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Attachments: What I learned after losing $300,000 trading forex
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What I learned after losing $300,000 trading forex

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  • Post #1
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  • First Post: Jul 27, 2020 1:48pm Jul 27, 2020 1:48pm
  •  CeeSo
  • Joined Jul 2020 | Status: Member | 206 Posts
This is my first forum post but I am not a newbie. I have lost about 300,000$ trading forex over the course of 5 years and it has been a huge struggle, to say the least but I kept persevering and educating myself and this year I am finally profitable to the tune of $130,000. After all this time and stress (and finally a very good mentor) I figured out some basic truths about forex trading.

1. You have to Master Money Management first and foremost. Forget EVERYTHING else and learn to lose like a professional.

I spent tens of thousands of dollars on courses and 99% of them teach you how to "get into a market" it was not till I finally learned how to get out of a market that my profits skyrocketed because the losses where controlled.

Understanding variance (math of probabilities) is where I failed. I did not understand the simple math of randomness. I was expecting to win a lot more trades then I was actually winning. Even if you have a process that is a winner 75% of the time it is "possible" that you could have 25 losing trades in a row and then have 75 winning trades right after. In reality, I am closer to 64% winning trades so I now have a process that will be fine even if I had 36 losing trades in a row. This is an exaggeration obviously but still, you have to assume it is possible and be ready for that both in your money management rules and emotionally.

I now use a Kelly Criterion Money Management spreadsheet and stick to it like a crazy person. I have become OBSESSED with Money Management.

2. Albert Einstien said " “Everything should be made as simple as possible, but no simpler.”

After you get the right education and do the hard work of testing and getting confidence in your process trading is simple BUT it still takes a lot of time to gain confidence and learn the process of trading right. The rule of 10,000 hours was very real for me and if I could do it all over again I would have demo traded and not risked a penny until I proved to myself over a large sample size of 500-1000 trades that I had a true edge and the right habits to do this with real money. Many people will argue that demo trading is useless but I completely disagree. I think that the brokers are the trolls telling you that lie. If you can't make money for 3-5 months demo trading you have zero chance of making money with real $$$.

What I do now is actually pretty simple but there are so many nuances in my subconscious that I don't even have to think too much I just recognize what is a good trade vs what is not such a good trade. I have built "good execution habits" into my subconscious. I don't even need to think in the heat of the battle I just execute and I could never have done that until I stopped bleeding real money and I demo traded for 5 months straight day after day building these new habits.

So when you hear people telling you demo trading is useless just ask yourself if you are happy with your results trading with real $$$ right now or if you need to stop doing what the retail trading world is telling you to do. Remember 98% of the people in here are losing like I was and even I could be lying to you and still losing money. (I plan on sharing some trades in this thread so I will leave that up to you to decide). The bottom line do not trust anyone in these forums including me. I listened to way too many other people without testing things out for myself. Do not make that mistake!.


3. The Markets are Random 85% of the time.

This is going to be a big pill for most of you to swallow but I am going to back it up with facts and math in some future posts so, for now, please do not troll me the math is coming soon.

Most of you will read this and freak out BUT if you really think about it for a few minutes it is really really good news. It means that 15% of the time there is a good directional edge in the markets and all it takes is PATIENCE to wait for the market to stop being random and exploit that none randomness.

When I examined where all my money was lost it was in random markets that were very unclear and ambiguous so in other words, I was just trading for the sake of placing trades. This can happen because of many reasons and I will discuss those reasons later and give you some solutions to fix this.

Over Trading is why you are losing money and again I believe this is one of the lies that brokers want you to believe because over trading makes them very rich.

So take solitude and happiness in accepting the fact that the market is random 85% of the time because we have a solution. We simply do not trade 85% of the time and we patiently wait for edges to appear and we stop buying your broker's new yachts every year.


These are the 3 main truths that changed everything for me and I promise I will expand on them in great detail later in this thread.

That is enough for the first post.

Fell free to troll me and I am totally expecting it and that leads me to one last "trading truth" I will share as a bonus.

