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Considering a career in trading

  • #1
  • First Post: Mar 9, 2009 5:59pm Mar 9, 2009 5:59pm
Hi everyone im a new member here!
Although i've read many of the really helpful articles on here, I'm looking for some advice from professionals traders.
I'm 27, recently graduated (my 1st degree is in Computing, my 2nd is in Business Admin.) and I'm currently working for a company that deals with Forex. So as you understand i started trading demo accounts, and loved it.
In fact i became so fascinated by it, that i've stopped much of my other activities in order to learn more about how things tick.
I have been doing my research on many things such as indicators, patterns, etc, while still trying to figure which timeframe suits me, a basic outline for a strategy, and so on so forth.
However what i want is the opinion of the real professionals who do this for a living, whether it is within a company, or freelance.
Is this a profession worth looking into? What problems did you encounter, what is the psychological toll on a professional, on a trader's family, etc...
Suppose you could you turn back in time, 10-20-30 years ago, would you still chose to follow the same path?
I plan on acquiring some working experience for 2-3 years, and then perhaps attempting a Masters in Financial analysis, which i would imagine could help me even further in a trading / investing carreer.
I would really like to hear some personal opinions and advice on the matter.
I apologize if this is not the correct place to be posting such questions.
  • #2
  • Edited Mar 10, 2009 4:04am Mar 9, 2009 6:43pm | Edited Mar 10, 2009 4:04am
Is this a profession worth looking into?
In my opinion, yes.

What problems did you encounter?
Basically, undercapitalization. Later on, overcapitalization, which led to a catastrophic 98% loss which took me one whole year to assume psychologically... and will hopefully take me about a dozen years to recover...
Now, it's again undercapitalization, as my actual strategy is much tighter on MM.

What is the psychological toll on a professional?
Learning that it is ok to be wrong sometimes has been (and still is but under control) the hardest part for me. Assuming that there will be losses and they better be cut when small. Reconciliating the analyst and the trader (operator) in me, which used to go opposite ways all the time... especially because of doubt or second thoughts at the moment of opening a trade.
Now I'm ok (I think - or maybe went totally crazy, lol) but that whole year watching charts all day and fearing placing a single trade was awful... on the other side, I am now reaping the positive results of all those hours of screen time...

Trading will teach you more about yourself in a few years than any of those huge psychology books. But if you are persistent, you'll finally get to a point where knowledge becomes awareness and you'll really "know".

What is the psychological toll on a trader's family, etc...?
There shouldn't be if from the start you organize your trading time just like you would for a regular business. Chose the market session that suits you the best, both for your strategy and your timezone. Of course your family should be in agreement with your trading goals... working against the will or understanding of one's own loved ones can be very stressful.

Suppose you could you turn back in time, 10-20-30 years ago, would you still chose to follow the same path?

Wow, 30 years, yes of course!
But knowing all that I know now, lol.

Get all the financial education you can. This will help you understand much faster. However, no theoretical approach can replace thousands of hours of screen time. Learn about everything... but also be able to unlearn and keep an open mind: the markets are always changing, and at the same time, always the same. Listen to your own advice by seeing things for yourself, not through the eyes of anyone else.

I wish you the best on any path you choose.
  • #3
  • Mar 9, 2009 7:14pm Mar 9, 2009 7:14pm
Doblece thank you very much for your reply, very appreciated!

I was wondering what exactly is it that you mean by:
Quote
Reconciliating the analyst and the trader (operator) in me
I know i always have second thoughts, but i assumed it was because i can never be 100% certain a trade will go profitable, can I ?

Thank you for replying so straightforward btw
  • #4
  • Mar 9, 2009 7:25pm Mar 9, 2009 7:25pm
The "analyst" is that part of me who employs all available knowledge at the moment to watch the charts and decide on a course of action (long and short term), according to the strategy and plan. That part also has a good amount of "gut feeling" which is usually much accurate if I don't have to place a trade (at least in the past, all that year I was placing mental trades - not even on demo) and most of them were good.

