I won't be going into great depth with this but I may come back and add more as time goes on but if you read through you should be able to learn something if you are new or at least I hope so and save yourself some time. If some of you think what I have said is wrong that's fine I'm not asking you to trust me nor am I giving away any system or trying to sell something any decisions you make with trading should be done after a lot of research and testing don't take other peoples word for anything in this game learn to think for yourself.
WHY I STARTED
Let me start by saying I have been learning to trade now for just over 2 years and let me tell you it's been extremely difficult and mentally draining. Over the past 2 years due to personal circumstances I have been out of work and had far too much time on my hands and decided to learn something to keep me busy.
When I started learning this I never imagined how deep it would take me or how difficult it may be I can safely say that I've easily put in over 6000 hours to this which now just sounds absolutely mad and I'm by far no expert or claim to be.
So for those of you thinking of learning forex just know it will not happen overnight and it takes a great deal of time my 2 years could be someone else's 4 or 5 years if you are working with limited time on the chart.
The harsh reality is after over 6000 hours I still have a lot to learn.
THINGS I LEARNT IN THE BEGINNING
Just like many of you, I knew absolutely nothing at the start such as a stop-loss, risk management, what a candle was, or how to read a chart's structure, and just how important being disciplined was with rules put in place.
Now I'm aware that in order to be successful you have to have a good system in place great risk management and rules in place without them you're going to fail.
If I started again risk management would be above everything else before moving on and learning to read the charts and structure such as support and resistance and identifying if it's a trending market or ranging market. If you cant read the chart indicators will do you no good and you are setting yourself up for failure.
DONT TRUST ANYONE
Now I'm not saying everyone is out to scam you or trick you there may be some genuine people out there but you need to be aware that most of these so-called gurus and educators aren't even traders and cherry-pick trade examples to show you if they don't show you live trades then why would you trust them.
Most of these people make money from you for courses that are absolute garbage and they also make money from broker commissions and referrals if you don't believe me go over to youtube since this is probably where many of you will look first and search trading strategies and find me someone who doesn't have some kind of referral link in the description or isn't trying to get you to buy a course.
Be warned and always do your own testing and research never trust someone else without confirming the information for yourself most of the information in these courses can be obtained freely with the correct research they aren't selling anything magical so keep your money.
INDICATORS
There is no magical 100% win rate indicator so before you go putting a thousand indicators on your chart and waiting for all of them to be aligned thinking you have to be right think again so if anyone said they win 100% of the time or even 90% of the time I really doubt it unless they are using some kind of martingale or hedging strategy which is extremely risky and the sequence will fail eventually and most likely blow your account.
Having said that I do use indicators to generate signals however most will be rubbish after further analysis but before you use indicators please learn price action and market structure to validate your signals.
Keep it simple don't overcomplicate things or you will end up confused and making bad decisions.
RISK MANAGEMENT
Don't become part of the 90/90/90 statistic 90% of traders lose 90% of their capital in 90 days.
Having good risk management should be the number one priority and personally, you hear a lot of people saying you should risk between 1% and 2% per trade i believe this is wrong, and if you want to outlast most of these people it should be 0.5% per trade or less. Think about it if your trading multiple markets and risk 2% per trade for example on $100,000 and lose 10 times in a row which can easily happen you are now down to $80,000 and have to make up 25% to get back to your initial capital meaning you just lost a quarter of your whole account in 10 trades now you are deep in the whole.
Risk less and make less but you will be able to stay in the game much longer and withstand them losing streaks much better don't overtrade this is a big killer and be disciplined don't trade for the sake of it and don't trade every currency at all times of day depending on what exchange is open some may move quickly whilst others may not move at all.
Realistically from a lot of testing you should be looking to gain 2x your risk or more on every trade don't trade systems that are 1:1 in the long run you're going to run into problems or growth is going to be small but that's just my opinion some of you may be doing well with certain criteria trading this way but personally, I wouldn't trade this way.
WHAT TO TRADE
This is something you will have to find out for yourself and work around your timezone but I would trade the most active currencies for the time of day you wish to trade so do your research on currency pairs and what session you wish to trade whether that's the London session such as myself of the New York session or even the Asian session.
WATCH OUT FOR SLIPPAGE AND THE SPREADS WIDENING AND STAY OUT OF THE NEWS
If you are trading the crossover from one session to another usually when one session closes and another one opens the spreads will widen and if you have a tight stop even if the price doesn't hit your stop loss due to the widening of the spread you may get knocked out of that trade anyway for me i trade london session but will sometimes have a trade open late still so at 9pm and 10pm GMT it will widen so I may move my stop temporarily until it calms down but monitor it closely to prevent large losses.
Also in anticipation of high impact news, this can happen so you should be checking on a daily basis what news may be coming out that day and probably trying to stay out of trading or manage it a lot more closely.
HOW I DEVELOPED MY STRATEGY
When I developed my strategy I first decided trend trading would be for me so before you start what do you want to trade is it ranges, breakouts, trends pick one then decide on a timeframe, and if you want to be a scalper, day trader, swing trader, or position trader.