4. You have to stop giving a sh#t what other people think of your trading.

I use to be crazy about proving things to other traders and being right all the time. I do not need to be right all the time I just need to be right 51% of the time and I can get very wealthy from this business and with the right Money Management I only need to be right 39% of the time to break even and everything after that is gravy and profits. (I will expand more on this later)


I wish you all much love and happiness and hope you enjoy this thread.

Cee
  • Post #2
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  • Jul 27, 2020 4:56pm Jul 27, 2020 4:56pm
  •  KeenPips
  • Joined Dec 2015 | Status: Member | 6,299 Posts
Very interesting. It is important to learn from one's trading mistakes, particularly where live trading accounts were blown. I have lost some money in the course of my trading career. Having blown about three of my live accounts in the first two years, I learnt three key things:
1. Capital protection should be my #1 goal; including risking only what I can afford to lose and using a stop loss;
2. Never over trade, including trading less often but looking for high quality trade setups based on specific trading criteria/rules;
3. Stick with one or two simple trading systems/strategies and be their master; never system-hop.

Stay safe, trade safe.

KP
Do your homework, follow the footprints of smart money
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  • Post #3
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  • Jul 27, 2020 5:22pm Jul 27, 2020 5:22pm
  •  CeeSo
  • Joined Jul 2020 | Status: Member | 206 Posts
Quoting KeenPips
Disliked
Very interesting. It is important to learn from one's trading mistakes, particularly where live trading accounts were blown. I have lost some money in the course of my trading career. Having blown about three of my live accounts in the first two years, I learnt three key things: 1. Capital protection should be my #1 goal; including risking only what I can afford to lose and using a stop loss; 2. Never over trade, including trading less often but looking for high quality trade setups based on specific trading criteria/rules; 3. Stick with one or...
Ignored
I could not agree more thanks for sharing
3
  • Post #4
  • Quote
  • Jul 27, 2020 6:06pm Jul 27, 2020 6:06pm
  •  Lehlohon2
  • | Joined Jan 2017 | Status: Junior Member | 1 Post
Thank you. When is your next post?
1
  • Post #5
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  • Jul 27, 2020 8:51pm Jul 27, 2020 8:51pm
  •  Nivad
  • | Joined Dec 2016 | Status: Member | 37 Posts
Quoting CeeSo
Disliked
This is my first forum post but I am not a newbie. I have lost about 300,000$ trading forex over the course of 5 years and it has been a huge struggle, to say the least but I kept persevering and educating myself and this year I am finally profitable to the tune of $130,000. After all this time and stress (and finally a very good mentor) I figured out some basic truths about forex trading. 1. You have to Master Money Management first and foremost. Forget EVERYTHING else and learn to lose like a professional. I spent tens of thousands of dollars...
Ignored
It sounds like yout learned to be profitable from the same person I did. Simplicity, money management, execute, Kelly position sizing, chaos theory, lots of backtesting e.t.c.

One thing though.... that person also taught me the importance of cutting losses. Posting here is a big loss for you. There are no professional traders here why are you wasting your time to post here?
2
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  • Post #6
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  • Jul 27, 2020 10:54pm Jul 27, 2020 10:54pm
  •  tzamo
  • Joined Nov 2017 | Status: Member | 548 Posts
Dear Cee,

Thanks for sharing and starting your thread

If you get a chance later, could you elaborate on how you approach using Kelly Criterion type of management when it does not account for the 25 possible losses in a row like you mentioned? With standard Kelly, 64% prob gives kelly values in range of 4% to 48% (0.6R to 2R return per trade). But risking such amounts will blow the account after 25 losers in a row.

Have a good day, and ignore anyone who sais that what you write has no value as it should help others
"Only you can Make the Future you will be proud to be a part of..." -Me
3
  • Post #7
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  • Jul 27, 2020 11:18pm Jul 27, 2020 11:18pm
  •  bottomhigh
  • | Commercial Member | Joined Mar 2020 | 140 Posts
Even with random betting, proper capital and risk management guarantees you won't lose more than spreads and other transaction costs. Unfortunately newbie traders tend to pay the least attention to this aspect, dreaming about easy and big gains. Of course it is slow process since if you have an edge over market it can't be realised in 10 trades.
1
  • Post #8
  • Quote
  • Jul 28, 2020 2:50am Jul 28, 2020 2:50am
  •  ezcurrency
  • Joined Feb 2006 | Status: Experienced Trader 19+ yrs | 545 Posts
SUBSCRIBED!

