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What I learned after losing $300,000 trading forex

  • #21
  • Jul 28, 2020 2:59pm Jul 28, 2020 2:59pm
Hello Ceeso,

it definitely takes courage and humility to create a thread with such title.

So I believe that you indeed devoted a lot of your life in it, “fruits of knowledge are sweet but the roots are bitter”.

Too many amateurs think they are the best after trading on a demo account for 1 month with a moving average system that has doubled their over leveraged demo account with only a 70% drawdown ! Then they go live convinced they are gonna make a great living out of it right away, while they are at best years away from it. Trading is one of the most difficult and hardest profession ever.

I am not throwing the stone here, I have been that amateur too.

You are absolutely right about the randomn distribution of the winning/losing trades and that money management is the foundation, without it nothing holds. I am saying that all the time around FF. But unfortunately I am always called the arrogant one, the “know it all”, the troll, while it is actually the opposite. I guess peoples have to learn it the hard way, after all that is why we are traders, because we are ambitious and better than others...

About the randomness of the market you mentioned, it is indeed a whole other debate which perhaps I might not agree, but I would be interested to follow up.

Cheers,
LDFX Trading Ltd
  • #22
  • Jul 28, 2020 3:17pm Jul 28, 2020 3:17pm
Quoting medici
Learning to trade profitably is not about capital protection. If it were, investing in a fixed income ETF, or something similar, would be the thing to do. Learning to trade profitably is about learning to lose. Most people are afraid of losing money, and taking a loss they find painful. One needs to get to the point where taking a loss causes no bother at all, because one knows that one is profitable in the long run. That is likely the result of a combination of having a profitable method and being reasonably well bank-rolled. Pain and fear cause...

I don’t really agree.

You say that one need to get to the point where taking a loss causes no bother at all, that pain and fear cause inconsistent trading regardless of account size and that it is not about capital protection.


The only way to make the losses less to not painful are by capital preservation (low risk) unless you are a masochistic person. The more you risk per trade the greater the high when winning and the down when losing which leads to many emotions that are very bad in trading. I don’t know how someone can learn to overcome (dominated) that by not feeling anything and remaining cold blooded other than limiting greatly the risk per trade. We all trade better on a demo account...

I have been trading for many years now and I am still amazed how I hate even small losses, but they are small so it’s ok, I get over it.

Of course this is a balance that one has to found between his personality and strategy but risk management/capital preservation is the way to go.
LDFX Trading Ltd
  • #23
  • Jul 28, 2020 3:30pm Jul 28, 2020 3:30pm
Quoting driven18
I have 1 rule in trading. As you get your edge going in entering, SL and TP, 1. Go to BE asap. You will have a lot of BE's but you will have few 5:1 R:R's. The feeling of being at BE and no a fear of losing that trade will help your mental edge. To me going to BE is a priority #1 and Free Trade after that technically and mentally.
My optimizations/backtests of number of EAs shows that break even dont help in longterm. You have to have some looses - for example to sit in 30% drawdown several months and then get out.

What I see from a lot of EAs backtests (and live trading) - in order to earn 100% yearly you have to sit in about 20-30% drawdowns about 2-5 times per year. There exists no free investing. Any investor who invests in any startup experience drawdown feeling.
  • #24
  • Jul 28, 2020 3:53pm Jul 28, 2020 3:53pm
Quoting LDFX
{quote} I don’t really agree. You say that one need to get to the point where taking a loss causes no bother at all, that pain and fear cause inconsistent trading regardless of account size and that it is not about capital protection. The only way to make the losses less to not painful are by capital preservation (low risk) unless you are a masochistic person. The more you risk per trade the greater the high when winning and the down when losing which leads to many emotions that are very bad in trading. I don’t know how someone can learn to overcome...
That is your experience, and if it works for you, my congratulations to you.

My experience is different and, yes, it depends on personality.

Have you read 'The New Market Wizards' by Jack Schwager? The section titled 'Zen and the Art of Trading' is relevant for understanding where I am coming from. It has to do with the psychology of trading rather than the mechanics of trading.
  • #25
  • Jul 28, 2020 4:03pm Jul 28, 2020 4:03pm
Quoting medici
{quote} That is your experience, and if it works for you, my congratulations to you. My experience is different and, yes, it depends on personality. Have you read 'The New Market Wizards' by Jack Schwager? The section titled 'Zen and the Art of Trading' is relevant for understanding where I am coming from. It has to do with the psychology of trading rather than the mechanics of trading.

