This is my first forum post but I am not a newbie. I have lost about 300,000$ trading forex over the course of 5 years and it has been a huge struggle, to say the least but I kept persevering and educating myself and this year I am finally profitable to the tune of $130,000. After all this time and stress (and finally a very good mentor) I figured out some basic truths about forex trading.
1. You have to Master Money Management first and foremost. Forget EVERYTHING else and learn to lose like a professional.
I spent tens of thousands of dollars on courses and 99% of them teach you how to "get into a market" it was not till I finally learned how to get out of a market that my profits skyrocketed because the losses where controlled.
Understanding variance (math of probabilities) is where I failed. I did not understand the simple math of randomness. I was expecting to win a lot more trades then I was actually winning. Even if you have a process that is a winner 75% of the time it is "possible" that you could have 25 losing trades in a row and then have 75 winning trades right after. In reality, I am closer to 64% winning trades so I now have a process that will be fine even if I had 36 losing trades in a row. This is an exaggeration obviously but still, you have to assume it is possible and be ready for that both in your money management rules and emotionally.
I now use a Kelly Criterion Money Management spreadsheet and stick to it like a crazy person. I have become OBSESSED with Money Management.
2. Albert Einstien said " “Everything should be made as simple as possible, but no simpler.”
After you get the right education and do the hard work of testing and getting confidence in your process trading is simple BUT it still takes a lot of time to gain confidence and learn the process of trading right. The rule of 10,000 hours was very real for me and if I could do it all over again I would have demo traded and not risked a penny until I proved to myself over a large sample size of 500-1000 trades that I had a true edge and the right habits to do this with real money. Many people will argue that demo trading is useless but I completely disagree. I think that the brokers are the trolls telling you that lie. If you can't make money for 3-5 months demo trading you have zero chance of making money with real $$$.
What I do now is actually pretty simple but there are so many nuances in my subconscious that I don't even have to think too much I just recognize what is a good trade vs what is not such a good trade. I have built "good execution habits" into my subconscious. I don't even need to think in the heat of the battle I just execute and I could never have done that until I stopped bleeding real money and I demo traded for 5 months straight day after day building these new habits.
So when you hear people telling you demo trading is useless just ask yourself if you are happy with your results trading with real $$$ right now or if you need to stop doing what the retail trading world is telling you to do. Remember 98% of the people in here are losing like I was and even I could be lying to you and still losing money. (I plan on sharing some trades in this thread so I will leave that up to you to decide). The bottom line do not trust anyone in these forums including me. I listened to way too many other people without testing things out for myself. Do not make that mistake!.
3. The Markets are Random 85% of the time.
This is going to be a big pill for most of you to swallow but I am going to back it up with facts and math in some future posts so, for now, please do not troll me the math is coming soon.
Most of you will read this and freak out BUT if you really think about it for a few minutes it is really really good news. It means that 15% of the time there is a good directional edge in the markets and all it takes is PATIENCE to wait for the market to stop being random and exploit that none randomness.
When I examined where all my money was lost it was in random markets that were very unclear and ambiguous so in other words, I was just trading for the sake of placing trades. This can happen because of many reasons and I will discuss those reasons later and give you some solutions to fix this.
Over Trading is why you are losing money and again I believe this is one of the lies that brokers want you to believe because over trading makes them very rich.
So take solitude and happiness in accepting the fact that the market is random 85% of the time because we have a solution. We simply do not trade 85% of the time and we patiently wait for edges to appear and we stop buying your broker's new yachts every year.
These are the 3 main truths that changed everything for me and I promise I will expand on them in great detail later in this thread.
That is enough for the first post.
Fell free to troll me and I am totally expecting it and that leads me to one last "trading truth" I will share as a bonus.
4. You have to stop giving a sh#t what other people think of your trading.
I use to be crazy about proving things to other traders and being right all the time. I do not need to be right all the time I just need to be right 51% of the time and I can get very wealthy from this business and with the right Money Management I only need to be right 39% of the time to break even and everything after that is gravy and profits. (I will expand more on this later)
I wish you all much love and happiness and hope you enjoy this thread.
