Hi guys, i got an idea to share some of my experiences with forex trading here with forex community.
I dont think that im some kind of super trader or something like that. My background come from love with math (like numbers), programming skills (logic) and business (money money). I have experience from my own trading, from managing capital and from some business with fx broker company as well, so i saw lot of during that times. I dont sell anything here, i dont need it, i just had some feeling, that i want to share it for free, because i believe in power of knowledge, more you read, more you will probably know and at my beginings i read here at forex factory quiet offen and get some interesting ideas.
Here are some my notes, what i think are the biggest obstacles at forex market:
1) Lack of knowledge - i see everyday ads for fx or cfd brokers, which looks pretty cool. You can start trading allmost immediately with high leverage from your mobile phone and make really lot of money. Why on forex or CFD? Its simple, there are quit big money from spread. From my own experience me as student at University i was able to make to my fx broker around 5k USD per month from spread, on another hand, with similar money on stocks my stock broker made only 20 USD at average. From my experience stock trading its much more easier than trading fx or intraday trading.
2) Overtrading - its big problem, i see most of the young fx traders are intraday traders. They pay tons of money for spread, which is one of the disadvantage in long run.
3) Stop losses - it was major problem before end of SNB intervention at EURCHF. Many traders thought, that their stops are guarateed. They are not. In EU its nowdays fine, that there is limitation of 0 EUR balance protection.
4) Money management - as i mentioned before, im not magic trader. I discovered that i have good times and bad times. The biggest experience come from lossing account. After third loose of my account i realised, that there is no one trader on this planet, that can be everymonth in profit. The biggest magic its not money management in point of view at one single trade, but money management in point of view of good trading series and bad trading series. So i say, its important how many times more you will make during good series than you loose in bad series. This is really important to understand not in 3 month trading, but in long run.
For my own trading system i found, that the best combination is to risk 5 percent of my capital into trading series, if the trading series is successful i will make 10x, if not, i will loose deposit. In long run i have 45 percent of good series and 55 percent of bad series. One trading series take me around 3 - 6 months depends on market.
5) Too fast too much - many traders started trading forex, because they think that they can become rich really fast and easy. Its not true. Yes you can make with some kind of luck several times nice money, but once you will trade several years, you will realize, that some day will come really bad day and you will loose everything, because of lack of systematic risk management.
6) There is no magic trading system - allways i see traders, who are looking for some magic trading robot. I was the same. Thanks to my IT backround i was luck enought to create several own robots, they worked several months, but after that failed. One day i got an idea to create special robot, which i will backtest all possible combinations of 5 best know indicators and i realised, that any of these combinations was able to cover spread in long run.
7) Black swan will come - We dont know when, but it will come. Its simple math probability. The problem for most of the traders is, that even if they are good traders, even if they will build some capital over longer period of time and are quiet successful, one day will come special event, which will be 50:50 change, that it will destroy all of your afford during last several hard years.
So thats it. Sorry for my english, im not native speaker.
I wrote these points to point some of the obstacles, so dont take it that im 100 percent true, its from my point of view, i wrote it mainly to give you idea what about to think, when you think, that you have right trading system/strategy.
If you will have any question, you can send me here private message, or reply to this thread or reach me at email: [email protected]
Pls be pattient for my answer.
Have a great trading and enjoy profit from Fx trading.
I dont think that im some kind of super trader or something like that. My background come from love with math (like numbers), programming skills (logic) and business (money money). I have experience from my own trading, from managing capital and from some business with fx broker company as well, so i saw lot of during that times. I dont sell anything here, i dont need it, i just had some feeling, that i want to share it for free, because i believe in power of knowledge, more you read, more you will probably know and at my beginings i read here at forex factory quiet offen and get some interesting ideas.
Here are some my notes, what i think are the biggest obstacles at forex market:
1) Lack of knowledge - i see everyday ads for fx or cfd brokers, which looks pretty cool. You can start trading allmost immediately with high leverage from your mobile phone and make really lot of money. Why on forex or CFD? Its simple, there are quit big money from spread. From my own experience me as student at University i was able to make to my fx broker around 5k USD per month from spread, on another hand, with similar money on stocks my stock broker made only 20 USD at average. From my experience stock trading its much more easier than trading fx or intraday trading.
2) Overtrading - its big problem, i see most of the young fx traders are intraday traders. They pay tons of money for spread, which is one of the disadvantage in long run.
3) Stop losses - it was major problem before end of SNB intervention at EURCHF. Many traders thought, that their stops are guarateed. They are not. In EU its nowdays fine, that there is limitation of 0 EUR balance protection.
4) Money management - as i mentioned before, im not magic trader. I discovered that i have good times and bad times. The biggest experience come from lossing account. After third loose of my account i realised, that there is no one trader on this planet, that can be everymonth in profit. The biggest magic its not money management in point of view at one single trade, but money management in point of view of good trading series and bad trading series. So i say, its important how many times more you will make during good series than you loose in bad series. This is really important to understand not in 3 month trading, but in long run.
For my own trading system i found, that the best combination is to risk 5 percent of my capital into trading series, if the trading series is successful i will make 10x, if not, i will loose deposit. In long run i have 45 percent of good series and 55 percent of bad series. One trading series take me around 3 - 6 months depends on market.
5) Too fast too much - many traders started trading forex, because they think that they can become rich really fast and easy. Its not true. Yes you can make with some kind of luck several times nice money, but once you will trade several years, you will realize, that some day will come really bad day and you will loose everything, because of lack of systematic risk management.
6) There is no magic trading system - allways i see traders, who are looking for some magic trading robot. I was the same. Thanks to my IT backround i was luck enought to create several own robots, they worked several months, but after that failed. One day i got an idea to create special robot, which i will backtest all possible combinations of 5 best know indicators and i realised, that any of these combinations was able to cover spread in long run.
7) Black swan will come - We dont know when, but it will come. Its simple math probability. The problem for most of the traders is, that even if they are good traders, even if they will build some capital over longer period of time and are quiet successful, one day will come special event, which will be 50:50 change, that it will destroy all of your afford during last several hard years.
So thats it. Sorry for my english, im not native speaker.
I wrote these points to point some of the obstacles, so dont take it that im 100 percent true, its from my point of view, i wrote it mainly to give you idea what about to think, when you think, that you have right trading system/strategy.
If you will have any question, you can send me here private message, or reply to this thread or reach me at email: [email protected]
Pls be pattient for my answer.
Have a great trading and enjoy profit from Fx trading.
My blog: forex-scalping.com | Exponencial money management is the key!