#3 - totally agree. A lot of random flip-flop, and many good 'setups' ...
It is very hard for a person to sit there all day (or days / weeks) for a trade setup to come. Most think they need to do something, so enter instead of waiting for the correct setup ... then most likely lose.

#4 - when I traded in the late 90's full time, I analyzed all of my trades. I only won ~ 32% of the time ... so 68% losers and I still made $ overall. The % wins doesn't matter that much ... its the average expectancy per trade. I had almost no large losses (good risk management), but many small gains and small losses. Acutally, I estimate 4-5% of my trades contributed to about 80% of my profits. I wished I could sit and wait, but I did take many unnecessary trades (small losses, scratch for even, or small gain), but once in a while (maybe once a month or so) there was great setups, so I went in big. That lead to exceptional months of trading.

EZ
2
  • Post #9
  • Quote
  • Jul 28, 2020 2:54am Jul 28, 2020 2:54am
  •  askchiboy
  • | Joined Jun 2010 | Status: Member | 11 Posts
I couldn't agree less. Thanks for the Tip off
  • Post #10
  • Quote
  • Jul 28, 2020 3:28am Jul 28, 2020 3:28am
  •  rover99x
  • | Joined Sep 2009 | Status: Member | 353 Posts
Quoting CeeSo
Disliked
This is my first forum post but I am not a newbie. I have lost about 300,000$ trading forex over the course of 5 years and it has been a huge struggle, to say the least but I kept persevering and educating myself and this year I am finally profitable to the tune of $130,000. After all this time and stress (and finally a very good mentor) I figured out some basic truths about forex trading. 1. You have to Master Money Management first and foremost. Forget EVERYTHING else and learn to lose like a professional. I spent tens of thousands of dollars...
Ignored
I agree pretty much with all that you say, I have been banging on about markets being random around 85% of the time for a good few years now! Many thanks for taking the trouble to post this......
We trade what we believe!
2
  • Post #11
  • Quote
  • Jul 28, 2020 4:17am Jul 28, 2020 4:17am
  •  sinexcellent
  • | Joined Feb 2011 | Status: Stay Humble no matter what | 47 Posts
keep it up mate, I lost not as much as you are, but I can say I loss a lot too in the past, but when you master the MM and also the strategy that works for you. just be discipline with it, and you will grow your 1 mill.
1
  • Post #12
  • Quote
  • Jul 28, 2020 6:02am Jul 28, 2020 6:02am
  •  Phil_GMT
  • | Joined Jan 2008 | Status: Member | 412 Posts
$300K Loss I couldn't do it, I'd probably never trade again. Then again you must have deep pockets to lose that much. I'm pleased you are turning it around.

Point 2, Agreed Demo trading successfully for 5 months is a real test, I wish I only demo traded until I was successful. In day trading X5 your account isn't anything special, so many people x2-x4 their demo and start Live trading, but newbies don't know that's not enough. Once you have X50-X100 on Demo you may have the skills to do it live. Also any new setups or ideas need to be executed on Demo.

Yes regarding point 4,
A risk to return of more than 2:1 is very important, Forex has randomness so even the best traders will get a streak of losses, so a good R:R is a must.
Yes trying to prove your way of doing it to other traders or friends is not a good idea only results matter anyhow. Styles are down to the individual trader.


I've had a Big improvement this year (after 11 years trading) in my trading all I have done is changed R:R, I'm having more losses (bigger also) but bigger winners. My largest Winning Trade is 2.6X my biggest Loss. It was hard at first because I was told in day trading I should only have a few pips loss and that you can only predict the next 5-10 pips. (I now have up to 15 pip stop loss, targeting +30 and am doing better my stress levels have gone down also).

I made X11 times my account last week on Demo (+380 pips), GBPUSD 5 minute chart including mistakes. It only works during Volatile periods (1-4 months
-like Covid, Brexit, general uncertainty, and I'm fine with that.