I have, also the books of Van Tharp and Douglas, interesting read.

Anyway we agree that emotions are probably the worst trader’s enemy.

I will go back to that chapter this weekend to better understand your last post and to better develop my point of view .


Cheers,
LDFX Trading Ltd
  • #26
  • Jul 28, 2020 4:15pm Jul 28, 2020 4:15pm
Quoting medici
{quote} That is your experience, and if it works for you, my congratulations to you. My experience is different and, yes, it depends on personality. Have you read 'The New Market Wizards' by Jack Schwager? The section titled 'Zen and the Art of Trading' is relevant for understanding where I am coming from. It has to do with the psychology of trading rather than the mechanics of trading.
the ability to stay even-keeled, no matter the lot size or circumstances of the trade, is one of the great joys of trading

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  • #27
  • Jul 28, 2020 4:20pm Jul 28, 2020 4:20pm
He said maekets were random 85% of the time, not that markets are random. Read well before you post please .
When you see it, BET big.
  • #28
  • Jul 28, 2020 4:24pm Jul 28, 2020 4:24pm
Hi CeeSo,

I completely agree with you, and I have a few thoughts to add.

1- by accepting the markets are random (wether it's true or not ) removes ego from the equation and leaves an ability to respond to any trade appropriately . E.g. if someone is bullish on TA or FA and stubbornly holds a bearish position they're probably screwed. If the trader doesn't hold trust in TA or FA they're eyes are open to PA and more likely to respond appropriately

2- if you feel markets are random then not much time is needed on FF as you essentially think 98% of content here is nonsense.

3- personally I like momentum trades, when the market seems to be moving with purpose and volume. I like to enter hard then peel off profits fairly quickly and leave 1 trade with a SL in line with profits taken and forget about it. This seems to be my most consistent winning strategy.

4. A MM forum would be very beneficial for a lot of traders, I hope you continue to share

Cheers Helena
  • #29
  • Jul 28, 2020 4:30pm Jul 28, 2020 4:30pm
Quoting Le.Metier
{quote} the ability to stay even-keeled, no matter the lot size or circumstances of the trade, is one of the great joys of trading - {image}

No offense, but saying that truly shows your lack of experience.

By size you mean risk ? By circumstances I am not sure what you wanna say though, because a edge defines circumstances so it would matter big time.

If you stay “even-keeled” no matter the lot size or circumstances you must probably be “trading” with a lot of risk without any setup which ultimately takes away the nature of trading, or at least the successful part of it, let alone your capital.

Care to elaborate more instead of saying such self gratifying comments without head nor tail ?
LDFX Trading Ltd
  • #30
  • Jul 28, 2020 4:37pm Jul 28, 2020 4:37pm
Quoting Rennaissance
He said maekets were random 85% of the time, not that markets are random. Read well before you post please .

So you mean/he means, that the market is not random ?

A market being random 85% of the time, which I would be interested to know where those numbers come from, means that the market is not random for him at least 15% of the time. Other regarding their strategy might say 5 or even 50% of the time depending their edge/strategy.

Which is all what the market is about, different strategies, different participants. The market is the ultimate bitch, it does what the majority dictates, how could this be randomness?

But that is whole other topic and we probably shouldn’t start.
LDFX Trading Ltd
  • #31
  • Jul 28, 2020 4:37pm Jul 28, 2020 4:37pm
Quoting Rennaissance
He said maekets were random 85% of the time, not that markets are random. Read well before you post please .
That's the thing, they're not random at all, but I won't discuss it... some people think they're random and make money, fine, but manipulation has no randomness in it, wouldn't be as lucrative for anyone.
  • #32
  • Jul 28, 2020 4:47pm Jul 28, 2020 4:47pm
Quoting GermanVargas
{quote} That's the thing, they're not random at all, but I won't discuss it... some people think they're random and make money, fine, but manipulation has no randomness in it, wouldn't be as lucrative for anyone.

You are right and also right that we shouldn’t discuss it. Can’t wait to see the thread starter start his new thread about the market’s randomness for us to argue

Let just not transform this thread in such.


