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Lessons learnt from forexfactory beginners forum

  • Post #1
  • Quote
  • First Post: Aug 11, 2007 8:32am Aug 11, 2007 8:32am
Introduction


I am currently in a college and have always been interested in banking and equities. My first experience with investing in equities left my account at 50% of the original.(I lost about 3000 USD within a month). Basically, I was the typical new investor, thinking that trading was easy money. I succumbed to greed, fear and followed blind leads. I held on to stocks that were dropping by the day, hoping they would rebound, but the price just kept dropping by the day. Finally, I pulled out bruised and battered; cursing the market for all that it was worth. I was just 21 then and 3000 USD was a LOT of money to me. It took me a while to recover from this experience and started to search for a way to earn back the money lost, and then I stumbled upon forexfactory.


Lessons learnt so far


Despite reading the forums for about 3 weeks, I am still pretty much clueless about most things (perhaps I am a slow learner). I am struggling with understanding indicators, brokers, implications of news reports etc etc. However, after reading through the key threads in the beginners forum at forexfactory, my initial thoughts and expectations about forex have been molded in the way I have least expected. I hope to share these thoughts with everyone and hopefully learn more! They are as follows

 

  1. Forex trading is not a hobby. It is a profession that requires a huge amount of knowledge and discipline. I must be prepared to put in time to consistently educate and improve myself.
  2. Education can come in various forms. Through forexfactory, books and learning from other’s experiences. I must be open minded about the various resources available. However, I must be discerning about the various schools of thought.
  3. Everyone has their own trading style and one size fits all does not work in the context of forex trading. I cannot take trading systems at face value. I must fully comprehend systems and MODIFY them according to my own trading style. Forex trading requires independent thinking; I should not be following someone blindly.
  4. Forex trading is a psychological battle against one’s own self. I must follow my system strictly and not succumb to greed or fear. I must accept that losing trades are inevitable. I must not sink into a spiral of taking increasing greater risks to recoup losses.
  5. I must be prepared to demo trade and remain profitably for 6 months before I start live trading. Even then I must be prepared to blow 1 or 2 accounts in the beginning stages and not be demoralized. I must accept this is part and parcel of learning how to trade successfully.

Concluding thoughts


Forex is NOT easy money as the advertisements put it. It is an incredibly difficult journey that requires a lot of time, effort and patience. I am not expecting to get rich from forex, rather I hope to make a consistent income every month to supplement my regular job income. (I am not sure if this is the correct mentality and hope more experienced and senior members can correct me!) However, I hope that in the future I will come to love the challenges of the forex market. Even more, when I become more experienced, I hope that I will share my knowledge with beginners as myself, as I know forex trading is not simply a means of earning loads of money. It is a journey of learning and sharing ; Forex trading is a lifestyle.


This is my first post and hope that senior members can correct me if I have misinterpreted anything I have learnt from the forums so far! I hope that beginners can also learn from my experience! Feel free to PM me!

Quoting tth
Introduction

I am currently in a college and have always been interested in banking and equities. My first experience with investing in equities left my account at 50% of the original.(I lost about 3000 USD within a month). Basically, I was the typical new investor, thinking that trading was easy money. I succumbed to greed, fear and followed blind leads. I held on to stocks that were dropping by the day, hoping they would rebound, but the price just kept dropping by the day. Finally, I pulled out bruised and battered; cursing the market for all that it was worth. I was just 21 then and 3000 USD was a LOT of money to me. It took me a while to recover from this experience and started to search for a way to earn back the money lost, and then I stumbled upon forexfactory.

Lessons learnt so far


Despite reading the forums for about 3 weeks, I am still pretty much clueless about most things (perhaps I am a slow learner). I am struggling with understanding indicators, brokers, implications of news reports etc etc. However, after reading through the key threads in the beginners forum at forexfactory, my initial thoughts and expectations about forex have been molded in the way I have least expected. I hope to share these thoughts with everyone and hopefully learn more! They are as follows

  1. Forex trading is not a hobby. It is a profession that requires a huge amount of knowledge and discipline. I must be prepared to put in time to consistently educate and improve myself.
  2. Education can come in various forms. Through forexfactory, books and learning from other’s experiences. I must be open minded about the various resources available. However, I must be discerning about the various schools of thought.
  3. Everyone has their own trading style and one size fits all does not work in the context of forex trading. I cannot take trading systems at face value. I must fully comprehend systems and MODIFY them according to my own trading style. Forex trading requires independent thinking; I should not be following someone blindly.
  4. Forex trading is a psychological battle against one’s own self. I must follow my system strictly and not succumb to greed or fear. I must accept that losing trades are inevitable. I must not sink into a spiral of taking increasing greater risks to recoup losses.
  5. I must be prepared to demo trade and remain profitably for 6 months before I start live trading. Even then I must be prepared to blow 1 or 2 accounts in the beginning stages and not be demoralized. I must accept this is part and parcel of learning how to trade successfully.

