My Story...need a bit of guidence

Before July 8th 2009, I didn't know what fx was.

I opened two accounts (me and wife) for the bonus money offer from zecco-forex. Which gave me $200 per account to work with. I had to open the account with some $ and did so with 20K each, not knowing what I was doing.

I tried a demo for about 5 minutes, pushing the buttons back and forth to get the idea of what fx was about.

Then I began to live trade. My goal was to make the requirement to get the bonus, which was simply to make a trade, but I didn't want to lose $5 or so on the spread quickly buying then selling, so I tried to make a buck instead of quickly lose one (or 5 in this case).

The first trade won about 6 bucks, then the other account won about 11 bucks, and so on untill both accounts profit were 34K in about 3 weeks. All the while, I never drewdown the account beyond the profit that had accumulated thus far for both account's profits total.

Then I lossed about 15K (leaving 19K profit) because I never used stop losses...I thought I would just ride out the loss until the price rebounded then get a profit. The loss wasn't very emotional for me, as I kind of knew this money could be taken away at any moment.

I paused before resuming and after seeking advice from family members (Dad, Wife, and my Kids), I was advised to withdraw about 16K (leaving 3K for both accounts...1.5K per account)), and trade with the 3K left still not using stop losses and not knowing any system or method or what the heck I was doing.

The 3K ran up to 4.3K after a week, then I had another big loss down to 1K for both accounts combined. Now I'm down to 1K (not including the 16K profit I pulled out already...that is no longer available in my book to trade).

So I pulled the 1K out, and am looking for a different broker other than zecco-forex.

My goal now, is learn how to do this properly. So I'm reading the dailist beginner thread and James16 thread, saving the graphs, etc. and have decided to demo 1st using daily charts on an mt4 app downloaded from metaquotes per dialist's suggestion. Trying different brokers (on demo) like IBfx and Oanda in the meantime.

Leverage, I plan to use 1% leverage to start so I can get ready for a live account. I'm planning on using nano lots like what is described in the newbie introduction threads.

Stop Loss: of course I'm going to use it now...probably set to 50-60 pips...but again, I'm clueless here.

Trend: Trade with the trend, not against it.

Try to categorize my trades into A, B, C, etc. and don't trade unless I go with only A trades.

Loss: don't be afraid to lose, it is part of the business.

Business: treat this as a business, and take the time to learn and practice.

Demo: until I have 3 consecutive months profit...but I could make one very small trade and have a profit for the month...how do I know how much to trade...say I have 6 lots to use...do I use all 6 on one trade, or 2, then 2 more if the price goes against me...or the second 2 if the price goes in my favor, until all 6 are used?

System/Method: I have no idea what this is...as I'm reading the many threads here, I have no idea on how to develop this...I feel like I have no starting point. This is where I am lost and could use any kind of direction to get me started. I feel like I am all readyto start demoing, but since (via advice on the forums) I don't have a plan or system to try out, cuz I don't know what they are, I can't start. So I'm chomping at the bit, ready to trade, but keeping myself from it until I have a place...but how to a make a plan. I won't alllow myself to start doing random trading. I want to have some plan/system/method and try to develop this, while I learn more systems.

I'm an indepentant computer animation contractor, so I have lots to time each day to watch whatever trading hours, etc. I can take time off to learn fx for a while before have to jump back on a project, but even then, can watch markets and make trades, etc., throughout the day. I don't want to spend all my time trading, just the amount I feel is good...like 7am PST to 2pm PST, and maybe an hour or so at night, or check the charts a few minutes at night. I work from home, so I can watch the fx all the time, except during sleeping hours, 9pm-4:30am roughly.

Can someone please help with a direction for a first plan/system? Even if it is your own, something will help me get started.

An example, is the pin bar method. I understand what they are, I'm not good at them and realize I don't know what do to, but at least I feel they are a starting point for me...I think....but how do I enter a trade with them, and how much position size, how much profit, how much stop loss...you see any kind of nudge in any direction will help me feel like I'm going in a direction. Right now I feel like I'm absorbing info but can't do anything with it. Thanks for all who respond, and have written the newbie help threads...I will be reading those.

Hello there! It is best that you do some reading and research and try to come up with your own system. If you want, you can base it on other systems, but some of the ideas have to be your own. This way, if market conditions change or anything of the like, you know what to modify in the system and how to modify it.
http://www.babypips.com has an excellent section called 'School of Pipsology' which covers forex basics in easy explained language. You should definitely check it out and go through it.
If you like, I have a system which I follow and keep track of on my blog at
http://gulzaarfx.blogspot.com

Good luck with your trading!

jfharper, you are a very wise man. Taking out the 16k when you guys realised that it's too risky to keep them on the account is the only sane choice.
Furthermore, I like how you also seem to realize pretty fast that you need an edge in this game in order to not get beat up. Again, very wise after this short period of time that you have been involved in trading.

