FX Article: You do not have to go through hell trying to figure this business out
Credit- Forex Factory
http://www.forexfactory.com/showthread.php?t=39514&page=2
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They say that 95 percent of traders lose and give up. For new traders, that trade anything less than 4 hour charts, its almost 100 percent. They lose everything within a year, and most of the time much sooner. Any new trader that wants to treat this like a business, and take future success seriously, should do the following as a minimum:
1. Whatever/however you trade, it should be done on daily charts or higher, and certainly not under 4-hour
2. To start it should be a demo account. It should stay a demo account until you show a profit three months in a row
3. After demoing open a small practice account with pocket change. You do this also for a minimum of three profitable months in a row
4. You open a normal account and never trade more than 1 to 2 percent of your account per trade. If after three months you have a combined loss you go back to steps 2 & 3.
5. If you get past step 4 you continue to refine what you are doing by never stopping the demo process. You continue to bring up/in refinements/additions to your normal account after they have proven themselves on demo and practice first.
After you have found solid success following this progression you then go back to step two and start all over with your intraday trading. This is how you treat it as a business with long-term goals and success in mind. Now let’s be honest, almost no one does this and there you have the 95% of traders that never accomplish what they set out to do in this business, that give their money to the 5% that do. I have been trading for almost 22 years and demoing is as big a part of my trading business as live trading.
Most new traders don’t want to trade, they want to gamble. There is the difference. The single biggest reason new traders blow out their accounts is thinking they have to day trade to be a real trader.
Professional traders don’t have a degree, they don't have more brains, they are not luckier, nor do they have some secret formula everyone else is trying to find. A professional trader is simply someone who takes money out of the market on a consistent basis. Consistent does not mean every day or even every week for that matter.
I don't know of one single good trader who doesn’t lick his chops over a new trader looking and trading off an intra-day chart (i.e. any time frame under daily). Even the very best trader has difficulty making consistent money trading under a 4-hour chart. There are a ton of reasons that I wont go into.
I have noticed more and more people posting that have come out of the futures markets, many from the Mini SP and Dow. The quickest way for a futures trader to get killed in the Forex market is to be ignorant of, or not aware of, the difference between an 8-hour market and a 24-hour market. The biggest obstacle I have faced in trading Forex is continuing to think like a futures trader.
A one-day move in Forex will take 2 or 3 days for a similar move in say the mini Dow. For years I have played the SP with great success. The day lasts 8 hours and I know to take my profit because,
1. The day does not last long and
2. With the way the world is I am not staying in overnight.
With Forex you don’t have to worry about overnight moves, and if you monitor your positions you can stay in any length of time you want. My problem has been that where I naturally would take a profit I now hang on looking for more.
The result has been the 24-hour problem. I get stopped out at Breakeven or at a loss. This is an ongoing learning process for me. Any trader just coming out of the futures markets would be well served to take what I am saying here seriously. For those of you who have never traded anything but Forex I think you have an advantage over futures traders. You are not programmed to think like they do. You already know that these markets can move fast and hard at anytime. You know that a 30 or 40 pip profit can disappear in 2 or 3 minutes overnight. Anyway I just wanted to bring it up, perhaps more for my own contemplation than anything else.
Discipline, hard work, and patience
If you’re not willing to give this at least two years of study and practice then you’re just playing around. Doctors and lawyers etc spend 6 to 10+ years mastering something that can make them rich. Why would anyone think that this business, which can make you much wealthier than most any other profession, is any different?
If you’re not going to treat this as a business then quit and go to Vegas where your odds are better. Going into the trading game blind with no plan is financial suicide.
1. State your goals
2. Make your plan
3. Execute your strategy
Ok so you’re brand new to this business. Get the worthless crap off of your charts. Stochastics, MACD, etc. There is a place for them but not with new traders. When it’s time, use them to spot divergence, which is all they are good for anyway. Get the stupid MA cross systems off your charts also,
They can work but that’s another story. There are only two things you need on your chart. Price and the 365 EMA. Nothing else. Daily, weekly and monthly charts only.
The bottom line
New traders starting off on intraday are already in the coffin. The nails are usually hammered in within two months.
Discipline, Hard Work And Patience
Yes, that’s exactly what it takes. There is no holy grail; there is no free lunch. There will always be fresh blood for those that have figured it out and paid the price. Without exception they were once the fresh blood and almost all of them found themselves on numerous occasions in the foetal position. Angry, frustrated and disappointed. This business can ruin you. It can steal your future, your family, and your sanity. Don’t put yourself through that. The only way to avoid it is put nothing of value on the line until you have proven you can do it.
Don’t open a $5000 account with money that is going to break your heart if you lose without proving first you can do it on demo.
It’s really just common sense.
I would just say that the 95 percent who never make it (and I say 95 is low) are the day traders. Put a calculator in the hands of any person just taking a look at this business and within ten minutes the leverage combined with a decent daily move will have their head spinning with the possibilities. The mindset of got to trade-got to trade sets in and so does disaster a great majority of the time.
Trying to figure this business out.