Again really pleased to hear that you have turned things around.
1
  • Post #13
  • Quote
  • Jul 28, 2020 9:55am Jul 28, 2020 9:55am
  •  prozor7
  • Joined Mar 2010 | Status: Member | 3,490 Posts
"4. You have to stop giving a sh#t what other people think of your trading."
can't emphasize how important above sentence is!!!!!

I have 5 rules in trading
1. simple
2. systematic
3. do not assume
4. critic
5. do not panic

stick to yours plan and rules
Forex can only be understood backwards, but it must be traded forwards.
9
  • Post #14
  • Quote
  • Jul 28, 2020 10:29am Jul 28, 2020 10:29am
  •  medici
  • Joined Nov 2008 | Status: Member | 2,926 Posts
Learning to trade profitably is not about capital protection. If it were, investing in a fixed income ETF, or something similar, would be the thing to do.

Learning to trade profitably is about learning to lose.

Most people are afraid of losing money, and taking a loss they find painful.

One needs to get to the point where taking a loss causes no bother at all, because one knows that one is profitable in the long run.

That is likely the result of a combination of having a profitable method and being reasonably well bank-rolled.

Pain and fear cause inconsistent trading, and therefore losses, regardless of method or account size.

Last but not least, bear in mind that the pain and fear may not be trading related, even though that's what it seems like. it may be due to circumstances of personal psychology. That's why it's good to have a trading coach or trading psychologist for support.
13
  • Post #15
  • Quote
  • Jul 28, 2020 10:48am Jul 28, 2020 10:48am
  •  driven18
  • | Joined Jul 2012 | Status: Member | 744 Posts | Invisible
I have 1 rule in trading.

As you get your edge going in entering, SL and TP,

1. Go to BE asap. You will have a lot of BE's but you will have few 5:1 R:R's.

The feeling of being at BE and no a fear of losing that trade will help your mental edge.

To me going to BE is a priority #1 and Free Trade after that technically and mentally.
8
  • Post #16
  • Quote
  • Jul 28, 2020 11:06am Jul 28, 2020 11:06am
  •  LuiginoMar
  • | Joined Jul 2020 | Status: Member | 9 Posts
Quoting CeeSo
Disliked
This is my first forum post but I am not a newbie. I have lost about 300,000$ trading forex over the course of 5 years and it has been a huge struggle, to say the least but I kept persevering and educating myself and this year I am finally profitable to the tune of $130,000. After all this time and stress (and finally a very good mentor) I figured out some basic truths about forex trading. 1. You have to Master Money Management first and foremost. Forget EVERYTHING else and learn to lose like a professional. I spent tens of thousands of dollars...
Ignored
Thank you for sharing. I'm a newbie and for me is important to read this things.
1
  • Post #17
  • Quote
  • Jul 28, 2020 11:49am Jul 28, 2020 11:49am
  •  AZTrader1
  • | Joined May 2019 | Status: Junior Member | 2 Posts
Quoting Nivad
Disliked
{quote} It sounds like yout learned to be profitable from the same person I did. Simplicity, money management, execute, Kelly position sizing, chaos theory, lots of backtesting e.t.c. One thing though.... that person also taught me the importance of cutting losses. Posting here is a big loss for you. There are no professional traders here why are you wasting your time to post here?
Ignored
What a rediculous statement. Posting this in an attempt to help others is a 100% big WIN for this person. In the end, it is all about giving back.
6
  • Post #18
  • Quote
  • Jul 28, 2020 3:48pm Jul 28, 2020 3:48pm
  •  tush1822
  • Joined Sep 2018 | Status: Member | 561 Posts
interesting!! Thanks for sharing.

Trading is lethal combination of Risk, Intelligence and Knowledge!! All are must necessary attributes but in right amount in a person!!
  • Post #19
  • Quote
  • Jul 28, 2020 3:54pm Jul 28, 2020 3:54pm
  •  TrendeXLevel
  • | Joined Jul 2020 | Status: Junior Member | 1 Post
great story ! but the market is not random with proof over the course of the past 30 years . there is a fixed pattern, and the thread started from market structure.
good luck
1
  • Post #20
  • Quote
  • Jul 28, 2020 3:55pm Jul 28, 2020 3:55pm
  •  GermanVargas
  • | Joined Jun 2020 | Status: Member | 2 Posts
Markets are not random, they're manipulated to its core.
8
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