).
7. What are 3 things traders should keep in mind when they’re trying to develop their own system/ strategy?
Emotions. The strategy I think it is the easier part. There are plenty that work you can pick up from the internet, whether it’s one from here at Babypips or somewhere else. The main thing to that is finding one that fits your personality and how much time you have to devote to reading charts. If you have time during the day, you can scalp or day trade, whereas if you only have a few hours a day or even the week then swing trading may better suit you. Then adding your twist that makes it yours, when it’s yours you have more conviction in your trading and can grow into being more confident with your system. Then backtest it like crazy as much as you can until you feel good about it and ready to go live.
I’m also one that doesn’t really think that demoing a strategy is the best route, it wasn’t for me at least. Demo has no emotion or feelings in it, no matter how good your system is if you can’t work through your emotions and mostly fear. Then it won’t work. Think about it, the brokers have to state on their websites how many accounts are negative, and it’s hardly ever under 75%. So, if we’re all reading these books and searching the net for strategies, we’re all reading the same charts and some using the same indicators then why are so many not making money. I think a large percentage of that is due to traders not able to handle their emotions during trading. Whether fear has them locked up, or they’re overconfident taking crazy risk because they think there is no way they could be wrong on this trade because everything lines up, or whatever reason you can think of. But truth of the matter is that we really don’t know what’s going to happen when we put a trade on.
8. How has trading changed your life and what have you learned about being a forex trader?
Well, it’s taught me about being aware in the moment, not panicking. Staying level headed, which helps in all aspects of life. Whether it’s been a rough day or you’re tired and shouldn’t be looking at charts due to your emotional state. So trading has certainly helped me of being aware when I’m in emotional distress.
9. Tell us about your favorite food!
Sushi or hibachi are always good. Steak can never go wrong with that as well. Italian, Mexican, Thai, Southern Cooking. Really just about anything you put in front of me. Which makes the wife happy lol.
10. What is your current non-forex related goal at the moment?
Would like to do some more traveling besides what I do for work lol. I’ve been to 19 of the 50 states, so got a few to get through. Would love to go to different baseball parks and watch a game or a football game(American football). Would also like to do some international traveling, I’ve never been out of the states. Got some home renovation projects I want to tackle.
