seeking advice for next steps... a bit lost

Hello, I am seeking advice from experienced traders. I'm currently 24 (almost) my "trading" journey started in highschool at the age of 18. I opened an account with about 4k, turned it into 6k in less than a year (trading mostly stocks and some options) and then lost most of it the year after about 5k loss, i had no risk management strategy, no stops, just pretty much gambling.

Fast forward 2 years, i opened a forex account in 2011 with 5k, turned it into 10k over the course of 2 years. Traded sometimes with stops resulting in small gains/losses from time to time account went up a little but it was extremely slow, most of the time i strayed from any kind of plan and just initiated huge positions, averaged down many times which eventually resulted in big profits as currencies bounced back. At about 4-5 points over the last 2 years I was leveraged close to 40x. Then about 3 weeks ago I had several positions go bad all at the same time, and the leverage was too much so I closed all positions resulting in a 5k loss (back to my starting capital of 5k) and closed my position. Over next 2 weeks I watched the same positions i sold work... go figure. ( i was short usdcad the recent run up killed me, i was long gold and silver, and i was short sp500 from 1780 - it fell to 1740 but the rise to 1850 killed me...). This phenomenon happened with ALL the big positions I had, I had a huge position in gbp/usd long last year that i closed with 1k gain but could have been 10x bigger, I closed a long usdcad position last year at over parity with 1k gain and it is WAY under parity at the moment, so i seemed to also have learnt that I don't let winners run at all.

I figure the next step (which i've already done) is to write down a page of rules, and most importantly trade with stops as I could have avoided everything above with the simple use of a stop. I don't have much of an "edge" in the typical sense all the indicators I've ever tried seem useless to me, I just like seeing confluence of moving averages or support resistance which doesn't always work.

I'm kind of lost with what I should focus on at this point having spent alot of time on this and really not accomplishing anything, I could have bought a market/index ETF 5 years ago and been in a better place financially. But regardless I want to keep trying. I'm still in school studying something that should land me a decently paying job when I graduate and I have no student debt as i've worked part time enough to pay off school... but I have always been fascinated by financial markets just can't quite figure them out... it's like an endless pursuit.

I think #1 you need to ask yourself why you want to trade... really. Yes we all want to make money, so go beyond that.

#2 Figure out what you want to trade, why, then concentrate on that instrument only. Learn whats moving that market today. Don't be one of these people who think some big player is out to get them.

Learn about variance and some betting strategies. I know it seems like a stretch at first but you could consider learning about how these people who play Black Jack for a living size up their bets. It's very mathematical and they basically want to find the sweet spot for betting. Sure they could take huge risks like you did and make huge wins from time to time. But when the huge risks fail, as they do normally, you'll be out bad.

One thing I did to overcome a hump was to make a FX account with 1K, I took small positions, but I didn't feel stressed and just worried about winning trades and not making money. I would say try it on a demo, but if you don't have skin in the game its just not the same.

If your at a good sized University also check out their selection of trading books. I went to a state school and have access to the library subsequently and found those resources to be a boon to my growth. I found some very interesting and difficult to find books through there.

Also consider reading a book on trading psychology. There are a couple of very good books out there which should certainly help you.

Good luck! I know where your at and you can move past.

Hello,

Lets start with some simple things first.

1. Do you plan to obtain a college degree and work full time at that career? If so, do you plan to trade part time? I would focus on obtaining a good paying job that will pay you well for 8 hour a day that you enjoy first and foremost. Many people like trading, but at the end of the day, you will need a stable income and working at job will provided that. SO, get your degree SHOULD be our #1 goal.

2. IF and only if you have extra time, just WATCH the charts! No need to trade, just watch and stare. In other words, start working on a plan on how you plan to extract profits from the markets in the MOST simplist way. Why? Because you want have much time once you start working full time.

You plan must include time of day for trades, enter strategy, exit strategy, stop loss strategy. Just the 3 things enough to get you started. Also, how many contracts you want to trade? And when do you plan to increase your position size.

For instance, for me. I NEVER want t lose more than ($100 on any trade). I trade one contract until I make $3000, then I trade two contracts. I bring my stop loss to break-even once I am winning by $150. Then I move toward my exit strategy. I trade between 7am to 10am. Done!

What I wrote above is my simple plan. Does it work? Sometimes yes and no! I am still working on it. But its a start and its simple.

I have a list a rules I review every morning as well.

I am not expert, but I can say think simple.

Hey Staffpro2,
With all the BS out there it really is difficult to even know where to start from. The mainstream "education" you find on most forums is mostly rubbish and really is just a primer on indicators. Indicators are a path to failure or break-even trading at best. The price chart has the answers not any squiggly lines derived from the price chart.

