In 3 months I'll hit 4 years of trading FX includes 3 months of demo and 1 and a half year of live full time trading, the rest part time live trading. I figured it's about time that I reflect back on my journey. So what have I accomplished in the past 4 years ?
Well just like everyone I was ecstatic when I first introduced to FX. I was dreaming to be "one of those" rags to riches, while I had some interest in stocks way back before I got introduced to FX (Warren Buffet value investing approach) trading seemed like an easy, and fast way to make tons of money. It probably becomes easy once you're already proficient in trading, but it will years of hard work , frustration, persistence and patience to get there.
Everyone likes money let's be honest here. So am I. It's a necessity in a capitalist world, without it one will find it hard to get by just like water or food you've got to have it - to certain extent. So early in my journey my intent was purely GAIN, I had all my focus on the final result which was how much I was going to profit. To be brutally honest, I was focused on "profits" more than anything else up until very recently. It was all wrong. My intent wasn't right. Much like running a business, your focus should be to deliver value to your customers not profit. That's a business with right intent. Money is just a by product of that process. How on earth do you think a restaurant that serves rotten food to save money on ingredients will keep on getting customers ? OK I get that but how does it translate into trading ?
If your sole purpose is profit then you naturally end up taking every setup that comes across your way that you think or feel like is going to produce a profitable trade. You have no solid data to know with 60% and above expectancy that setups you take will produce a winner. But the truth is, some setups in certain conditions offer higher win expectancy while some much lower. By allowing greed to take over, and by focusing on 'PROFIT' you voluntarily trap yourself in a vicious cycle of losing. It's like an addiction, you know you're doing something wrong but you keep on doing it anyway.
I have tried everything, from tick charts to weekly, from picking tops to bottoms, and trend, multi time frame, from currency to DAX. When I say everything, I mean literally everything. Last year and a half of full time live trading has been especially labour intense, I've learnt so much during this time. It's been like the last year of uni, I finally have a grasp on everything that I've encountered - but that doesn't mean I've mastered them all. Maybe some of you are already masters of their own method, but I'm not a genius, but not that slow neither. I've just been in the middle. STUCK in the middle of it all.
I hope I'm still making sense. I just had to get this out.
If your focused on the end result which is profit, you take every setup regardless of their expectancy. We all know this isn't going to end well. Not even breakeven. So what do I do now ?
I think I've learnt all there is to learn - I mean the foundation has been laid down for me, of course there's still much more to learn and discover you never stop learning But I'm at a point where I no longer feel the need to chase after profits and take everything that comes across my way, I'm done with that process. I'm tried of chasing after the wrong thing. I know all too well chasing aimlessly after profit will not bring consistent result which is what I should be focusing on not money.
During these 4 years I've come across variety of patterns, when I see one regardless of the time frame I have a rough idea where price will head once the pattern is present. However, I should also make it clear just because you recognize a pattern or series of patterns which seems to be my case does not mean you're on top of the world. There will be irregularities. If you haven't planned well prior, money management and RR of that trade for instance and FILTERED out the irregularities even with 50/50 expectancy or LUCK your account will go downhill pretty fast. Otherwise in any case, YOU MUST BE WELL EQUIPPED AND WELL PREPARED FOR THE BATTLE. No preparation ? Don't even dream about winning the battle. Go back to your drawing board.
So what I'm proposing for myself is 1) To identify a pattern or a series of patterns to focus (both for long and short) I MUST HAVE A FOCUS, 2) By comparing setups that produced a winner to the one that produced loss and "FILTER OUT" irregularities for consistent result, 3) By the end of phase 2 I should have a pretty good idea as to when a setup fulfills A,B,C you hit buy or sell, it should be clear as day and last phase is 4) To forward test that conditions preferably 100 trades
After the completion of these 4 phases there will be evaluation I will write more on this section after a bit of thinking and after looking at the results. For now my job is to focus on these 4 phase.
Well just like everyone I was ecstatic when I first introduced to FX. I was dreaming to be "one of those" rags to riches, while I had some interest in stocks way back before I got introduced to FX (Warren Buffet value investing approach) trading seemed like an easy, and fast way to make tons of money. It probably becomes easy once you're already proficient in trading, but it will years of hard work , frustration, persistence and patience to get there.
Everyone likes money let's be honest here. So am I. It's a necessity in a capitalist world, without it one will find it hard to get by just like water or food you've got to have it - to certain extent. So early in my journey my intent was purely GAIN, I had all my focus on the final result which was how much I was going to profit. To be brutally honest, I was focused on "profits" more than anything else up until very recently. It was all wrong. My intent wasn't right. Much like running a business, your focus should be to deliver value to your customers not profit. That's a business with right intent. Money is just a by product of that process. How on earth do you think a restaurant that serves rotten food to save money on ingredients will keep on getting customers ? OK I get that but how does it translate into trading ?
If your sole purpose is profit then you naturally end up taking every setup that comes across your way that you think or feel like is going to produce a profitable trade. You have no solid data to know with 60% and above expectancy that setups you take will produce a winner. But the truth is, some setups in certain conditions offer higher win expectancy while some much lower. By allowing greed to take over, and by focusing on 'PROFIT' you voluntarily trap yourself in a vicious cycle of losing. It's like an addiction, you know you're doing something wrong but you keep on doing it anyway.
I have tried everything, from tick charts to weekly, from picking tops to bottoms, and trend, multi time frame, from currency to DAX. When I say everything, I mean literally everything. Last year and a half of full time live trading has been especially labour intense, I've learnt so much during this time. It's been like the last year of uni, I finally have a grasp on everything that I've encountered - but that doesn't mean I've mastered them all. Maybe some of you are already masters of their own method, but I'm not a genius, but not that slow neither. I've just been in the middle. STUCK in the middle of it all.
I hope I'm still making sense. I just had to get this out.
If your focused on the end result which is profit, you take every setup regardless of their expectancy. We all know this isn't going to end well. Not even breakeven. So what do I do now ?
I think I've learnt all there is to learn - I mean the foundation has been laid down for me, of course there's still much more to learn and discover you never stop learning But I'm at a point where I no longer feel the need to chase after profits and take everything that comes across my way, I'm done with that process. I'm tried of chasing after the wrong thing. I know all too well chasing aimlessly after profit will not bring consistent result which is what I should be focusing on not money.
During these 4 years I've come across variety of patterns, when I see one regardless of the time frame I have a rough idea where price will head once the pattern is present. However, I should also make it clear just because you recognize a pattern or series of patterns which seems to be my case does not mean you're on top of the world. There will be irregularities. If you haven't planned well prior, money management and RR of that trade for instance and FILTERED out the irregularities even with 50/50 expectancy or LUCK your account will go downhill pretty fast. Otherwise in any case, YOU MUST BE WELL EQUIPPED AND WELL PREPARED FOR THE BATTLE. No preparation ? Don't even dream about winning the battle. Go back to your drawing board.
So what I'm proposing for myself is 1) To identify a pattern or a series of patterns to focus (both for long and short) I MUST HAVE A FOCUS, 2) By comparing setups that produced a winner to the one that produced loss and "FILTER OUT" irregularities for consistent result, 3) By the end of phase 2 I should have a pretty good idea as to when a setup fulfills A,B,C you hit buy or sell, it should be clear as day and last phase is 4) To forward test that conditions preferably 100 trades
After the completion of these 4 phases there will be evaluation I will write more on this section after a bit of thinking and after looking at the results. For now my job is to focus on these 4 phase.
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