Cheers,
LDFX Trading Ltd
  • #33
  • Jul 28, 2020 4:55pm Jul 28, 2020 4:55pm
Quoting LDFX
{quote} No offense, but saying that truly shows your lack of experience. By size you mean risk ? By circumstances I am not sure what you wanna say though, because a edge defines circumstances so it would matter big time. If you stay “even-keeled” no matter the lot size or circumstances you must probably be “trading” with a lot of risk without any setup which ultimately takes away the nature of trading, or at least the successful part of it, let alone your capital. Care to elaborate more instead of saying such self gratifying comments without head...
None taken.

Even-keeled refers to the mind not moving in an agitated way no matter the dollar risk, nor the pending stop (nor at posts made by other members ...wink).

The ability to maintain mental clarity in both life and trading is very satisfying, and also improves decision making.

As for your comment, “trading with a lot of risk without any setup”…my style is the reverse, quite systematic as far as manual trading goes. But don’t take my word for it, follow along at my journal.
  • #34
  • Jul 28, 2020 5:13pm Jul 28, 2020 5:13pm
Quoting Le.Metier
{quote} None taken. Even-keeled refers to the mind not moving in an agitated way no matter the dollar risk, nor the pending stop (nor at posts made by other members ...wink). The ability to maintain mental clarity in both life and trading is very satisfying, and also improves decision making. As for your comment, “trading with a lot of risk without any setup”…my style is the reverse, quite systematic as far as manual trading goes. But don’t take my word for it, follow along at my journal.

Then I must thank your even-keeled mind if my post wasn’t taken badly , which I appreciate.

I couldn’t agree more about maintaining mental clarity helps decision making and improves life, being on a personal or professional matter. How do you do that, if you are trading with a set up and without much risk if not caring about about the lot size and circumstances?

Cheers,
LDFX Trading Ltd
  • #35
  • Jul 28, 2020 5:25pm Jul 28, 2020 5:25pm
Quoting LDFX
{quote} Then I must thank your even-keeled mind if my post wasn’t taken badly , which I appreciate. I couldn’t agree more about maintaining mental clarity helps decision making and improves life, being on a personal or professional matter. How do you do that, if you are trading with a set up and without much risk if not caring about about the lot size and circumstances? Cheers,
I do care about the outcome....centered whilst caring about the outcome.

What helps me?

  1. trading in a very systematic fashion and with low risk (1%).
  2. many years experience losing, losing and more losing
  3. I've also been meditating daily (almost) for 30 years. That helps.

  • #36
  • Jul 28, 2020 5:55pm Jul 28, 2020 5:55pm
Market is extremely manipulated,by the way I am a mad Fan of ICT(Inner circle trader)and always ready to stalking the dealer
  • #37
  • Jul 28, 2020 6:13pm Jul 28, 2020 6:13pm
Quoting fxmir
Market is extremely manipulated,by the way I am a mad Fan of ICT(Inner circle trader)and always ready to stalking the dealer
manipulated by who? I can't stand this kind of stuff. drives me crazy!!!
When you see it, BET big.
  • #38
  • Jul 28, 2020 6:21pm Jul 28, 2020 6:21pm
Quoting Le.Metier
{quote} I do care about the outcome....centered whilst caring about the outcome. What helps me? trading in a very systematic fashion and with low risk (1%). many years experience losing, losing and more losing I've also been meditating daily (almost) for 30 years. That helps.

Isn’t 1% risk the contrary of what you said earlier ? “the ability to stay even-keeled, no matter the lot size or circumstances of the trade, is one of the great joys of trading”

At least the lot size does seem to matter for you, no ?
LDFX Trading Ltd
  • #39
  • Jul 28, 2020 6:23pm Jul 28, 2020 6:23pm
Hello Cee,
I appreciate your willingness to take the time (and abuse), to share what worked for you personally, in changing from a loser, to a winner.
Thanks very much.

Andy.
“The waiting is the hardest part” Tom Petty
  • #40
  • Jul 28, 2020 7:29pm Jul 28, 2020 7:29pm
Quoting LDFX
{quote} Isn’t 1% risk the contrary of what you said earlier ? “the ability to stay even-keeled, no matter the lot size or circumstances of the trade, is one of the great joys of trading” At least the lot size does seem to matter for you, no ?
My statement was not meant to suggest that I am perfect. Learning to trade with increasing mental clarity is an ongoing process.

The bullet points refer to the things I have done that have helped me and which I continue to utilise.

Nevertheless, the more I am able to remain clear minded in what would otherwise be stressful circumstances, the greater the satisfaction I derive from trading.
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