do you think trading is really that hard?

Coming up with a profitable trading method is the easiest part of trading. Unfortunately this is where people spend most of their focus, yet are unable to become consistently profitable.

Once they realize that trading is 100% psychology, and not about studying the market, only then they can progress.

This shift in thinking is what is required in order to be consistently successful, however people don’t want to hear this. All they want to know is where they can learn about the “holy grail system” that “makes” the most money. They continue on developing their systems and donating money to the market, failing to grasp that it is the trader who makes the money and not the system!

They continue repeating the same emotional mistakes over and over because people’s mindsets are wired to associate pain with losing, and with the need of being right. Unfortunately these characteristics make it so difficult to trade successfully. Until people change their thinking patterns and their beliefs about what actually constitutes successful trading, they don’t stand a chance of becoming consistently profitable traders.

There is no need for luck in trading at all, all that is needed is understanding the dynamics of successful trading, and then working on the different psychological aspects of trading, which encompasses risk and money management, self analysis, internal control, and being able to interact with the market from totally different perspective than the rest of the people. The so called perceived “randomness” and “unpredictability” of the markets that screws the psyches of most people is actually professional trader's the best friend.

If markets would behave in a very predictable smooth manner, then every Tom, Dick and Harry would be able to make money and the movement, volatility, and chart patterns would probably disappear and the markets could potentially become smooth transactions and our edges would be gone (at least on shorter timeframes, and we would have to become investors).

I believe that we should be very grateful for the fact that becoming consistently profitable is difficult for most people because they contribute to the pot and their trading emotions can be seen in chart patterns.

I disagree. The main difference is that lawyers, doctors, and other professions all have established methods of learning and practices. These people enter universities which train them to become professionals.

Traders on the other hand, only have themselves to rely on. They can't ask classmates for help, or visit their professors at lunchtime. They don't have textbooks. All they have are websites and books written by other traders.

I couldn't agree more with the above. You don't qualify as a doctor overnight and it takes a few more years of professional practice to become a GOOD doctor.
Trading forex (or commodities or shares) is like playing the drums. It looks cool, it looks fun and you can get training, lessons, read books and watch dvds, but you must have some sort of music ability or natural rhythm. The same way a doctor must be naturally caring and not squeamish. If you have the natural ability + training + practice, then you might have a chance.
Perhaps the difference between the above professions and trading is that you can still making a living out of being a useless lawyer or a lousy engineer, but you'll go broke being a unskilled trader.
I took an online course + live room for almost a year. In this time i saw people who would learn the strategy, learn to read the market and start making money in a couple of weeks. Others would struggle for months.
Natural ability + training + practice = a good professional

Trading is only hard pyschologically. Technically speaking, i find it not that difficult. However, you must have the right attitude to do well in trading even if you are a technical superstar. When it comes to controlling an amount of money which you can't emtionally afford to win/lose, you'll start second-guessing your analysis and do a lot of extra stuff to make yourself lose.

For example, a person trading a $1000 account can easily make a bet on a mini-lot and not worry about losing $100 on a single trade because $100 is a relatively small amount when it comes to trading (or you shouldnt be trading if you worry about losing $100). And you can easily make $100 or more on a $1000 account when trading mini-lots due to the very same reason. On the other hand, if i give you $10M to trade, i doubt you would have the guts to trade 10,000 mini-lots because losing $1M on a $10M account is totally different than losing $100 on a $1000 account even though they represent the same percentage. And that's how people start to lose it when their capital grows and they can't maintain the same menaltility and strategy. So to master trading, one must first master their emotion. Technical skills are necessary, but secondary as long as you have some good fudamentals.

One of the best post I had seen for the last 2 years........One good way to overcome this is to compound at a rate that we are comfortable at........after we handled "big" trades a few times, it becomes the norm =)

Anyways, I disagree that it takes 5-10yrs.......though i read that one guy used 7yrs and not make it........I took slightly less than 2yrs, same with the rest =)

I totally concur. I total am a big failure in emtional management so i had to overcome this by setting a fix (relative, 3-5% monthly) compound rate at which i am comfortable with and now have no problem even controlling "huge" trades since i make it systematic regardless of capital size....been working out pretty well for the last 2 years. Also took me about 2 years to master this pyschologically.