Concluding thoughts

Forex is NOT easy money as the advertisements put it. It is an incredibly difficult journey that requires a lot of time, effort and patience. I am not expecting to get rich from forex, rather I hope to make a consistent income every month to supplement my regular job income. (I am not sure if this is the correct mentality and hope more experienced and senior members can correct me!) However, I hope that in the future I will come to love the challenges of the forex market. Even more, when I become more experienced, I hope that I will share my knowledge with beginners as myself, as I know forex trading is not simply a means of earning loads of money. It is a journey of learning and sharing ; Forex trading is a lifestyle.


This is my first post and hope that senior members can correct me if I have misinterpreted anything I have learnt from the forums so far! I hope that beginners can also learn from my experience! Feel free to PM me!

Looks like you've pretty well nailed it.
Nice first post, and we look forward to your development
You are on the right track, keep learning
Trade what you see, not what you think.
thank you very much for your encouragement! hope to learn more!
  • Post #5
  • Quote
  • Edited 9:31pm Aug 11, 2007 8:39pm | Edited 9:31pm
Hmmm.... thought I'd post something that's bothered me for awhile here.

I'm afraid many people coming to this forum treat it like an AMWAY business. They believe that they have ultimate influence over their success in forex.... that confidence and experience make you successful.... that internal discipline is the key to success.

I'd like to point out that many successful traders will have devastating losing years. And before you say "George Soros" let's remember that Soros has enough money to handle HUGE stop losses.... in other words, don't compare anyone in this forum to someone like him.

Okay, I am not here to bash anyone. I am just saying that luck is an inevitable part of trading. Like it or not, the shine must shine on the dog's .....


PS) I will eat my words the day I see a system that wins every single trade. Perhaps one exists. Maybe its a futures hedge against the spot price, when executed every time makes a profit.
Quoting tdion
Hmmm.... thought I'd post something that's bothered me for awhile here.

I'm afraid many people coming to this forum treat it like an AMWAY business. They believe that they have ultimate influence over their success in forex.... that confidence and experience make you successful.... that internal discipline is the key to success.

I'd like to point out that many successful traders will have devastating losing years. And before you say "George Soros" let's remember that Soros has enough money to handle HUGE stop losses.... in other words, don't compare anyone in this forum to someone like him.

Okay, I am not here to bash anyone. I am just saying that luck is an inevitable part of trading. Like it or not, the shine must shine on the dog's .....


PS) I will eat my words the day I see a system that wins every single trade. Perhaps one exists. Maybe its a futures hedge against the spot price, when executed every time makes a profit.
From the beginner material I have read in this forum, a successful trader does not need to have a system that wins every single trade. Some traders may make 7 losing trades and 3 winning trades for every 10 trades but they still come out positive at the end of the month. This is because the 3 trades they make are A trades.

However, I do concede that there are many successful people who have lost a TON of money. i.e Donald Trump almost went bankrupt once.

Sorry if I have misinterpreted as I'm a newbie
The time it will take to finish your college - you'll need at least that or 2 years, whichever comes first to start thinking about consistent profits in the markets.
Quoting Daniel Tyrkiel
The time it will take to finish your college - you'll need at least that or 2 years, whichever comes first to start thinking about consistent profits in the markets.
I hope to spend my holidays reading and learning as much as possible. It is definitely not easy as there are so many opportunities to enjoy myself and have fun with my friends. I try to think in the longer run and force myself to dedicate time each day to do some reading about forex. I am eagerly awaiting the day I get excited when reading or talking about forex!
Quoting PeterFM
Looks like you've pretty well nailed it.
Nice first post, and we look forward to your development
I forgot to add that a lot of what I learnt was inspired by your thread for newbies! I'm currently reading through the james16 chart thread which has been incredibly informative.

Thanks so much for your thread, it has been a great help!
Quote
I am eagerly awaiting the day I get excited when reading or talking about forex!