Cee
1. You have to Master Money Management first and foremost. Forget EVERYTHING else and learn to lose like a professional.
I spent tens of thousands of dollars on courses and 99% of them teach you how to "get into a market" it was not till I finally learned how to get out of a market that my profits skyrocketed because the losses where controlled.
Understanding variance (math of probabilities) is where I failed. I did not understand the simple math of randomness. I was expecting to win a lot more trades then I was actually winning. Even if you have a process that is a winner 75% of the time it is "possible" that you could have 25 losing trades in a row and then have 75 winning trades right after. In reality, I am closer to 64% winning trades so I now have a process that will be fine even if I had 36 losing trades in a row. This is an exaggeration obviously but still, you have to assume it is possible and be ready for that both in your money management rules and emotionally.
I now use a Kelly Criterion Money Management spreadsheet and stick to it like a crazy person. I have become OBSESSED with Money Management.
2. Albert Einstien said " “Everything should be made as simple as possible, but no simpler.”
After you get the right education and do the hard work of testing and getting confidence in your process trading is simple BUT it still takes a lot of time to gain confidence and learn the process of trading right. The rule of 10,000 hours was very real for me and if I could do it all over again I would have demo traded and not risked a penny until I proved to myself over a large sample size of 500-1000 trades that I had a true edge and the right habits to do this with real money. Many people will argue that demo trading is useless but I completely disagree. I think that the brokers are the trolls telling you that lie. If you can't make money for 3-5 months demo trading you have zero chance of making money with real $$$.
What I do now is actually pretty simple but there are so many nuances in my subconscious that I don't even have to think too much I just recognize what is a good trade vs what is not such a good trade. I have built "good execution habits" into my subconscious. I don't even need to think in the heat of the battle I just execute and I could never have done that until I stopped bleeding real money and I demo traded for 5 months straight day after day building these new habits.
So when you hear people telling you demo trading is useless just ask yourself if you are happy with your results trading with real $$$ right now or if you need to stop doing what the retail trading world is telling you to do. Remember 98% of the people in here are losing like I was and even I could be lying to you and still losing money. (I plan on sharing some trades in this thread so I will leave that up to you to decide). The bottom line do not trust anyone in these forums including me. I listened to way too many other people without testing things out for myself. Do not make that mistake!.
3. The Markets are Random 85% of the time.
This is going to be a big pill for most of you to swallow but I am going to back it up with facts and math in some future posts so, for now, please do not troll me the math is coming soon.
Most of you will read this and freak out BUT if you really think about it for a few minutes it is really really good news. It means that 15% of the time there is a good directional edge in the markets and all it takes is PATIENCE to wait for the market to stop being random and exploit that none randomness.
When I examined where all my money was lost it was in random markets that were very unclear and ambiguous so in other words, I was just trading for the sake of placing trades. This can happen because of many reasons and I will discuss those reasons later and give you some solutions to fix this.
Over Trading is why you are losing money and again I believe this is one of the lies that brokers want you to believe because over trading makes them very rich.
So take solitude and happiness in accepting the fact that the market is random 85% of the time because we have a solution. We simply do not trade 85% of the time and we patiently wait for edges to appear and we stop buying your broker's new yachts every year.
These are the 3 main truths that changed everything for me and I promise I will expand on them in great detail later in this thread.
That is enough for the first post.
Fell free to troll me and I am totally expecting it and that leads me to one last "trading truth" I will share as a bonus.
4. You have to stop giving a sh#t what other people think of your trading.
I use to be crazy about proving things to other traders and being right all the time. I do not need to be right all the time I just need to be right 51% of the time and I can get very wealthy from this business and with the right Money Management I only need to be right 39% of the time to break even and everything after that is gravy and profits. (I will expand more on this later)
I wish you all much love and happiness and hope you enjoy this thread.
Cee