Yea, very true.

I think the most difficult part is finding and acquiring the knowledge necessary to trade profitably. Books, forums, etc. are nice, but there's so much downright bad information out there, not to mention stuff that may not be 'wrong' but is certainly not that helpful, and it's not like you can just go into any prop trading shop and sit behind a head trader to watch how they do.

Chances are most of us will (or already have) go through many different systems until they find (or create) something that fits them and works. Maybe for some their competitiveness and quick thinking fits well with scalping but not long term analysis and trading dailies. Maybe for others the opposite is true and anything shorter than a daily chart is just noise.

But imagine you were able to start in your natural environment and develop from there? Imagine you had a mentor who traded in a similar style to you and you were able to learn from them? Would trading be that difficult? You'd be able to cut down the learning curve dramatically.

As far as psychology goes, of course it's important, but even with the mindset of Buddha one can not turn an unprofitable system into money. If you have a profitable system that fits you, and good money management, the right mindset will come with time. Good money management is easy enough... that leaves finding a profitable system that works for you. Good luck.

The common statistic out there is that anywhere from 80% to 95% of forex traders lose money. That stat by itself suggests that trading IS hard for many traders.

The next question, then, to ask is, "Why is trading hard?"

In my opinion, most traders find themselves losing money because they under-prioritize money management principles. They risk too much trading capital, enticed by potential large rewards for doing so. Unfortunately, they forget the age-old investing adage, "High Rewards = High Risk".

This investing principle has applied in the stock market, and it certainly applies in forex trading.

For most traders, they are too narrowly focused on making money. That's right, I said it...it's a mistake to think that making money is your #1 priority when trading.

Your #1 priority when forex trading is to Protect Your Capital! Making money comes a close second.

If more traders rearrange their priorities and employ better money management (i.e., not risking too much), I think there would be a lower % of traders failing in the forex markets.

I think that having a mentor might shorten the learning curve............However, I also feel that this "protege" will be missing out on a lot of experiences......

The mother of success is failure.......

nice posts guys some good info here keep it coming i dont have nothing to say atm because anything i would say has already been said

and i agree the hardest part to trading to master is the psychological side of things

demos to me are a waste of time you never get a real sense of trading start with a micro account for practice it will give you more of a real feel of how it will be

regards damien

I couldn't agree more, Damien. You don't need to be in the market all the time and you don't have to enter a trade every day to be successful. I have myself personally arrived at this very solution and it turned me from being a struggling trader to a relaxed successful one.

It seems simple, but the simplest solutions are usually the product of a huge amount of work, thought and experience. To get something that neatly addresses a whole host of things - psychological issues, entry and exit issues, money management issues, etc etc - means you have to have an in depth personal understanding of all those issues first - and it seems the only way to get an understanding of them is to go through a few years of struggle.

The whole arena of forex trading is a minefield of people selling systems or other products to make quick money from a learning trader, some of them earnestly believe in what they are selling even when it is misleading, inadequate or simply just crap. A newbie has no idea where to start, who to trust and what essential steps to take for his own learning curve. Instead he gets jostled around by all of these salespeople losing his capital on the way, either through the cost of these courses and products or because he traded live trusting they would work.

Even people who browbeat the newbie for being lazy or not doing the work, or wanting to get rich quick, or 'searching for the holy grail', what these critics don't appreciate is that it's very hard to know from a beginning of ignorance what work needs to be done. How do you design your own training if you don't know yet what makes up a successful trader? It is totally unlike going to college and learning a profession where the teachers have designed a step by step method for students and keep refining it as they understand more about the learning process and even more about the profession and subject they are teaching.