1. Study the charts and notice how price is reacting. Do this over and over and over.
2. Find reactions that occur consistently.
3. Identify what causes the reactions. No cause/reaction ever occurs 100%.
4. Develop a trading plan/strategy based on your observations.
5. Always wait for price to come to you and meet the criteria of your trading plan. Never defer from it.

I like "old school" to some degree. Good ole support and resistance is a very good place to start. In my thread "The Engulfing Method" I use s/r but a llittle differently than most. Many recognize it as supply/demand.

I'm studying harmonic trading right now and it is very interesting. I highly recommend Scott Carneys vol 1 and vol 2. No indicators. He explains fibonacci the way it's supposed to be used. Most traders here are clueless about how to use it.

I wouldn't trade a live account unless I could be profitable on demo. FOREX is speculation and has little in common with investing. Contrary to why most people get into trading, this is not a get rich solution. Unless you can already trade profitably and have a very large account you will not be able to make a living from trading. The top traders in the world are doing well if they can get 25-30% per year. Investing with these traders requires very large minimum deposits.

Just think about it: If you are fortunate enough to have a 100K account and if you could return 30% per year you would make 30K per year. Could you live off that. Doubtful because if you are living off that then you are using your meager $2500/month to pay bills, pay the rent/mortgage, etc, etc. What about increasing your capital so you can increase your lot size per trade. There is no one out there taking a 5K account and turning it into $1mil in a few years. I challenge anyone to produce credible evidence of this that isn't just pure luck. No one will be able to do this consistently. Doubling your 5K account I put into the category of "luck".

It is more reasonable to find your footing with a solid method that you trade consistently and slowly build it over time. Along the way study your method and other's but keep your consistent method until you find something or add something that you demonstrate on demo works.

Enough of the rant. I wish you luck.

I appreciate all the responses. I agree I need to focus in one one or two setups max and most likely one or two pairs to start. I also put too much weight on news/fundamentals (they are important but i was treating them as important for a 1-4h time frame where they obviously will move the market but not necessarily in the direction of the perceived news...).

I also agree with the point that once i'm working I can't afford to be looking at charts more than an hour a day so I should limit my trading to 4h time frame for entries and daily for S/R/setups.

And i did write a page of rules/what i learnt from my experience about half the page i risk management which was missing from my last two attempts.

Thankyou all for your replies!

Firstly, you did pretty well turning 4k into 6 in less than a year, so you must have been doing something right. You then got over leveraged, had way too much on the table, and lost it all in one fell swoop, which tells me only one thing, you started out as a trader, but you have become a gambler. Losing is all part of the game, but you've got to manage those losses so that you never risk more than a small % of your account. You were not doing that and you paid the price. You are young, and you are enthusiastic, meaning you obviously enjoy trading. Therefore, stick at it, but you must treat it more like a business than a casino. Spend time working out a clear strategy that you can demo trade until you know it works. Use strict money management principles, all successful traders do, and study the markets you trade until you know its personality inside out. Avoid trading too many markets at the same time and stick to just a few, with one that you really concentrate on, because if you can trade that single currency pair or market successfully, you'll make tonnes of money without ever having to look elsewhere.

So don't give up, you have loads of time and the markets will always be there. Organize yourself, keep studying, and become a professional if that is what you want to do. It is the only way to succeed. Good luck!

I think everyone here makes good points EXCEPT for being myopic in your market selection. It is best to trade as many pairs as you can manage based on your time frame because in doing so, you are spreading your risk as well as your opportunities. That said, it would also be advisable to trade much smaller than you think so that you can sleep at night and not have decision-making affected by fear. Good luck.

I strongly disagree with the last post. He currently has 41 positions open, 26 of which are showing a loss. I say again, try not to overtrade, it kills most traders sooner or later, normally sooner. Get to know one or two currency pairs or whatever you want to trade, and turn your trading into a fine art. Sure, on days where one currency isn't showing any clear opportunities, find one that is, because as a rule, once you can trade one, you can trade them all. Once you can do this, you do not need to spread your risk by opening positions all over the place, and, you'll sleep a hell of a lot better to boot, not to mention living longer! I'm serious.

Such self exemination can really prove helpful before we venture into the business.Very good post you have here!

[highlight=rgb(250, 250, 250); color:rgb(0, 0, 0); font-family:verdana]the one thing i don't like however is my technique of looking for "confluence" and S/R levels and "reading" price action still has a whole lotta subjectivity to it, i dont like that because i don't trust myself. I wish i was good at being objective and being creative with objective methods...[/highlight]