After I picked a timeframe and that trend trading would be best for me I then moved on to testing a lot of different strategies and I did this by creating expert advisers with set rules but I do not let EAs trade all trading will be done manually now don't be discouraged at this stage I don't know how to code mql4 in fact I used a website called algowizard you can go and google them I should mention that I do not have anything to do with them but they are a great option for those who cant code.
Once I had created my Expert Adviser I then went on to setting up mt4 to achieve 99.9% tick data so it was as accurate as it could be again goto google and research if you don't know any of this.
Once that was done then I would run the EA on all 28 pairs and the only thing I would optimize was the take profit and stop-loss since they would be the only dynamic factors I take into consideration since I will be trading this strategy manually.
All strategies were testing over at least 3 years to be deemed viable to trade.
Now if a currency returned more fails than passes in the strategy tester then that would be for the bin and no longer considered to trade this strategy with this specific currency. I would also look at the profit factor, expectancy and drawdown if I wasn't happy with any of these values then guess what that currency isn't getting traded.
I would do this with all 28 pairs and try to narrow it down to 5 pairs have fun doing this because it takes a lot of time developing a strategy and the testing but if you want to win and you want to make your system as mechanical as possible then it has to be done.
Now that I have 5 pairs then I would go on to create an indicator with the same set of rules to display signals on the chart you can find sites to build indicators.
After creating my custom indicator I would then move on to do manual backtesting over a couple of years and here is the thing with EAs they take every single signal that occurs and they were all profitable still not taking into account if the markets ranging or trending.
Now in the manual backtesting after checking many of the signals providing you learned market structure you will notice that in fact many of the bad signals can be filtered out meaning a betting win rate and better return in theory right but I'm not a robot and won't be catching every trade but that's fine I'm not looking to get rich overnight I just want a good system to follow which statistically shown relatively low drawdown with good returns.
Only after doing all of this do I trade a strategy and after 2 years I only have 2 strategies I trust and I will develop more over time because I think its important to be diverse in your trading but that's all you need you don't have to trade every single pair or every day.
Now if this isn't for you that's fine you can still develop strategies and do a lot of manual backtesting but for me, this seemed like a good way to go to get a lot of data relatively quickly and then get signals emailed to me so I'm not looking at the charts all day long.
If you can't be bothered putting the time in or testing a strategy for yourself and think that you can jump into the market and make money you are wrong think again and if this is indeed how you think then I would suggest staying away from trading and keeping your shirt.
THAT'S IT THANKS FOR READING
If you read all of this then great let me know your thoughts I may come back and edit it and add bits it was a bit rushed but your input would be great.
WHY I STARTED
Let me start by saying I have been learning to trade now for just over 2 years and let me tell you it's been extremely difficult and mentally draining. Over the past 2 years due to personal circumstances I have been out of work and had far too much time on my hands and decided to learn something to keep me busy.
When I started learning this I never imagined how deep it would take me or how difficult it may be I can safely say that I've easily put in over 6000 hours to this which now just sounds absolutely mad and I'm by far no expert or claim to be.
So for those of you thinking of learning forex just know it will not happen overnight and it takes a great deal of time my 2 years could be someone else's 4 or 5 years if you are working with limited time on the chart.
The harsh reality is after over 6000 hours I still have a lot to learn.
THINGS I LEARNT IN THE BEGINNING
Just like many of you, I knew absolutely nothing at the start such as a stop-loss, risk management, what a candle was, or how to read a chart's structure, and just how important being disciplined was with rules put in place.
Now I'm aware that in order to be successful you have to have a good system in place great risk management and rules in place without them you're going to fail.
If I started again risk management would be above everything else before moving on and learning to read the charts and structure such as support and resistance and identifying if it's a trending market or ranging market. If you cant read the chart indicators will do you no good and you are setting yourself up for failure.
DONT TRUST ANYONE
Now I'm not saying everyone is out to scam you or trick you there may be some genuine people out there but you need to be aware that most of these so-called gurus and educators aren't even traders and cherry-pick trade examples to show you if they don't show you live trades then why would you trust them.
Most of these people make money from you for courses that are absolute garbage and they also make money from broker commissions and referrals if you don't believe me go over to youtube since this is probably where many of you will look first and search trading strategies and find me someone who doesn't have some kind of referral link in the description or isn't trying to get you to buy a course.
Be warned and always do your own testing and research never trust someone else without confirming the information for yourself most of the information in these courses can be obtained freely with the correct research they aren't selling anything magical so keep your money.
INDICATORS
There is no magical 100% win rate indicator so before you go putting a thousand indicators on your chart and waiting for all of them to be aligned thinking you have to be right think again so if anyone said they win 100% of the time or even 90% of the time I really doubt it unless they are using some kind of martingale or hedging strategy which is extremely risky and the sequence will fail eventually and most likely blow your account.
Having said that I do use indicators to generate signals however most will be rubbish after further analysis but before you use indicators please learn price action and market structure to validate your signals.