When I first started it was about the same time I was starting my contracting business. I was young, stupid and no way I was going to find any worthwhile help. No Internet, no nothing. All I had was a ruler, a piece of graph paper, a newspaper, and a phone to my broker. There was no one to convince me to paper trade until I knew what I was doing. I knew it in the back of my mind but fat chance I was going to give up all that easy money doing it on Demo. What an idiot, what a complete and utter fool I was. Worse yet I did it over and over and over again. Worked my ass off to fund yet another account. “Honey this is it. I got it figured out. That last 20 grand I blew was worth it, were gonna be rich”.
It makes me sick to my stomach, I swear to God it does. 8 years of it. Sure I had some great wins. I rode sugar from 2 to nearly 6, pyramiding up.
Made six figures only to lose it all trying to day trade before I had a clue. I can’t tell you how many times I cried myself to sleep slumped over my office desk. I couldn’t quit. I could see the reward if I could only figure it out. Maybe just a case of enough time trying, I don’t know. What I do know is, I started to realise this isn’t a game. Doctors spend 10-12 years killing themselves for a shot at a six-figure income. It took me more than that. What happened? What changed? I quit funding accounts with 1 or 2 grand and betting the farm. I flat quit period, with real money that is. The Internet came along at the right time and I flat said no more until I can prove it on demo. Period.
The key is this. The goal is to fund/build an account that it is large enough that it produces a staggering income off of a couple, or several, trades per month while only risking one or two percent on each trade. The pressure lets up and trading gets much, much easier. You don’t need every trade that looks promising. You know you don’t need but one or two and you know if you’re patient your damn sure going to get at least several in a month’s time.
It’s not hard to move your stop to breakeven or take some profit when your showing $2000 on the plus side after a small move. Its damn near impossible when that same move shows a 50-dollar profit. Think about it. Very few people can fund a $50,000 or larger account and even fewer can build one to that point starting from 500 bucks. It’s not that it can’t be done it’s just people don’t have the patience. So, my question is this. If it takes you ten years trading smart to build an account to that staggering point starting with very little, is it worth it? I can’t answer that for you.
I day trade the mini-Dow. I’m good at it. After so many years trading it and the mini SP it’s almost easy when I have even a little volatility. I position trade Forex. Why? Because I have proven on demo I can. When I can prove to myself I can day trade Forex for 6 months profitably on demo then I will. Not until.
I’m in no hurry, as I love the Dow. I wont go back to finding myself in the foetal position after blowing all my money being a fool. There is no reason in the world to go through hell risking your rent money, or, worse yet, money that took you a year or two to save. If you can’t do it on demo, you can’t do it live, I promise. So don’t do it.
http://www.forexfactory.com/showthread.php?t=39514&page=2
---------------------------------------------------------------------------------------------------------------------
They say that 95 percent of traders lose and give up. For new traders, that trade anything less than 4 hour charts, its almost 100 percent. They lose everything within a year, and most of the time much sooner. Any new trader that wants to treat this like a business, and take future success seriously, should do the following as a minimum:
1. Whatever/however you trade, it should be done on daily charts or higher, and certainly not under 4-hour
2. To start it should be a demo account. It should stay a demo account until you show a profit three months in a row
3. After demoing open a small practice account with pocket change. You do this also for a minimum of three profitable months in a row
4. You open a normal account and never trade more than 1 to 2 percent of your account per trade. If after three months you have a combined loss you go back to steps 2 & 3.
5. If you get past step 4 you continue to refine what you are doing by never stopping the demo process. You continue to bring up/in refinements/additions to your normal account after they have proven themselves on demo and practice first.
After you have found solid success following this progression you then go back to step two and start all over with your intraday trading. This is how you treat it as a business with long-term goals and success in mind. Now let’s be honest, almost no one does this and there you have the 95% of traders that never accomplish what they set out to do in this business, that give their money to the 5% that do. I have been trading for almost 22 years and demoing is as big a part of my trading business as live trading.
Most new traders don’t want to trade, they want to gamble. There is the difference. The single biggest reason new traders blow out their accounts is thinking they have to day trade to be a real trader.
Professional traders don’t have a degree, they don't have more brains, they are not luckier, nor do they have some secret formula everyone else is trying to find. A professional trader is simply someone who takes money out of the market on a consistent basis. Consistent does not mean every day or even every week for that matter.
I don't know of one single good trader who doesn’t lick his chops over a new trader looking and trading off an intra-day chart (i.e. any time frame under daily). Even the very best trader has difficulty making consistent money trading under a 4-hour chart. There are a ton of reasons that I wont go into.
I have noticed more and more people posting that have come out of the futures markets, many from the Mini SP and Dow. The quickest way for a futures trader to get killed in the Forex market is to be ignorant of, or not aware of, the difference between an 8-hour market and a 24-hour market. The biggest obstacle I have faced in trading Forex is continuing to think like a futures trader.
A one-day move in Forex will take 2 or 3 days for a similar move in say the mini Dow. For years I have played the SP with great success. The day lasts 8 hours and I know to take my profit because,
1. The day does not last long and
2. With the way the world is I am not staying in overnight.
With Forex you don’t have to worry about overnight moves, and if you monitor your positions you can stay in any length of time you want. My problem has been that where I naturally would take a profit I now hang on looking for more.