The "operator trader" is that part of me who clicks on buy or sell... or clicks later on close...and starts wondering (or better, wandering) off the rules, contradicting the analysis, exiting and entering too early, or in the opposite direction of clear signals. In earlier years, almost all because of fear (and goose bumps and pounding heart - now that's controlled - or I'd be under ground by now, lol...)

Of course it didn't happen all the time (before the crash I had a good percentage and success rate) but it did happen in crucial moments.

So to "reconciliate" them, I just don't allow the "operator" to think. The analyst does the thinking, the trader just obeys the rules
  • #5
  • Mar 9, 2009 8:06pm Mar 9, 2009 8:06pm
Work on getting your Series 3 completed. The exam isn't that tough.
  • #6
  • Edited 10:05pm Mar 9, 2009 8:11pm | Edited 10:05pm
Quoting GreedyPIPs
I know i always have second thoughts, but i assumed it was because i can never be 100% certain a trade will go profitable, can I ?
Sorry I didn't read the second part of the sentence...

No, you cannot be 100% certain though you can have a good set of probabilities... Odds are always 50/50

However, if your plan has definite rules for entries, exits, stops, MM, R/R ratio, etc...., and after testing it on demo for a while it has given good probabilities of success, you must follow it to the letter even if taking a signal means to be wrong and a loss. Because losses are part of the system.

If you second guess your own plan at the moment the setup is ready, you are failing on discipline. It would be self-sabotage most of the time (sometimes it can also be a gut feeling but at the beginning it is very hard to differentiate the stubborn ego from true intuition...)

Here's a good link:
http://www.forexfactory.com/showthread.php?t=1
  • #7
  • Mar 10, 2009 12:59am Mar 10, 2009 12:59am
Quoting doblece
Sorry I didn't read the second part of the sentence...

No, you cannot be 100% certain though you can have a good set of probabilities... Odds are always 50/50

However, if your plan has definite rules for entries, exits, stops, MM, R/R ratio, etc...., and after testing it on demo for a while it has given good probabilities of success, you must follow it to the letter even if taking a signal means to be wrong and a loss. Because losses are part of the system.

If you second guess your own plan at the moment the setup is ready, you are failing on...
doblece,
Great posts!!!
one of the best answers to a noob I have read in a long time.
I especially like "reconciling the Analyst and the Trader".
Right off the top of my head I can think of several people who are great analysts, but terrible traders, and visa versa.
I too wish I had discovered currency trading 20+ years ago.

Greedypips! you have gotten some great advise. Welcome to FF, and best of luck to you.

PS doblece, Easy come easy go. (Bohemian Rhapsody) couldn't resist
  • #8
  • Mar 10, 2009 1:06am Mar 10, 2009 1:06am
Um - how about losing other people's money....

Can you do that with no concious?

Seriously - nobody has a crystal ball.... What happens if a client gives you 100K, and you lose the first 15 trades in a row, and they call you.

"How's it going?"

"I lost the first 15 trades in a row. The account is down 12 percent."

Now you are realizing that people's hard earned money is in your hands, and you are pissing it away, all because of bad luck.

Can you accept that everyone has bad losing streaks? Can you accept that you will have to overcome losing streaks (VERY hard for some) and it is not all champagne celebrations and sports cars.
  • #9
  • Edited 4:08am Mar 10, 2009 1:47am | Edited 4:08am
Quoting Mysticdiver
PS doblece, Easy come easy go. (Bohemian Rhapsody) couldn't resist
You got it. Thats' the precise meaning of that sig


Quoting tdion
Um - how about losing other people's money....

Can you do that with no concious?

Seriously - nobody has a crystal ball.... What happens if a client gives you 100K, and you lose the first 15 trades in a row, and they call you.

"How's it going?"

"I lost the first 15 trades in a row. The account is down 12 percent."