Reading from the diallist and james16 is probably a good idea. However, there is a lot of stuff out there that gives you a good edge (= working system with definite rules), you just need to find it. Personally, I would refer you to Profitunity (Bill Williams) and read their book Trading Chaos 2nd edition. All you need is in there - methodology and psychology involved in trading, which I find very well done in this book. You will also find very easy to use advice on how to deal with risk and money management.

Just one hint: don't waste too much time demotrading. It should only be there for you to understand how the platform works. If you want to improve in your trading you need to trade real money, otherwise you won't learn anything psychologically. Imaginary money does not have an effect on your psychology. Therefore, you won't see how you behave when taking a loss or winning non stop .. greed/fear stuff you know..

(The more I read your post the more I want to give you certain advices ... i.e. you say you want to focus on the dailies. You also say that you have a lot of time each day to watch the market. Well, trading the daily and watching the market the entire day is totally senseless and makes you screw up. That's something you will learn if you have watched the market all day and screwed up Generelly, I really advice you to read Bill Williams' book. The guy is a genius and so is his trading system. Everything you need is in the book. (not trying to force you to do anything ... ))

For someone who has just joined you have certainly taken the highs and lows, more so the lows but then again we all do and have in the earliest parts.

Forex for beginners, that is those who have never traded/charted/analysed etc before, should pay a visit to Babypips. It is a great site that has the core basics set up from Kindergarten (basic) to diplomas (more advanced techniques).

From there decide how you want to trade, what suits you lifestyle, timezone and tolerance levels. So there are some options. You can scalp (try to take the small moves and profit on low timeframes 1M,5M etc), Daytrade (take technical signals at areas and trade them daily with longer term views) or you can just take the long approach and wait for daily and weekly areas to come into view with a mindset to trade Price action from these areas. These are a few ideas.

From there you will find a world of tried and tested ideas, or you can come up with your own. Demo trade a few that you think suit and iron out the creases. You will find that this may take alot of time but it is essential. Once you feel comfortable with something, write up a trading plan for yourself.

Include everything from the outlay of funds, the risk (managing losses) the setups and how you will manage future trades in the events of account growth/decline.

For example.

5K starting account- all trades are taken with 3 mini lots until a point when account reaches either 2.5K or 10K inwhich trade sizes will be re-evaluated. Maximum SL is 100 pips, trades are to be taken on 4 hourly signals and above and comprise of the following.

Hourly- IB setups taken in the direction of the london open candle (closed at 7am).
4 hourly and daily- Looking at the weekly open we are looking to take trades in relation to our position. Long if we are above the weekly open, short if we are below

Risk is set to a maximum of 100. All trades taken are 3 mini lots in size. Trades are managed on a trade by trade basis with no limits set.

Once the account reaches either a point of 10k or 2.5k we will re-evaluate lot sizes and make changes if neccesary.

That is a small plan that I have for myself, it is not exact and the one I have is a little more detailed but it a plan that I stick to for that part of my strategy.

Once you have a plan, you are comfortable with were you are at in terms of consistant trading and you have some success with your demo then move onto live trading on a micro level. Oanda offers a great way to get the pyschology of real money in play and it doesnt need to be anymore than you are comfortable with loosing. You can start with as little as a couple of dollars and trade single units (mini is 10000 units, standard is 100000 units so this gives you an idea of how small the amount is per pip when trading by single units). Once you have mastered the small change then you can add more as you go until you reach a point where you may be trading mini lots, at which point I would say find a new broker and platform. (Oanda is good for getting the basics but there charting and options are not the best).

From there it is pretty much up to you, not that it wasnt before hand. Continue to read and gain insight into the way things work. Read or watch videos based on or compiled by successful traders and you will pick up somethings along that way that will hopefully enhance you trading experience.

The last piece of advice would be to stick with it. You will find it hard at the start. Learning to wear some losses in the beginning is natural, but dont become discouraged if you get a few in a row. It isnt the end of the world. If you plan is sound, your method has been tested and has proved robust then in the long run it will hopefully work out. I say hopefully because at the end of the day 95% fail, but that doesnt mean they didnt enjoy some success along the way.

Best of luck to you. It is a tough nut to crack but there can be joy on the other end if you can stand within your grounds.

Razor

I totally agree with the highlighted section above. Most advice tells you to just trade a demo until you think your "system" is ready. When traders do this that have not traded with their emotions coursing through their bodies. One needs to/must trade live to understand the power of their emotions to affect their trades. Get that experience, then you'll be a better trader.

Here's a site where one could do some learning about the forex:

http://www.nfa.futures.org/NFA-inves...-programs.HTML

First, thank you to all who replied, for your kind words and encouragement. I just needed a bit of guidence in some sort of direction...and I feel you have delivered.

Second, I will check out those web sites...I have heard of babypips and will start there.

I also agree with the idea of not staying too long in demo mode, because one may take more liberties in demo than they would live, thus creating perhaps a bad habit, where I think live trading with emotions is closer to the mark.

