Starting out

Hello everyone,

Forgive me for this long post and thread. I hope you take the time to read this, think about it .. and hopefully, gain some knowledge from what i have written.. if you agree, please feel free to share your views.. if you disagree, that's fine.. but also feel free to comment...

What you should not do is to accept what i say blindly, refusing to work that most beautiful muscle of all, your brain.

As you can tell, i just registered on this forum but i am not new to forexfactory, forex and trading in general. I have been reading this forum since 2010 - 2011, following individuals quietly and reading their posts.

Ah... you must be asking... who am i and how long have i traded for? A little about myself i suppose.. an understanding of the person behind this nickname.... I started trading since i was 17 and that was about 6 years ago... I started out trading equities, introduced by my father who was a retail investor...

I started off well.. and strong.. a curse in disguise.. i gambled my $2000 into $5000 in penny stocks during the boom of 2006-2007 got out in 2008 (by pure luck) and took my $5000 and rebought penny stocks from the recovery post 2008 till 2010 further increasing my wealth to $10000... at the age of 20, i had $10000 free money, thinking that i was going to be a demi-god.. the next trader that you watch rising like a shooting star... how hard was it i fathomed.. to buy low and sell high ...


I was also an avid poker and blackjack player, going to rake house games, playing on pokerstars, full tilt and the casinos at 18 years old and losing money of course... but little did i know that learning poker and blackjack had a huge part to play in my later years of trading ..


I gambled in forex .. hearing about this beautiful volatile market, eager for more money ... my thinking was... if every 4 years came an economic cycle in the equities market.. i would only see 15 more boom and bust cycle.. how was i to make my money? it would take forever..... (i didn't know about leverage than.. 1:1 ratio)

So i started my venture into forex.. and yes, intially i got my capital up to $12000 in 2 months.. wow.. $2000 in 2 months... (i was stupidly using standard not knowing about minis)... I started getting cocky.. leveraging even further (yes i went up to 7 standards) ... Within 6 months, my account got wiped out.. and my dad had to bail me out with an additonal $3000... I felt like a total loser.. like a scumbag.... the world was crashing down on me... i had dreams of buying a house... getting that flashy car... letting my parents retire.. never having to work etc...


During the 6 months that my capital got wiped out.. i had stretches of staying awake for 48 hours praying that markets would reverse, shouting a little more.. come on.. just as a poker player praying for a river backdoor straights when he is all in.... having emotional rollercoasters .. the works.. (anyone who had their account busted would know)... but it didnt work.. i got busted still ... The market screwed me.. it must be a conspiracy... it has to be... my brokers wanted my money.. i was right.. the market was wrong....


I hope to share with you my personal story of how i manage to overcome seemingly unsurmontable difficulties in trading and explain as best i can the stages in trading and to work with me towards becoming a better trader. And hopefully along the way, you will be able to pick up glimpse and bits of knowledge from me as i had from various teachers, posters, and books...

It will be a long story.. but if my writing helps even only one young trader who stays awake all night.. sad.. depressed, without comfort and about to give up but reads this post while he/she is about to give up .. presses on, finding hope and strength in this thread.. then my job is done...

So back to my story..

I lost all my money right ... how would i ever trade again?

Dear young trader... one of the best thing that trading has ever done to me was to leave me without money... As a young trader, you have a roof over your head with your parents.. meals to eat .. loads of energy and time... you wouldn't starve.. you wouldn't be on the streets and you wouldn't die... that should be enough..

Not having money was perhaps the best thing that happened to me... i started to think of ways to save money, to earn money and most importantly of all, to protect my money....

Let me explain this 3 points.

1). Save money (what can i cut back to save more)
2). How can i earn money to fund my account?
3). How can i protect this money in the future..