Now you are realizing that people's hard earned money is in your hands, and you are pissing it away, all because of bad luck.
I can tell you that is is indeed devastating, for everyone involved.
Especially after tripling an account in three months... and precisely because one is not willing to lose other's people money, you end up losing everything, clinging to a loss... watching for 6+ months how a hedge goes on stretching wider and wider... and indeed, because of initially unpredictable external situations and too tight a plan (precise mental stops at 100 pips distance... waiting for London open to close or hold, grabbing a cup of coffee at 4am, sitting and deciding to close the losing positions and poof! 100 pips doubled against me after a 12 hours power outage and was so shocked I was unable to close. Losing 15% is not the same as losing 30% of the account... especially if most of the money is not yours.) And the market went on and on... (april 17, 2006, just for the records... euro and pound).

I wrote all this because I forgot to mention that overconfidence (and "good luck") is maybe 100 times worse than a losing streak. Making between 70 and 120% a month steadily during almost a whole year is the worst thing that can happen to you. Because you really believe it is easy, you think you've got everything figured out, you even have a decent ratio, never more than 15% of the account in total open positions, etc.. etc..

My first trade with real money was a 60% loss of the account (it was small but anyway). The trade lasted open for two weeks and didn't recover. Then I made back 130% of the initial amount in the following two weeks...
This was the worst thing that could have happened, at that time.
I felt invincible and I "knew it all". I remember an experienced trader friend of mine telling me "you'll see later on, things aren't so easy in Forex".
Now I know. He was right. I was wrong.

Expect the unexpected. It will come to you precisely when you expect it the least and everything is running smoothly and you have "that" feeling of invincibility. Learn to recognize the feeling. It usually comes just before a losing streak (exactly like when a currency pair makes an awesome spike up... it goes down even faster than it rose).

Be humble from the start, lest the market comes and gets you down on your knees.
  • #10
  • Mar 10, 2009 3:21am Mar 10, 2009 3:21am
Quoting doblece
You got it. Thats' the precise meaning of that sig




I can tell you that is is indeed devastating, for everyone involved.
Especially after tripling an account in three months... and precisely because one is not willing to lose other's people money, you end up losing everything, clinging to a loss... watching for 6+ months how a hedge goes on stretching wider and wider... and indeed, because of initially unpredictable external situations and too tight a plan (precise mental stops at 100 pips distance... waiting for London open to close or hold,...
Now you are bringing back memories....
The second acct I blew, I was in a losing position (bigtime), and hemmoraging cash. I tried to stop the bleeding by locking it in a hedge. I was too paralyzed to do anything. When I thought I knew what to do, I blew the acct.
  • #11
  • Mar 10, 2009 6:41am Mar 10, 2009 6:41am
Goodmorning!
Thank you for your replies, didnt have time to read them all, im getting ready to go to work. Will post back later on today!
I was curious though, whats a series 3 exam?
Cheers!
  • #12
  • Mar 10, 2009 6:56am Mar 10, 2009 6:56am
Quoting GreedyPIPs
Goodmorning!
Thank you for your replies, didnt have time to read them all, im getting ready to go to work. Will post back later on today!
I was curious though, whats a series 3 exam?
Cheers!
Here are some details regarding the series 3 and other testing requirements.
http://www.nfa.futures.org/registration/proficiency.asp
  • #13
  • Mar 10, 2009 11:32am Mar 10, 2009 11:32am
Doblece again thank you very much for your input.
It seems much clearer to me now that the biggest problem i will encounter will be my own psychology.

tdion, thanx for being frank! I do not have illusions that its all peachy, on the opposite, im realizing that you need nerves of steel in this line of work.
However im not sure i can answer your question, on how i would respond to a client that i lost his/her money. I guess this is where people skills become nessesairy!

magnumfreak thanx for the info. I realize this is nesessairy in the states, but im not in the states. Nevertheless if i ever visit US, ill see if i can acquire a series 3 membership.

Guys thank you for your input
  • #14
  • Mar 10, 2009 11:48am Mar 10, 2009 11:48am
Quoting GreedyPIPs
magnumfreak thanx for the info. I realize this is nesessairy in the states, but im not in the states. Nevertheless if i ever visit US, ill see if i can acquire a series 3 membership.