The result has been the 24-hour problem. I get stopped out at Breakeven or at a loss. This is an ongoing learning process for me. Any trader just coming out of the futures markets would be well served to take what I am saying here seriously. For those of you who have never traded anything but Forex I think you have an advantage over futures traders. You are not programmed to think like they do. You already know that these markets can move fast and hard at anytime. You know that a 30 or 40 pip profit can disappear in 2 or 3 minutes overnight. Anyway I just wanted to bring it up, perhaps more for my own contemplation than anything else.
Discipline, hard work, and patience
If you’re not willing to give this at least two years of study and practice then you’re just playing around. Doctors and lawyers etc spend 6 to 10+ years mastering something that can make them rich. Why would anyone think that this business, which can make you much wealthier than most any other profession, is any different?
If you’re not going to treat this as a business then quit and go to Vegas where your odds are better. Going into the trading game blind with no plan is financial suicide.
1. State your goals
2. Make your plan
3. Execute your strategy
Ok so you’re brand new to this business. Get the worthless crap off of your charts. Stochastics, MACD, etc. There is a place for them but not with new traders. When it’s time, use them to spot divergence, which is all they are good for anyway. Get the stupid MA cross systems off your charts also,
They can work but that’s another story. There are only two things you need on your chart. Price and the 365 EMA. Nothing else. Daily, weekly and monthly charts only.
The bottom line
New traders starting off on intraday are already in the coffin. The nails are usually hammered in within two months.
Discipline, Hard Work And Patience
Yes, that’s exactly what it takes. There is no holy grail; there is no free lunch. There will always be fresh blood for those that have figured it out and paid the price. Without exception they were once the fresh blood and almost all of them found themselves on numerous occasions in the foetal position. Angry, frustrated and disappointed. This business can ruin you. It can steal your future, your family, and your sanity. Don’t put yourself through that. The only way to avoid it is put nothing of value on the line until you have proven you can do it.
Don’t open a $5000 account with money that is going to break your heart if you lose without proving first you can do it on demo.
It’s really just common sense.
I would just say that the 95 percent who never make it (and I say 95 is low) are the day traders. Put a calculator in the hands of any person just taking a look at this business and within ten minutes the leverage combined with a decent daily move will have their head spinning with the possibilities. The mindset of got to trade-got to trade sets in and so does disaster a great majority of the time.
Trying to figure this business out.
When I first started it was about the same time I was starting my contracting business. I was young, stupid and no way I was going to find any worthwhile help. No Internet, no nothing. All I had was a ruler, a piece of graph paper, a newspaper, and a phone to my broker. There was no one to convince me to paper trade until I knew what I was doing. I knew it in the back of my mind but fat chance I was going to give up all that easy money doing it on Demo. What an idiot, what a complete and utter fool I was. Worse yet I did it over and over and over again. Worked my ass off to fund yet another account. “Honey this is it. I got it figured out. That last 20 grand I blew was worth it, were gonna be rich”.
It makes me sick to my stomach, I swear to God it does. 8 years of it. Sure I had some great wins. I rode sugar from 2 to nearly 6, pyramiding up.
Made six figures only to lose it all trying to day trade before I had a clue. I can’t tell you how many times I cried myself to sleep slumped over my office desk. I couldn’t quit. I could see the reward if I could only figure it out. Maybe just a case of enough time trying, I don’t know. What I do know is, I started to realise this isn’t a game. Doctors spend 10-12 years killing themselves for a shot at a six-figure income. It took me more than that. What happened? What changed? I quit funding accounts with 1 or 2 grand and betting the farm. I flat quit period, with real money that is. The Internet came along at the right time and I flat said no more until I can prove it on demo. Period.
The key is this. The goal is to fund/build an account that it is large enough that it produces a staggering income off of a couple, or several, trades per month while only risking one or two percent on each trade. The pressure lets up and trading gets much, much easier. You don’t need every trade that looks promising. You know you don’t need but one or two and you know if you’re patient your damn sure going to get at least several in a month’s time.
It’s not hard to move your stop to breakeven or take some profit when your showing $2000 on the plus side after a small move. Its damn near impossible when that same move shows a 50-dollar profit. Think about it. Very few people can fund a $50,000 or larger account and even fewer can build one to that point starting from 500 bucks. It’s not that it can’t be done it’s just people don’t have the patience. So, my question is this. If it takes you ten years trading smart to build an account to that staggering point starting with very little, is it worth it? I can’t answer that for you.
I day trade the mini-Dow. I’m good at it. After so many years trading it and the mini SP it’s almost easy when I have even a little volatility. I position trade Forex. Why? Because I have proven on demo I can. When I can prove to myself I can day trade Forex for 6 months profitably on demo then I will. Not until.
I’m in no hurry, as I love the Dow. I wont go back to finding myself in the foetal position after blowing all my money being a fool. There is no reason in the world to go through hell risking your rent money, or, worse yet, money that took you a year or two to save. If you can’t do it on demo, you can’t do it live, I promise. So don’t do it.