No 1 teaches you simple life principles which is applicable to trading... to log down your spending like your trades.. review it at the end of each week and see where are the leaks and to plug it. Learn to keep a good well documented journal.. many atimes you will lapse from it.. you will stop writing and updating it.. and forget about it.. but you must not stop doing it... keep doing it.. pressing on .. and make it a habit.. Discipline in training..

No 2. Teach you to be creative.. to learn about life.. to find new jobs.. new skills and to be reliant... Learning to earn money.. and feeling the pain of earning it.. WILL help you in your trading.. you will take less risk with the hard-earned money though the drawdown is that you will feel sad when you lose money.. and joy when you lose money.. (which is bad in trading honestly.. but the benefits out weights the cost at this stage.. i will explain how to overcome this problem later on..)

No3. Protecting your money.. because you feel the pain of earning the money back through sweat.... you will be more careful with your trades in the future.. and to take less risk .. (not sure if everyone agrees with me on this .. that less risk is good.. as well as becoming too cautious to trade i.e waiting for perfect signals etc). But from my perspective, if you stay long enough in this game.. you will learn..



So about my experience with the 3 above points

No 1). I used my iphone notepad as a log for my money spending habits.. and before long, i was using simple excel formulas to keep track of my spending. This helped alot when i started keeping a log of my trading and actually forced me to read up more on different formulas and VBA during this period.

Lesson 1: Learn to keep good records and start small with your discipline

No 2). I started many side businesses.. back in 2009 i had zero knowledge of progamming.. i forced myself to learn php and mysql together with java and html.... and i am running a web designing and programming company now that earns me enough to fund my comeback. I also actually had to learn to be more discipline by keeping record of my registered company to file taxes which helps alot with my trading journal.

Lesson 2: If you want it bad enough .. and spend the time to do it.. you can learn it fast.

No 3). I didn't wanna lose my money that i worked so hard .. in fact it was negative because i had the fear.... fear of giving it back to that wretched market.. and that fear was insane.. it almost stop me from trading again... but i loved it too much to stop ... this is where i will stop sharing for the day and let you think about this question..

Qns 1:

I once read a forum post back in 2009 that said this. "a doctor spents 5 years of his life studying and maybe another 10 working before an annual paycheck of 500k .. a lawyer spents 4 years in school.. 2 years as a pupil and 5-10 years before becoming a partner and earning 500k... what makes you think as a trader.. that simply staring at the screen for 2 months will make you richer than them... you have to be prepared for the hard work.. the memory work.. the calculations.. the understanding.. the readings.. and if you are not.. then you might as well get out now and find something else to do..."

Are you prepared and how bad do you want it? ... until you answer these questions.. you cannot move forward...

Hmm... quite interesting I gotta say. You can lose with style. That's cool. We all start losing sooner or later. Money, people or your teeth, sooner or later you'll lose some. Keep sharing your experiences.

I know these seems a weird question ask .. but how many of you play sports? and i mean seriously... competitivly and loving? What has this got to do with trading you ask? Everything...

Trading is not just trading.. it's a lifestyle.. a way to become a better person.. to mould your character and to have mind over matter... to encompass your life.. thinking and most importantly of all, to consume you so that you live and breathe it.... and if you ask me... there are 2 things in the world that changed me...

1). Rugby ....
2). Trading...

Rugby
Let me explain ... I was never good with rugby ... i had a fear of getting injured ever since i broke my ribs during a match... and i always wondered if my neck would snap next in a match.. but i loved it too much to quit.... i started reading up more on protecting myself... getting ready and prepared for the match .. that means i had to live right.. eat right.. workout right.. sleep right etc... doing all these little things to make myself a better player... there were stretches that i stopped playing (i started from 12 years old so you can imagine)... there were stretches i trained 7 times a week .. day in and day out ... there were stretches i gave up... but i never stopped loving it... i perservered...

despite all the bruises and knocks and further injuries... after 6 years into the game.. i knew the rules like the back of my hand ... i knew what i had to do on the field.. it became second nature.. i made it to a bigger stage... i became mechanical... i had no fear.. just instant reaction after watching hundreds of games and playing just as many... that is what trading should be like..