Guys thank you for your input
Here's an equivalent that applies in Europe (FSA Certificate) and is more properly located in your country.

http://www.iraj.gr/IRAJ/CertIM_Spring_2006_Brochure.pdf
  • #15
  • Mar 10, 2009 11:59am Mar 10, 2009 11:59am
If you could turn back the time 20-30 years most FF members would cease to exist.
  • #16
  • Mar 10, 2009 2:56pm Mar 10, 2009 2:56pm
Quoting doblece
Is this a profession worth looking into?
In my opinion, yes.

What problems did you encounter?
Basically, undercapitalization. Later on, overcapitalization, which led to a catastrophic 98% loss which took me one whole year to assume psychologically... and will hopefully take me about a dozen years to recover...
Now, it's again undercapitalization, as my actual strategy is much tighter on MM.

Hello, are you saying that you lost, for example, 98% of a 100k account? thats like 98,000 dollars...

Now, if an experienced trader like you, lost so much money, what is left to us, newbies?????

Honestly, is it possible to make a living in Forex???

I have never ever known someone who makes money in forex.. and a decent living... im not talking about 3k per month, any guy can do by working in mcdonalds for example...

the forex guys I thought were PROs in all these forums, finished always banned, for creating fake threads, with fake profits, fake results using fake systems, after years of following them...

SO, Who here makes a living off forex?? Just wondering...

Or is it that the PROs, stay away from forums? Just wondering...
Why do we fall? "So we can learn to pick ourselves up."
  • #17
  • Mar 10, 2009 4:05pm Mar 10, 2009 4:05pm
ForexDude, i would imagine that a Pro would not share his or her experiences and strategies easily... Let alone share them on the net.
But then again, i might be wrong.
I realize that Forex by itself might not be the best option for a career, that is why my title says "a career in trading" and not in "forex", hehehe...
I would also like to think, that once a person has acquired enough experience trading in Forex, he or she could make a monthly profit. Is it really so hard, or do the profitable traders don't bother posting in the forums...

You 've raised some interesting points, and not that i want to discredit the validity of any member's opinions, claims or strategies, but i think that every bit of information you read, be it on the net, books, or university, you should filter it, analyze it and process it.
No holy grails, unmistakable strategies and internet claims are going to convince me to change the way i think, analyze and trade, nothing but experiences, good and bad.
What i do want though, is the opinion of older professionals, who have done this for a living (and not as a side - job, second job, or a hobby).
So, besides doblece (again, thank you for the link, i cannot believe i had not seen this before!) anyone else?
  • #18
  • Mar 10, 2009 5:29pm Mar 10, 2009 5:29pm
Quoting ForexDude
Now, if an experienced trader like you, lost so much money, what is left to us, newbies?????
One year of "experience" seeing only one side of the picture is not "being an experienced trader". Even after almost 10000 hours of screen time and about the same amount of trades, I wouldn't dare to say I am. The only difference is that at least now I know I am not

As long as you are human, you'll make mistakes.
  • #19
  • Mar 10, 2009 11:12pm Mar 10, 2009 11:12pm
Forex is EXTREMELY RISKY..so many people lose their funds..it's advisable to trade in your free time...never quit your career for trading forex..
  • #20
  • Mar 11, 2009 10:51am Mar 11, 2009 10:51am
My experience is similar to Doblece's (post #18). Don't know if I've racked up 10,000 hours of screen time, but after 3 years R&D (test driving 50+ systems, making hundreds of demo trades, and spending 5 digits on worthless EAs and education), I still haven't reached the point where I feel that I've attained "conscious competence".

I've achieved everything I want to career-wise, except master forex.

I know that consistent profit is attainable, though. I know a technical trader who makes 5%-10% return every month, and whose account hasn't experienced more than 10% drawdown, nor a losing month, across a period of several years (and thousands of trades). [Note to everybody: He wants to remain anonymous, so please don't PM me.]
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