After a year trading and learning on my own, I joined an expensive year long course which promised to give us the entire process to becoming a successful trader on the recommendation of another student who had bought into the hype - when everyone on the course graduated and continuing struggling on for more than a year later, we found we were just getting more and more frustrated with the incompleteness of what we had been taught - we didn't even graduate with any kind of system after a year's work, just with a few disjointed ideas and no idea how to make them into a system. The teacher, who was a master at psychological manipulation, withholding information and not answering questions throughout the year, just blamed the students. We didn't know what it was we needed and were lead down the garden path, wasting time, energy and money on empty promises.

Another course which promised us a great system which was really hyped by those newly graduating, dazzled by the pips their tutor claimed to have made, also turned out to be another frustrating year for everyone on the course and even more money down the drain.

There was no way I or my fellow student traders could have known in advance that there were so many missing ingredients in both of these courses, because we still didn't know what becoming a successful trader was made of.

Finally I found an intelligent trading coach who was far cheaper than either of those other courses, he had a good system and he taught it step by step, designing it and his approach for all the problems he saw new traders had. The very best thing I learned was where my own personality made trading hard. Everyone in that trading room had different personalities, so each person identified and worked out their own particular stumbling blocks in an environment where the step by step process of becoming a good trader was made open and apparent.

What was my own great discovery from that coaching? It was that once I focussed on making myself methodical I could do anything - trading methodically was broken down into getting up the same time every morning, doing my analysis of yesterday's trades every morning, doing a long term analysis straight after that, looking at my charts for the same things in the same order, entering and exiting repeatedly on the same signal in trading simulation, taking a screenshot at the moment I entered a trade and another at the moment I exited so I had an excellent visual trading journal. I began incorporating each of these things one by one and many more afterwards into my trading practice. I took them one at a time, as each one stuck it was like brushing my teeth in the morning I didn't need to think about it any more, and my mind was freed up to move onto incorporating the next thing.

Only after I got through all those things did I have in myself a well oiled trading machine that could now come to the conclusion Damien came to:

You don't need to be in the market all the time and you don't have to enter a trade every day to be successful.

So it did take me all those years of struggle to learn this simple truth, and maybe I wouldn't have gotten to that truth without those years...

So the answer is yes, trading is hard. It doesn't have to be if you luck out and find the right coach, or if somehow your personality weaknesses don't make you vulnerable in this arena. But for 99.99% of people I would say it's hard to design your own learning curve when you don't know what you need to learn.

excellent post. in the end all you need (well exactly not all you need) was a sound trading plan to fit your personality which is what all traders need. not a system of x and y cross here do this but a full plan from what you research to what you do if all goes bad.

and thats why other peoples strategies will not work for me or you because all your getting is the basic layout, you dont get what there mentality is entering a trade etc etc etc

regards damien

Really good post and a great thread too. Thanks.

I agree 100 % with regards the attitude and approach to trade forex....

Ive been struggeling for some time to find out how I´m reacting and behave over different marketcycles....I have come to the conclusion that I have to work with myself regarding disciplin and structure to be long term succesful..

It´s easy to make a couple of emotional trades and earn good money..but it´s always ending up with no money on the account after a couple of months.

So for now...Relax...Start up with a 100 bucks (FXCM is perfect)...I dont allow yourself to risk more than 1 buck (1000) per trade.... Analyse the market put up the direction/strategy with stops/trailing stops and stick to it....

And all of a sudden I have a 30 % increase of my account capital for the last quarter.....

This is fun....and hopefully I can stick to my goal of approx. 10%/month of increased capital...


Best regards

RT

nice going there keep it up RT

regards damien

I'm sorry but im a bit confused... I'm guessing forex is extremly hard since most people seem to be losing their money.

Makes me think why people are actually doing forex?

The higher the hill the better the view

Yea trading is definitely hard, you really have to be in tune with the market. Me personally if I take a few weeks off, I'm out of sync.

I guess its like a dance, if you haven't been in dance off for awhile. Do you expect to win ? lol.. just my 2cents

im the complete opposite if i take time off it clears my head and i come back better than ever thats with everything in my life ive noticed

regards damien