Market "wisdom" ;)

Here is an e-mail I got yesterday from a colleague trader - just to show it a bit - I also redacted some things since e-mail is tailored to pique an interest in order to participate in that person's blog/web - IN OTHER WORDS - I'm not selling anything NOR do I want this to be sold. (NEITHER IT CAN BE SOLD).

Here it is:

1) Attitude: Save Money All the Way
Dont spend money you dont have to, ever, and especially when starting out!
There is a lot to learn before you can become a consistent trader. The counterbalance to that sobering thought is that much of it is available free these days.
Trading will cost you money over both the short and long term. Trading itself carries costs, not least of which is the inevitable losses you will suffer, particularly in the early stages while you are getting on your feet. Dont compound your business costs by throwing money away getting knowledge that you could have got at no cost.

2) The Kiss Principle
I often refer to the KISS principle: Keep It Simple Stupid! I dont believe in calling anyone stupid however, so I shorten it to just KIS
Look, every beginning trader gets overwhelmed by the complexities they encounter. Thats understandable, it is a complex subject and it takes time to become comfortable with all the new knowledge. The mistake newbies make is to think that they must try to incorporate everything into their trading, learn absolutely everything at once, and most especially pile every tool and indicator and other resource available to them into their trading arsenal.
The best thing you can do when starting out is to narrow your field down to one or two things you feel comfortable with, and add to those one at a time until you have a repertoire of acquired knowledge areas and skills. Dont believe that you have to do it all overnight. Climb the mountain one step at a time, taking regular rests.

3) Have or Get Realistic Expectations
Dont expect to do a course in forex trading and then go out and trade for a living! It wont work, at least not for you although your broker will be happy with all the commissions on your losing trades.
Dont expect to start trading and be able to pay the bills and raise your family after six months. It doesnt work that way, just ask any trader who actually made it to the consistent level. It takes longer than that, usually much longer.
Expect to spend money at some time on education, and to lose money when you actually begin live trading. Even if you start out winning there will be the inevitable string of losses that will puncture your ego and shake your resolve. Be prepared for that. NOTE by DemoAntares - THIS, NOBODY CAN TEACH YOU! NOBODY!!!!
The truth is that the path to forex success is like any other journey: punctuated with failures, characterized by varying levels of hardship, plagued with doubt, fear and greed. Yes, there are triumphs along the way and that pot of gold at the end of the rainbow might exist, but it will take you a while to get there. Which brings us to the next step

4) Study Your Profession. HARD!
Ive already mentioned the fact that it will take a while and that you will have to work hard. Dont think you can make it in forex no matter how much money you have saved in your account in a short space of time like 3 to 6 months. I almost want to cry when I hear people say they are going to leave their day job because theyve saved up $10,000 to begin trading, without having done any homework regarding the markets they will be trading. NOTE: happened to me three times - and it's not excluded it won't happen again (DemoAntares).
To begin with, I was not very good at trading manually: it took me about 6 to 7 years of horrendous losses before I finally stabilised! And seriously, Im not such an extreme case. Most traders I know who are successful will tell you that it took them several years before they started to enjoy consistent success. Be prepared to study your subject. HARD. And LONG.
"several" years is a serious understatement in my opinion.

5) Be Prepared To Fight. HARD!
Youve seen the advertisement: the lucky sod reclining on some gorgeous beach somewhere as a bikini clad twenty-something wafts up to serve him some exotic cocktail in a glass frosted with ice nestled on a silver platter while seagulls drift in the sun-drenched haze yada yada yada yada yada
The truth is that lucky sod (if hes real) spent his time in the trenches earning that reward. (OR HE NEVER SUCCEEDED AND JUST SELLS FOREX STRATEGIES FOR A LIVING). Every successful trader I know can recount nights spent tossing and turning, walls punched in frustration, shameful days when stupid mistakes wiped out accounts and so on. Keep your eye on the prize by all means, but keep your mind on the job at hand.
You will lose, get used to it. You will lose. I repeat - you will lose. At some point in your trading, even if you start out on a winning streak, the forex market is going to belt the heck out of you. And it wont stop there. Trading forex will test your resolve like nothing else can. Its not for dilettantes, so conduct an honest appraisal of yourself now. You will need stamina and courage in abundance. Dont have them? Save yourself pain and money: exit now!

6) Identify the Lions, Sharks and Other Predators
As Ive said elsewhere the Internet is swamped with so-called forex guns & gurus pushing their expensive systems and claiming to be able to turn absolutely anyone into overnight millionaires. Most of these guys are scams to be avoided at all costs. How can you tell if they are a scam? Simple:
If It Sounds Too Good to Be True - It Is!
A real mentor will be honest and upfront about the risks and the costs, and especially about the effort involved to achieve success. Look for a sales pitch that incorporates these realities while at the same time showing the benefits that can be enjoyed employing whatever it is they are selling.
The flip side of learning to identify forex scams is learning to identify those folk you can trust. For the most part this comes with experience, as you learn more and see more of the market.

