Day by Day

Each day is different and change is inevitable.

Rule no1: There has to be volatility

Wow, old post. What happened?

My theory: Predictions, theories and forecasts don't matter, what matters is what the market does. Trade what you see, not what you think.

OMG! Cool I didn't even notice the first post date till you brought it up

Yeah I'm not a noob anymore and thought I would post a few things I had learned since I first started posting on this site back then. I just stopped posting because as most noobs, I had only been trading a while and I thought that everyone here knew more than I did.

After learning to trade after a fashion with the help from a great many people not all of them profitable traders I have made some basic discoveries. These you will find litered all over forex factory. The problem is where to start as there are now thousands of posts.

So this post is as relevant as ever and I at least feel a bit more qualified to write here where "fools rush in and angels fear to tread."

Money Management. The only profitable traders are those who employ strict money management. Without it you are just one trade from being margin called. I remember spending hours trying to explain to people in one of the first real forex chat sites that getting margin called every day was not really trading. Praying to the market, pip gods or anything else has no real bearing on trading at all. This is not over kill but I stress this one more time Money Man is the key and if you don't have a clue about that just look at Auslanco-GBP/JPY.

When the risk aversion gets going its kinda like my home break when the birds are diving. Locals never paddling out unless it is small and perfect or we wear our shark shields.
Sax B has been calling the last tank for a few days now. Well done to those who could hold on.
Earning season is here, lets all earn.

The big issue that all traders face is FEAR. You will know it when it hits you in the pit of your stomach and your brain turns to jelly.

Old hands at trading will tell you how to get over it, but when it hits you all the words in the world have no effect whatsoever.

"Should I close now before I loose more on the trade or should I hang on because it might turn around," has run through traders minds like a spinning wheel since the day trading first began.

Just leaving the situation to fix itself however is nearly always the wrong choice to make.

The best trading strategies in the world have seen some of the best trades go broke when market conditions change only to see the same strategies work again the moment your account has been emptied.

I know of a trader who was a personal friend (he does not trade anymore) who used to win 14-15 straight trades in a row who thought he was bullet proof until the market killed his strategy and account in 1 month of madness.

When I first started trading I was on the receiving end of some bad pa loosing most of the account that I was trading so I speak from experience. The fact that the Japanese government intervened in the market (normal traders go to gaol for insider trading) that killed my account did not make any difference to the fact that I lost all that money. No government agency called me to apologize and offer me, my money back or a bail out loan, even though it was through manipulation pure and simple that the currency had spiked the wrong way.

It was only through this expensive experience that I learned the truth about the market. That it does not care about what you want or think or hope and pray. It does whatever it wants. Yes it can be traded with some degree of success but the truth is that no trader or system is bullet proof and strict rules need to be applied in trading at all times if you would like to make a profit let alone a living from trading.

The only way I know of to overcome the fear is through baby steps. That is to trade really small positions to start with so that the fear of loosing does not petrify your brain and turn your innards to water.

Once you have traded your system with tiny positions relative to your account balance you can start scaling up.

Some people (most people) want to have it all now and will think they can get away with just trading normally from the start. Don't be fooled the money you save while learning the ropes and building up will far outweigh the fear, stress and strain of an account melt down.

Every day I see new people on the forums calling the shots. They say things like "its gotta go down" or "we will see (1.45)" or "there will be a reversal at ??." Most of these if not all of them do not last long. It is not how many people who vouch for you that really counts but how many years you have stuck around. Listen to the people who have member since 2006 or 2007 next to their avatars, not the since 2010 know it alls or you could be FEAR'S next victim.

This thread is 4 years old and the same poster is here. Good effort Gull

This thread speaks volumes, and it's not just what he wrote, either.