Hi everyone,
I haven't been very active on this forum for last few years, but kind of "give back" feeling brought me back so that I can share some advice for all the beginners or not so beginners who are struggling with trading, as this site and people on this site helped me a lot at the beginning.
Just a bit of background: Have been trading FX and other markets since I was 16 (so almost 10y of experience by now), and have been trading FX on an institutional level for 4 years in total. I started doing prop FX trading (spot and FX options) for a decent bank during my university studies and have successfully done it for 2 years. Now, based in London, I am a portfolio manager / trader (co-managing a hedge fund) at one of the most prominent financial companies in the world, where I am one of the key risk takers in the FX market (i.e. I trade in big size) - have been there for 2 years by now.
These are the points which come to my mind right now as I don't have much time to spend on proper preparations, I might add some stuff in the future or more closely comment on these below if there is interest and if I have more time. There is no particular order to follow, this is also not really related to how you should trade but more of a general advice.
1. Forget about getting rich quick and get a sense of what is consistently achievable over the long run
2. Understand that getting this right will take you years of studying, learning from own mistakes, loosing money, frustration and other things - you might still not get there at the end so weight up your choices - you could become a doctor, earn a degree or become an expert at anything in that huge period of time you have to commit to trading before getting it right
3. Trading is an art not a science in my opinion - sometimes it's a lot about what kind of personality you are, as it is difficult to change some of our behavioural biases. It is not impossible though, i.e. some people are born as very good risk takers / traders, some people are not but might become very good, and, some people never do.
4. Stop looking for this one system, robot, holy grail. Traders in general fall into this pursuit (as myself in the past) as they want to have a method which doesn't require them to THINK - this doesn't exist though. You have to treat it as a business, do your analysis, do your homework, think a lot, plan everything ahead, risk manage everything, manage your emotions and every trade continuosly, be open minded all the time and many other factors around. Markets are constantly changing and you have to adapt if you want to succeed. To do all these things properly, of course you need a lot of knowledge and experience.
5. You have to read a LOT of good books as well, trust me
6. I suggest you learn macro & fundamentals & flows picture properly on top of the technicals - doesn't hurt to know what factors are the guys who have a price impact considering when they take trading decisions
7. This one is Extremely important - stop trading mini timeframes and targeting few pips per each trade - If you can't calculate how negatively that skews your potential edge, you have a lot of homework to do ....
8. Most retail traders end up being over-levered and risk too much for each trade (even by many recommended 2% is way too much)
9. Don't trust everything what is being said on trading forums (like this one and others) - There is a huge ammount of BS around here, you really need to be picky to who and what you listen to
10. Also don't blindly trust people on trading forums, especially not about investment performance - at the end, who would tell you the truth? and, what is the proof?
11. Especially don't trust anything you read up about brokers hunting your stops, so called "big dogs", and how things work on a big institutional level (e.g. big banks, hedge funds etc.) So far, a huge majority of things written on this topics by random people were extremely bad and not factual at all - as people in general have very little understanding of this topic, there is a lot of conspiracy theories going around which are misleading many.
12. Many people claim to be "professional" traders usually trying to sell you something. I would be careful with that, also what is the definition of a professional trader? I mean, if I trade my money from my bedroom, does that clasify me as a professional trader? I am not saying that you shouldn't buy some of those services, as it can definitely help you in the process in some cases - just do your homework before you do. I am saying this because I've seen examples where people were getting hoaxed, sometimes the prices for these services are incredibly high and quality of people's knowledge providing them very poor.
13. Don't abandon other things in your life just because of trading (e.g. wohoo I am dropping out of college / resigning from work to become a full time trader) unless you have enough capital and a very strong confidence in your skills
14. Don't get obsessed with trading, keep a healthy diet, do sports, keep up with your social life - it's very important when you have such a stressful profession as trading
There would be a post of similar size as this one for each of the points above, to explain them properly, but will leave that for the future (maybe). Feel free to ask anything and I will try to say as much as I can / want - of course will not be teaching you exactly how to trade and will not reveal everything - one who hasn't gone through it can't even imagine what kind of hard work, effort and sleepless nights it takes. Also I am not providing any services or mentoring so don't try to contact me for those.
I guess it was enough for now, hopefully some of you will find it useful!