My note (DemoAntares): FF needs MUCH more of "articles" like these and MUCH less articles like "can you get rich trading", "simple proven 95% system", "how much do you earn trading forex" etc etc...

You get the point.

One more thing: Do you know anybody/anyone/anything that can teach you experience?

Damn I forgot second part

Here it is:

7) Start On Demo
Having done your home work in the preceding steps it’s time to start trading, but only using a demo account. Never risk real money until you are consistently profitable over a meaningful period of time, e.g. at least 3 to 6 months.
Opening a demo account with the Metatrader platform can be done with most forex brokers these days, at no cost to you.

8) Go Live!
Start small: open a real account with the minimum amount (this can be anywhere from $100 to $1000 or more depending on broker) and trade according to the knowledge of risk procedures and parameters you will have now acquired by following the steps above.

Evaluate your performance according to the principles of system verification and backtesting. (BACKTESTING = PRACTICE)
Fine tune your system and increase your risk exposure as your performance and confidence increase.

9) Don’t Go It Alone
No one makes it alone as a trader. Every successful trader at some stage associates with trader "mentors" and other traders of like mind in order to increase learning possibilities and get positive feedback for their ideas.
On the other hand, be selective in the associations and friendships you form. Some free forums are great in small doses. Others can be a trap, nothing more than time wasters where you are likely to get swamped by negativity from losers. It is a sad fact that many of these forums are largely frequented by unsuccessful traders with a very bad outlook. Avoid these people and these facilities; they will at best cloud your head, at worst put you in the frame of mind where you yourself become a loser.

10) Enforce Patience
Some of the best traders and some of the best systems/strategies hardly ever trade, compared with what your expectations probably are.
Be patient with the market, and above all be patient with yourself. Don’t let lack of signals force you into sub-optimal trades; you will only lose money over the longer term.
It’s often said because it’s always right:

The Market Will Be There Next Week; Just Make Sure You Are!

Well, having read this far you’ve passed one of the major tests: persistence, so congratulations :-)

Thanks a lot for your contribution! I think, it’s a full guideline for the newbie’s who just joined here! By the way, it’s a knowledge based profession so, there is no way without learning!

Apologies this question is not directly related to this post, do we have a tool what reads the posts? I would like to hear audio instead of reading this lengthy post,it is full of good ideas.please suggest any online audio reader.i tried some from google but they don't attach to the forums or post or page to read out.thanks

I found this ,but we need to select cut n paste on the site,i want the audio icon we drop on this post and it reads a loud instantly.

https://ttsreader.com/online-reader/

Such valuable advises.... Love this thread... Thank you.

I've posted this before, but I think it's worth repeating.

Gil Blake, interviewed in Jack Schwager’s New Market Wizards (Harper Business, 1992), attributed his success to the following formula (see p 248):

1. Focus on trading vehicles, strategies, and time horizons that suit your personality.

2. Identify non-random price behavior, while recognizing that markets are random most of the time.

3. Absolutely convince yourself that what you’ve found is statistically valid.

4. Use this to set up trading (entry and exit) rules.

5. Follow these rules.

IMHO this advice, despite being given 30 years ago, is still pretty good today.

Thank you for this thread. FF needs more of what you suggest and less of the usual tripe.

What first comes to me, in terms of a contribution to this thread, is the balance between what you think you know and what you don't know that you don't know. Let me explain.

After trading stocks for many years I got started in currencies in September of 2007. I traded short-term options only, and I devised a delta strategy based on correlations, and a theta strategy based on the seasonality of the trading day. I made amazing returns for about four months, until the crisis started to set in. The strategies stooped working, and I lost back money until I realised that.

Then in 2008, I started trading spot currencies using a S/R strategy. Again stellar returns until it stopped working a couple of years later. Again, I paid back some money for attempting to continue.

In the following years I did well using a pullback strategy on range candle charts....until that stopped working towards the end of 2012. I paid some money to discover that.

Then I discovered stock indices, and I did well trading the DAX using a very high-probability counter-trend strategy. Until that stopped working in 2016. Then I paid some money for that discovery.

Then I developed a trend trading strategy for DAX based on tick charts. That still works but, due to the short-term nature of the chart setup, one easily misses out by taking only a small chunk of the big moves. And learning not to act out my frustration over that has cost me some money.

More recently, I've added Hurst analysis to the tick chart strategy, in order to be able to plan for the big moves in a systematic and consistent way. Works wonders at present.

In conclusion then, in spite of being successful over and over again based on what I knew to be working, I've had to bite the dust repeatedly - thereby leaving the comfort of what I knew and being confronted by what I didn't know I didn't know.

I believe people who hope to trade for a living need to be aware of these realities. They are the same for everybody I know who has been successful in the long run. Just because you've got something that works, it doesn't mean you're set. A change of market conditions may be just around the corner.

And one may ask oneself:

 

1. What has worked at all times for all asset classes?

Under/over pricing occurs in all products/markets since time immemorial.