Thanks for bearing with my story...I didn't want to come across as bragging...I just wanted to describe where I was so the replies would reflect this, and I feel they have.

BTW, I've received an email from an individual who read my post and kindly offered to mentor me. He would like to do this via messenger or skype and has said this is good to do in real time, which I'm assuming is when the markets are going and trades should/shouldn't be made. I understand where he is coming from, where decisions should be learned when things are going, and appreciate his offer. I'm a bit reluctant because I like the public forum, how advice can be scrutinzed or confirmed. The reluctancy comes from the fact that he would like to do this privately, this business deals with money so that can attact...well you know, not that this individual's intentions are bad.

So the question is, would you advise against a private mentor and learn the way everyone else has...through reading, trying, time, and the school of hard knocks? Or is this common and OK to enter into a mentoring opportunity. No cost has been discussed, and if he did charge, which I don't think he intents to, I wouldn't choose to spend money on a mentor at this time. Thanks again for your reading this post and replies.

Also, please do not take offense to this email, possible mentor, if you do read this...I like requesting advise from others, especially forums that hold wise individuals.

A mentor is the best thing you can have. Go for it. You will still have your hard knocks, except they will be reconciled much much faster with a live mentor rather than having to figure it out yourself. Consider yourself lucky.

I traded on real for a very long time, and until on demo, I never realized there was so much about trading I didn't know. While real lets you experience your emotions correctly, demo shows, in relief, those emotions and where they steer your trading the most and in what direction. Switching trading modes, from paper to simulator to demo to pennies to real, may give you a full perspective on how you trade.

It reads like you want to control your emotions during trading; you've already made headway, reducing your account's absolute risk. I have made some presumptions below that might help you sort through them and get on the path of most traders.


Earning money so fast can be done in seconds, demo or real, on $10 or $25,000. Losing it, as well. It's all in perception, what amount's important to you.

Emotions react to time very oddly: They'll help you adapt to a situation for a while, then seem to go against you dramatically. After a while in real, your body, called gut instinct or whatever, will let you know when you are about to lose or win, if it perceives a threat that will change this situation. You have an internal trading system, based on an exchange of your emotions and your fast, almost semi-conscious interpretation of the chart.

You also have an external trading system, based on what you can write down and show others for each trade.
Consciously, rationally learning about this situation may produce an effect: A person gravitates to trade only a certain chart area with its own direction and volatility or percent of the entire chart, which allows the person to exploit his/her own internal tolerances, how much allows self to earn, and the speed in getting/losing it.
Some call this matching one's personality to technicals; regardless, it limits and defines one's exposure to the chart's different situations. Thus, reason goes along with emotion and also one's fast interpretation / gut instinct.


These features of a trader in establishing each trade take a variable amount of time to set in for a regular profit. I've been on it longer than most, guess I'm slow or a perfectionist. You've already gotten far in a short time, and I wish your journey to getting them fast.

In either case just remember that while a mentor can show you the path your the one that needs to walk it. Absorb what you can and if you are comfortable with it then proceed. Be aware though, not all mentors and pupils share the same common comforts. If you look at the sporting world there are tons of examples of professionals making changes to there mentorships and this can be for varying reasons. What im trying to say there is that if you are not comfortable, and if you have giving it a really good try then be honest with the mentor and yourself.

I hope you find some success in your trading. Feel free to PM me anytime you have a question.

Take care

Razor

Again, thank you for your replies..I will definitely look into your suggestions and advice during the journey.

One more small question I had since I posted last: Since we are dealing with money, is it possible that a mentor could feel entitled to a percent of the winnings after they have spent an amount of time with their pupil who has had success? Does this make it difficult to leave the mentorship if this is the case?

You are on the right path! Price Action trading is the KEY to this business IMO, Follow ALL of the rules in post 1 in james thread and be patient and diciplined and you will be rewarded.

check out Strat's Long Term Stress Free Trading in the trading systems section also to see if his style would fit your personality.

I definitely suggest that you know and understand FX before you proceed any further. Believe me, you were extremely lucky to have initially made a profit. Extremely lucky. Trading as recklessly as you've done, could've very well ended a lot worse.

I suggest you check out babypips.com, and read all you can here: http://www.forexfactory.com/forum.php

Demo for no less than 3-6 months or take a $1000 (tuition money) and trade that to create a system that works for you. There's hundreds of systems on this forum, take bits and pieces from a few of them and create a system that you understand and works for you. Only once you've mastered your system go live with the amount of capital that won't affect your lifestyle. Make sure that you know and understand that whatever amount of capital you start with can and may be lost!

I don't care how emotionless you "think" you are, when you're dealing with real money....emotions can take over...yes even with the best traders in the world that may have $600 million dollars on the line!!!

Here's another piece of advice....learn to trade on your own (reading this forum, books etc) and never take trade calls blindly without first confirming the trade. There's a lot of great traders on this forum, but there's also a few slim balls lurking....waiting to sell you the next greatest EA, system, trade signals, etc...

Thank you very much...once again!