Cheers,
katrooo
I haven't been very active on this forum for last few years, but kind of "give back" feeling brought me back so that I can share some advice for all the beginners or not so beginners who are struggling with trading, as this site and people on this site helped me a lot at the beginning.
Just a bit of background: Have been trading FX and other markets since I was 16 (so almost 10y of experience by now), and have been trading FX on an institutional level for 4 years in total. I started doing prop FX trading (spot and FX options) for a decent bank during my university studies and have successfully done it for 2 years. Now, based in London, I am a portfolio manager / trader (co-managing a hedge fund) at one of the most prominent financial companies in the world, where I am one of the key risk takers in the FX market (i.e. I trade in big size) - have been there for 2 years by now.
These are the points which come to my mind right now as I don't have much time to spend on proper preparations, I might add some stuff in the future or more closely comment on these below if there is interest and if I have more time. There is no particular order to follow, this is also not really related to how you should trade but more of a general advice.
1. Forget about getting rich quick and get a sense of what is consistently achievable over the long run
2. Understand that getting this right will take you years of studying, learning from own mistakes, loosing money, frustration and other things - you might still not get there at the end so weight up your choices - you could become a doctor, earn a degree or become an expert at anything in that huge period of time you have to commit to trading before getting it right
3. Trading is an art not a science in my opinion - sometimes it's a lot about what kind of personality you are, as it is difficult to change some of our behavioural biases. It is not impossible though, i.e. some people are born as very good risk takers / traders, some people are not but might become very good, and, some people never do.
4. Stop looking for this one system, robot, holy grail. Traders in general fall into this pursuit (as myself in the past) as they want to have a method which doesn't require them to THINK - this doesn't exist though. You have to treat it as a business, do your analysis, do your homework, think a lot, plan everything ahead, risk manage everything, manage your emotions and every trade continuosly, be open minded all the time and many other factors around. Markets are constantly changing and you have to adapt if you want to succeed. To do all these things properly, of course you need a lot of knowledge and experience.
5. You have to read a LOT of good books as well, trust me
6. I suggest you learn macro & fundamentals & flows picture properly on top of the technicals - doesn't hurt to know what factors are the guys who have a price impact considering when they take trading decisions
7. This one is Extremely important - stop trading mini timeframes and targeting few pips per each trade - If you can't calculate how negatively that skews your potential edge, you have a lot of homework to do ....
8. Most retail traders end up being over-levered and risk too much for each trade (even by many recommended 2% is way too much)
9. Don't trust everything what is being said on trading forums (like this one and others) - There is a huge ammount of BS around here, you really need to be picky to who and what you listen to
10. Also don't blindly trust people on trading forums, especially not about investment performance - at the end, who would tell you the truth? and, what is the proof?
11. Especially don't trust anything you read up about brokers hunting your stops, so called "big dogs", and how things work on a big institutional level (e.g. big banks, hedge funds etc.) So far, a huge majority of things written on this topics by random people were extremely bad and not factual at all - as people in general have very little understanding of this topic, there is a lot of conspiracy theories going around which are misleading many.
12. Many people claim to be "professional" traders usually trying to sell you something. I would be careful with that, also what is the definition of a professional trader? I mean, if I trade my money from my bedroom, does that clasify me as a professional trader? I am not saying that you shouldn't buy some of those services, as it can definitely help you in the process in some cases - just do your homework before you do. I am saying this because I've seen examples where people were getting hoaxed, sometimes the prices for these services are incredibly high and quality of people's knowledge providing them very poor.
13. Don't abandon other things in your life just because of trading (e.g. wohoo I am dropping out of college / resigning from work to become a full time trader) unless you have enough capital and a very strong confidence in your skills
14. Don't get obsessed with trading, keep a healthy diet, do sports, keep up with your social life - it's very important when you have such a stressful profession as trading
There would be a post of similar size as this one for each of the points above, to explain them properly, but will leave that for the future (maybe). Feel free to ask anything and I will try to say as much as I can / want - of course will not be teaching you exactly how to trade and will not reveal everything - one who hasn't gone through it can't even imagine what kind of hard work, effort and sleepless nights it takes. Also I am not providing any services or mentoring so don't try to contact me for those.
I guess it was enough for now, hopefully some of you will find it useful!
Cheers,
katrooo