This post will be on something that I believe is often overlooked on these forums, expectations.
As it it mentioned here and there, and not necessarily in depth, I thought it would possibly help some of the new guys and girls in the trading world.
There are a million ways that we all end up in this world. Some of us saw a commercial for the now infamous "Forex Made Easy", some of us read about it on the net, and some of us even just "fell into it."
We all had the same incentives in the beginning, to make money, and a lot of it. As we got started in this, we often thought of yachts, Monte Carlo, and perhaps a nice home on the beach.
Then, something odd happens. You place your first trade. Something you don't expect happens, you begin to feel fear. You more than likely have no idea as to why the price is going against you, and how far it is going to fall. You get out with a 20 pip loss. You were playing far too large, and are now down 5%.
The next thing that happens is you watch price go in your direction, and could have got a 50 pip profit. It is at this point you realize how difficult this just might be. Or, something worse happens, you learn not to panic out of the next trade, all the while not realizing that there is always a time to get out. Next trade, -50. You still have no idea what in the world is going on. It appears so random to you.
It is at this point I would like to direct you to your expectations. Forex is a very serious endeavor. Your computer is not an ATM, no matter what someone else told you.
Those little bars and candles that are on your charts represent real people. Most of us go into this thinking how we are going to first double, then triple our money, etc. Guess what? Those people think that too. A lot of them have more skill than you.
While I am not trying to discourage you, I am trying to inject some reality into your trading. Somebody wins, somebody loses. The loser can and will be YOU sometimes. It is just a matter of fact. Trust me, if I had a fool-proof way to win at this thing, I would only need to do it for a year or two, as I turn a 500 dollar mini-account into millions.
So, what we as traders need to do is set goals. As odd as this seems, the first one isn't winning, it's making trades that make sense. As you progress, you will try different things, and some will work and some won't. But there is no such thing as a sure winner. The next goal will be to lose less. I know it sounds odd, but that is really how it works.
Sometimes that well placed, intelligent decision will cost you some money. It is at this point all you can do is take comfort in the fact that you stuck to your plan. You acted with the information available, and did what you thought was right. You weren't guessing, or worse yet, chasing price.
I have not been doing this very long, but what I have learned is that it isn't easy. There is always something more to learn. This market has a 90% or more failure rate. The others make a boatload of money. If you want to be in the "Top Ten Club", you are going to have to work at this, and hard.
I believe the first year is about shaking people out. This is like going to college in so many ways, as there is the old saying "Look to the right of you, and then to left, those people aren't going to be here at graduation." With Forex, you would have to count the entire of row of people sitting with you. Brutal. But I can tell you this: The payoff is so much more than a degree can offer, if you are good.
Another expectation that needs to be killed right away is that the markets are always a good place to be. Sometimes, it is absolutely dead. It's really hard to make a buck in that environment. So what? Don't play.
I also would like to direct the new guy to Money Management. I know you hear it over and over, but trust me, it is what will keep you alive. Besides, with proper Money Management, you can play larger time frames like the 4 hour charts. Don't ever forget that you got into this for freedom as well. Staring at the charts will never make the market move, and will probably only get you into some serious trouble.
Again, sometimes there are no trades to be had. I cannot say this often enough. As you progress, you will learn for example that USD/CAD is almost always a waste of time in the middle of the Tokyo session. That's ok, we need to have a life anyways, again....Who Cares?
As you go along, always keep in mind it's about survival. (I believe this is something that never really goes away.) In order to become the next great Forex trader, you have to still be in the game. Blowing your account and confidence will never help like stretching out a mini-account over the entire first year will. This of it this way: Would you rather have a horrible week that costs you $7, or $700?
This is just like any other profession, it takes time, training, and hard work to come out on top. Some can do it in a year or two, others can take longer. Sometimes people never get it right. That's life. Also, I believe in starting small because if you are playing for a buck or two at a time and become bored with Forex, the market isn't for you, as you are still in the "Get Rich Quick" mode. Drive is a big part of this as well. And drive to be a damn good trader is what counts. The money will come later. (As dumb as this may sound, after 9 months, I am still playing small. Nothing makes me happier than going up a measly 4 bucks!
)
The one thing the winners have in common? The ability to stick with it. And sticking with it means losing before you win. You might as well make those loses small. (i.e. SMALL ACCOUNT TO START.)
It is okay to trade at 10, 5, or even 1 cent a pip. It's a cheap way to get your doctorate in Forex. Because that is essentially what you need I believe. The nice thing is that if you get the training, it doesn't make any difference how much it cost you, your future profits will be the same. So why make it expensive?
If you are reading this, and saying, "Not me, I am going to be the one-in-a-million who gets rich fast!" let me take a minute to thank you for all of us that are patient, and working hard... for padding our accounts just a little.