There are three key lessons here that i feel will be useful for traders.

1). mechanical methods and probability
To understand that everything in life takes practice.. and you have to do it IN and out ... everyday.. to become as mechanical as possible.. to react when the situation arises with the best possible knowledge / tools ..

never predict.. you can't predict where your opponent is going to kick ... you can't predict where he runs.. but you have a gut feeling and probablity to back you up.. because if he's in his 22 .. it's safety first .. and the probability of him kicking is 70%... so you position yourself well to receive his kick .. like trading, you can't tell if the feds are raising interest rates.. or if euro is going to do another LTRO.. but if you know your economic conditions well enough .. and feel that there's a 70% chance of no QE3 and chance of LTRo.. you wouldn't long the Euro wouldn't you? (eur/usd) the charts back you up just like how your tactical team sheet does.

2). Passion..

Remember something that you love so much that you would encompass it daily in your life.. and ask yourself if trading means as much as that does to you.. if you can look yourself in the mirror and truthfully say yes, you are on your way to becoming a better trader.

The best phrase in this scenario i can share to you is this.. how bad do you want it... until it encompasses your life and you feel that this IS your life.. you are never going to make it.

3). Deliberate practice

There is 1 book that is not trading related but i feel all starting out traders have to read... it's by Geoff Colvin called talent is overrated. He explains to you what makes a great, a great.. and why practice is so important... not just rubbish practice.. but Deliberate practice... What's the point of passing a 100 times or kicking a 100 times if you have no goal.. it's mundane you have to say i am going to kick 100 times to that corner to practice my control of kicking.....

whenever you trade.. it's not how many trades or how many hours of screen time you have, but how deliberate your trades are .. and how you see your trades... if you are looking at your trades to merely pray it go up tick by tick... then it's pointless.. but if you spend 2 hours looking back 10 year historical data and understanding demand / supply.. than it's called deliberate practice..


Read the book talent is overrated first.. and understand what it means and takes to get to the top before you continue.

How did you lose that $12k? Were you not using stop-loss orders or something? You should never find yourself 'praying' for the market to go up or down...it is such a stupid situation to get yourself into. To me it sounds like you didn't really know what you were doing, because you wouldn't just blow the $12k so quickly if you were trading properly

I was heavily into options .. played the strike outs.. didn't get hit.. no hedge.. lol ... *shrugs.

Great to read your story, but by the time people such yourself or myself, will read such posts, it will have been too late.
I've just given up investing until I recoup up some money, reassess and rebalance my mind.
I've lost £8k over the course of two months and it feels awful having started from £2k. The losses started when the market lost patience in a gold mine I had invested with a 6month period in mind. Realising I would sitting for another two years whilst the market moves around me I sold for a -30%.
From there it spiralled when I should have stopped and rationed.
I realised a gap in my platform where I could use an additional £5K+ before settlement which acted like leverage. It was irrational in hindsight to start using more money than I had in capital to back. When stocks dropped in the three days and I had to sell to cover the loss it was taking bigger bites out of my reserves.
I went for riskier trades to gain my losses back quicker.
Fortunately I stopped before I went into debt. Felt ashamed and took me a week to tell my parents. I'm just about to start university, and like you had grand ambitions for the money. My target of 20k for in two years is a dream now.
I've set out some very strict parameters for when I do set out again. And I will only ever delve into 3 month+, fundamental-driven conditions only.
I can't help but think that the two medium-term stocks I had in mind to invest at £8k instead of the gold mine have gone up 20% in the time period I've lost the entire portfolio. I had a good eye looking at my investing history. But why oh why I started day trading I cannot explain. It's gone by so quickly as well. I need to be more humble as a human being and It'll take a long time to regain this money.

What I'll miss most of all is the joy of investing. I have learnt some invaluable lessons but my god do I wish they didn't have to be so expensive.