The excitement will come sooner than you think, it's the boredom and patience you want...
Quoting tth
Introduction


I am currently in a college and have always been interested in banking and equities. My first experience with investing in equities left my account at 50% of the original.(I lost about 3000 USD within a month). Basically, I was the typical new investor, thinking that trading was easy money. I succumbed to greed, fear and followed blind leads. I held on to stocks that were dropping by the day, hoping they would rebound, but the price just kept dropping by the day. Finally, I pulled out bruised and battered; cursing the market for all that it was worth. I was just 21 then and 3000 USD was a LOT of money to me. It took me a while to recover from this experience and started to search for a way to earn back the money lost, and then I stumbled upon forexfactory.
I'm always of the opinion this is one of the best things that can happen. There is no real impetus like losing enough money that you feel the pain. Personally I didn't try the cursing for a month route though... for me it was just ... hmmm, gotta make some money now because I can't rely much on my savings anymore

(for me it was only $6000 way back when but considering my life savings was only $10k at the time and my revenue stream was dying out, it was just enough to give me that little push that I needed)
Quoting Daniel Tyrkiel
The excitement will come sooner than you think, it's the boredom and patience you want...
I never thought about it that way! I guess it would be good to be bored during trading but excited when sharing your knowledge to help other?
Quoting ycomp
I'm always of the opinion this is one of the best things that can happen. There is no real impetus like losing enough money that you feel the pain. Personally I didn't try the cursing for a month route though... for me it was just ... hmmm, gotta make some money now because I can't rely much on my savings anymore

(for me it was only $6000 way back when but considering my life savings was only $10k at the time and my revenue stream was dying out, it was just enough to give me that little push that I needed)
Perhaps one has to suffer before one learns. Defeat can turn into skepticism or determination. I'm glad I went the latter path.
Quoting tth
I never thought about it that way! I guess it would be good to be bored during trading but excited when sharing your knowledge to help other?
Getting to the stage where I no longer NEED to trade every day and don't mind watching a what would have been a successful trade was the hardest thing for me.
My current win loss ratio is one loss, one break even and two wins. The wins are usually slightly larger than my losses. Taking the time to sit back and not trade for a couple of months after losing my first account helped. I didn't lose interest, I just kept watching and learning.
Quoting Daniel Tyrkiel
The excitement will come sooner than you think, it's the boredom and patience you want...
Well said.
Quoting Censce
Well said.
yup yup i hope i reach there soon!
  •  MikeG
  • | Joined Aug 2005 | Status: Empowered to Profit by James16.com | 59 Posts
Excellent post thh!! You have your head turned on straight.

Like you, finding Forex Factory was the beginning of my turning from a losing trader into a winning one. There are many great folks here worth reading. I suggest you search for all posts by Bemac, smjones, SeekingLight, Jacko, Trader888, Diallist & James16.....especially the James16 Chart Thread. It is mostly what I learned from Jim and Dial that turned me around, so take a looky-see fer yourself.

By the way, you (and everyone) can safely IGNORE any of the drivel that comes from tdion. (I pronounce it "tedium" <haha>)

Michele UU
I am an extremely satisfied customer of the James16 Group!!!
You can safely ignore me, or you can pay attention.

Quoting MikeG
By the way, you (and everyone) can safely IGNORE any of the drivel that comes from tdion. (I pronounce it "tedium" <haha>)
Quoting MikeG
Excellent post thh!! You have your head turned on straight.

Like you, finding Forex Factory was the beginning of my turning from a losing trader into a winning one. There are many great folks here worth reading. I suggest you search for all posts by Bemac, smjones, SeekingLight, Jacko, Trader888, Diallist & James16.....especially the James16 Chart Thread. It is mostly what I learned from Jim and Dial that turned me around, so take a looky-see fer yourself.

By the way, you (and everyone) can safely IGNORE any of the drivel that comes from tdion. (I pronounce it "tedium" <haha>)

Michele UU
Thanks for your kind comments! A lot of the material in my post was inspired by james16's (Jim) wise words of wisdom in the james16 chart thread.

I'm slowly (but surely) going through the thread which has 5 K+ posts! Gosh I'm only at the 800 + post. Hopefully I can finish it up soon!

I'm seriously considering joining the private forum but I'm so noob that I don't know whether its the correct time! I have not even had the confidence to demo trade yet.
Quoting tdion
You can safely ignore me, or you can pay attention.
I don't ignore anyone's comments. I read and digest them and see whether it can be applied suitably in my context.
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