As it it mentioned here and there, and not necessarily in depth, I thought it would possibly help some of the new guys and girls in the trading world.
There are a million ways that we all end up in this world. Some of us saw a commercial for the now infamous "Forex Made Easy", some of us read about it on the net, and some of us even just "fell into it."
We all had the same incentives in the beginning, to make money, and a lot of it. As we got started in this, we often thought of yachts, Monte Carlo, and perhaps a nice home on the beach.
Then, something odd happens. You place your first trade. Something you don't expect happens, you begin to feel fear. You more than likely have no idea as to why the price is going against you, and how far it is going to fall. You get out with a 20 pip loss. You were playing far too large, and are now down 5%.
The next thing that happens is you watch price go in your direction, and could have got a 50 pip profit. It is at this point you realize how difficult this just might be. Or, something worse happens, you learn not to panic out of the next trade, all the while not realizing that there is always a time to get out. Next trade, -50. You still have no idea what in the world is going on. It appears so random to you.
It is at this point I would like to direct you to your expectations. Forex is a very serious endeavor. Your computer is not an ATM, no matter what someone else told you.
Those little bars and candles that are on your charts represent real people. Most of us go into this thinking how we are going to first double, then triple our money, etc. Guess what? Those people think that too. A lot of them have more skill than you.
While I am not trying to discourage you, I am trying to inject some reality into your trading. Somebody wins, somebody loses. The loser can and will be YOU sometimes. It is just a matter of fact. Trust me, if I had a fool-proof way to win at this thing, I would only need to do it for a year or two, as I turn a 500 dollar mini-account into millions.
So, what we as traders need to do is set goals. As odd as this seems, the first one isn't winning, it's making trades that make sense. As you progress, you will try different things, and some will work and some won't. But there is no such thing as a sure winner. The next goal will be to lose less. I know it sounds odd, but that is really how it works.
Sometimes that well placed, intelligent decision will cost you some money. It is at this point all you can do is take comfort in the fact that you stuck to your plan. You acted with the information available, and did what you thought was right. You weren't guessing, or worse yet, chasing price.
I have not been doing this very long, but what I have learned is that it isn't easy. There is always something more to learn. This market has a 90% or more failure rate. The others make a boatload of money. If you want to be in the "Top Ten Club", you are going to have to work at this, and hard.
I believe the first year is about shaking people out. This is like going to college in so many ways, as there is the old saying "Look to the right of you, and then to left, those people aren't going to be here at graduation." With Forex, you would have to count the entire of row of people sitting with you. Brutal. But I can tell you this: The payoff is so much more than a degree can offer, if you are good.
Another expectation that needs to be killed right away is that the markets are always a good place to be. Sometimes, it is absolutely dead. It's really hard to make a buck in that environment. So what? Don't play.
I also would like to direct the new guy to Money Management. I know you hear it over and over, but trust me, it is what will keep you alive. Besides, with proper Money Management, you can play larger time frames like the 4 hour charts. Don't ever forget that you got into this for freedom as well. Staring at the charts will never make the market move, and will probably only get you into some serious trouble.
Again, sometimes there are no trades to be had. I cannot say this often enough. As you progress, you will learn for example that USD/CAD is almost always a waste of time in the middle of the Tokyo session. That's ok, we need to have a life anyways, again....Who Cares?
As you go along, always keep in mind it's about survival. (I believe this is something that never really goes away.) In order to become the next great Forex trader, you have to still be in the game. Blowing your account and confidence will never help like stretching out a mini-account over the entire first year will. This of it this way: Would you rather have a horrible week that costs you $7, or $700?
This is just like any other profession, it takes time, training, and hard work to come out on top. Some can do it in a year or two, others can take longer. Sometimes people never get it right. That's life. Also, I believe in starting small because if you are playing for a buck or two at a time and become bored with Forex, the market isn't for you, as you are still in the "Get Rich Quick" mode. Drive is a big part of this as well. And drive to be a damn good trader is what counts. The money will come later. (As dumb as this may sound, after 9 months, I am still playing small. Nothing makes me happier than going up a measly 4 bucks!
)The one thing the winners have in common? The ability to stick with it. And sticking with it means losing before you win. You might as well make those loses small. (i.e. SMALL ACCOUNT TO START.)
It is okay to trade at 10, 5, or even 1 cent a pip. It's a cheap way to get your doctorate in Forex. Because that is essentially what you need I believe. The nice thing is that if you get the training, it doesn't make any difference how much it cost you, your future profits will be the same. So why make it expensive?
If you are reading this, and saying, "Not me, I am going to be the one-in-a-million who gets rich fast!" let me take a minute to thank you for all of us that are patient, and working hard... for padding our accounts just a little.