Keep it simple don't overcomplicate things or you will end up confused and making bad decisions.
RISK MANAGEMENT
Don't become part of the 90/90/90 statistic 90% of traders lose 90% of their capital in 90 days.
Having good risk management should be the number one priority and personally, you hear a lot of people saying you should risk between 1% and 2% per trade i believe this is wrong, and if you want to outlast most of these people it should be 0.5% per trade or less. Think about it if your trading multiple markets and risk 2% per trade for example on $100,000 and lose 10 times in a row which can easily happen you are now down to $80,000 and have to make up 25% to get back to your initial capital meaning you just lost a quarter of your whole account in 10 trades now you are deep in the whole.
Risk less and make less but you will be able to stay in the game much longer and withstand them losing streaks much better don't overtrade this is a big killer and be disciplined don't trade for the sake of it and don't trade every currency at all times of day depending on what exchange is open some may move quickly whilst others may not move at all.
Realistically from a lot of testing you should be looking to gain 2x your risk or more on every trade don't trade systems that are 1:1 in the long run you're going to run into problems or growth is going to be small but that's just my opinion some of you may be doing well with certain criteria trading this way but personally, I wouldn't trade this way.
WHAT TO TRADE
This is something you will have to find out for yourself and work around your timezone but I would trade the most active currencies for the time of day you wish to trade so do your research on currency pairs and what session you wish to trade whether that's the London session such as myself of the New York session or even the Asian session.
WATCH OUT FOR SLIPPAGE AND THE SPREADS WIDENING AND STAY OUT OF THE NEWS
If you are trading the crossover from one session to another usually when one session closes and another one opens the spreads will widen and if you have a tight stop even if the price doesn't hit your stop loss due to the widening of the spread you may get knocked out of that trade anyway for me i trade london session but will sometimes have a trade open late still so at 9pm and 10pm GMT it will widen so I may move my stop temporarily until it calms down but monitor it closely to prevent large losses.
Also in anticipation of high impact news, this can happen so you should be checking on a daily basis what news may be coming out that day and probably trying to stay out of trading or manage it a lot more closely.
HOW I DEVELOPED MY STRATEGY
When I developed my strategy I first decided trend trading would be for me so before you start what do you want to trade is it ranges, breakouts, trends pick one then decide on a timeframe, and if you want to be a scalper, day trader, swing trader, or position trader.
After I picked a timeframe and that trend trading would be best for me I then moved on to testing a lot of different strategies and I did this by creating expert advisers with set rules but I do not let EAs trade all trading will be done manually now don't be discouraged at this stage I don't know how to code mql4 in fact I used a website called algowizard you can go and google them I should mention that I do not have anything to do with them but they are a great option for those who cant code.
Once I had created my Expert Adviser I then went on to setting up mt4 to achieve 99.9% tick data so it was as accurate as it could be again goto google and research if you don't know any of this.
Once that was done then I would run the EA on all 28 pairs and the only thing I would optimize was the take profit and stop-loss since they would be the only dynamic factors I take into consideration since I will be trading this strategy manually.
All strategies were testing over at least 3 years to be deemed viable to trade.
Now if a currency returned more fails than passes in the strategy tester then that would be for the bin and no longer considered to trade this strategy with this specific currency. I would also look at the profit factor, expectancy and drawdown if I wasn't happy with any of these values then guess what that currency isn't getting traded.
I would do this with all 28 pairs and try to narrow it down to 5 pairs have fun doing this because it takes a lot of time developing a strategy and the testing but if you want to win and you want to make your system as mechanical as possible then it has to be done.
Now that I have 5 pairs then I would go on to create an indicator with the same set of rules to display signals on the chart you can find sites to build indicators.
After creating my custom indicator I would then move on to do manual backtesting over a couple of years and here is the thing with EAs they take every single signal that occurs and they were all profitable still not taking into account if the markets ranging or trending.
Now in the manual backtesting after checking many of the signals providing you learned market structure you will notice that in fact many of the bad signals can be filtered out meaning a betting win rate and better return in theory right but I'm not a robot and won't be catching every trade but that's fine I'm not looking to get rich overnight I just want a good system to follow which statistically shown relatively low drawdown with good returns.
Only after doing all of this do I trade a strategy and after 2 years I only have 2 strategies I trust and I will develop more over time because I think its important to be diverse in your trading but that's all you need you don't have to trade every single pair or every day.
Now if this isn't for you that's fine you can still develop strategies and do a lot of manual backtesting but for me, this seemed like a good way to go to get a lot of data relatively quickly and then get signals emailed to me so I'm not looking at the charts all day long.
If you can't be bothered putting the time in or testing a strategy for yourself and think that you can jump into the market and make money you are wrong think again and if this is indeed how you think then I would suggest staying away from trading and keeping your shirt.
THAT'S IT THANKS FOR READING
If you read all of this then great let me know your thoughts I may come back and edit it and add bits it was a bit rushed but your input would be great.
