What is your hardest-learned lesson in FX?

And once in 3-4 years you come across the yen move that started at Oct 2012 and yen got depreciated 3000 pips against EUR and you loose a lot of money, right...price "must" retrace...:-)

the hardest lesson? Surely about time management and being discipline. as we all know, forex psychology is very important and I think greed/fear play much bigger part when we "overanalyze" and monitor our positions way too often. I have been trading seriously the past half year and more, with the previous year was struggling, losing, and learning from method A to method Z. one thing that i learned the most is that, you should try your best to "remove" yourself from the chart. analyze your chart once, put TP, put SL, and let it run. that's it. if it hits your SL, move on.

life is much less stressful when we don't look at the chart all the time, looking at price goes up and down, from minus position to plus position back to minus, what's the point? You set your TP, you set your SL, and whichever price hit first, then that's what you should care about (and if your trade plan involve moving stop loss to break even after it reach certain S/R or pips, then you can use an EA for this)

now if you keep looking back at your chart, sometimes your fear will affect you. for example, you are buying and you look that atm you are losing. you move your TP to below your original TP and your R:R ratio suddenly become very different than your original plan. you will regret it once it actually hits your original TP. That happened to me in the past but since i tried to "remove" myself from the chart and my computer, my results in long run have improved.

stick to your plan, drawdown happens, and what matter the most is your result in long run. that's the lesson that i didn't want to accept at first but now i totally understand (previously i always wanted to have profitable week. now i just move on if i have bad trades)

The hardest thing for me is to determine a swing high/low within a trend....

Trading break outs. Lol.

Also overanalyzing. Took me an year to get rid of everything that cluster my charts. But as a newbie of course i bought into all the youtube videos. Took me a long time to really have an idea about what does "technical analysis" means. Using indicators and turning a chart into a Picasso piece doesn't means it's technical. A naked chart also doesn't means it's not technical. Personally at this stage, I don't buy too much, i still do, but not too much into candle sticks pattern. Reason is, Forex is not stocks. Every brokers have different closing time for the candles. Your shooting star might be nothing to me. I run 4 different Meta trader with 4 different brokers when my battlestation is online. And they all on different time zone, all patterns are different. So which one should i use? Stock markets is a different story because it have a set opening and closing time. Anyway, not really going to drag on this subject as it can easily turn into a whole new thread.

But most important, is I learn how to filter how all the "NOISES" around me. As a trader we are taking in tons of information, constantly as we try to get a pulse of the market condition. We might go on forums, see what people are doing, we check out the news, like bloomberg, reuters, what ever we have at our disposal, at the same time we are monitoring the prices, spotting zones and what not. Basically a mindcluster. If not careful, it's easy to let our mind slip and start letting the information influence our action, without processing them with a clear mind.


Also, don't look back and say i should have. No. never. History is history. Be it a small lost, profit too early. Whatever reason, it was in your plan. You act it out so it was a good move on your part. Only go back to fine tune your plan if you have to. Don't dwell on the trade itself.

This is a tough game. I believe I still have a lot of hard lessons to learn. But I embrace the next challenge, because I know if I survive it, I will level up! and be a better trader.

Go one way, or another, don't try to catch two buses. Easy to get run over when running across the street to another bus stop. Also if you are late for the bus, don't run after it.

Also I agreed totally agreed with rsg10z. Don't let this consume you.

That Psychology (patience, fear, greed) is everything ............... number one. PA can be mastered quickly provided one sticking with one system and high win rate is very attainable ... assuming the mind set and psychology is mastered.

I am a newbie and after 6 months (10 hour/day reading chart) ... I am correct 80 % of the time for 1:1 risk reward trade however I still need time to master my psychology.

It did not go down 3000 pips straight without any retracement at all...Be it 5mins, 15mins timeframe. With proper MM and good averaging technique, 10-15 pips can cover a 100pips lost. or what not. of course it's a dangerous, very dangerous strategy. But it doesn't means it doesn't work. I don't use that Martingale or whatever strategy. I simply just use position averaging if the trade still have some chance to see "day light". I personally rely on this technique quite often. My risk tolerance is about 3 rescue attempts before I consider taking a lost. Key is leverage. If you initial position is already at 20:1 or higher then of course, The account is going to blow. Don't try this unless you are well capitalize, or trade accordingly with mini lots.

I totally agreed with you. The psychology that this beast can provoke is sickening.

totally agree. psychology is very very important and the hardest to master.

this is the reason why i chose to trade only in higher timeframe H4/D1/W1/H8/H12, mainly D1. because back then i just couldn't hold the temptation to keep looking at chart and my floating positions if i stay in front of computer way too often. with trading higher timeframe, i trained myself to always turn off my computer (at least the MT4) and reopen it only 4 hours later (and i dont even trade intraday in asia session and during my sleep time). If i trade shorter timeframe now, maybe i can do it as well but i rather stick to my original plan because it works so far so why not keep doing the same thing...

greed might not be so much but fear is definitely the hardest to master. when you have several bad trades, sometimes you feel uneasy and start to overlook small details in PA, and that's when you start having doubts. This "lack of faith" in your own strategy usually lead to path of destruction. either you change your strategy again or you simply double your lot size because you want your money back as soon as possible. thing is, everyone I know always has drawdown, it's just part of trading life. you cant have the same result every day, every week.

fortunately this kind of "fear" never affect my trading decisions and money management anymore. but anyway i trained my psychology by trading in higher timeframe because it's less stressful to me. i dont have to open my chart again and again so less temptation as well lol. ofcourse everybody is different but that's what worked for me. also of course giving suggestion to ourselves is very important. i write trading rules on my note and everytime i'm about to open a new trade, I always make sure all rules on my note are followed (just for double confirmation i don't overlook any minor details)

I am trading live for the last 4 years.I believe the only secret to survive in trading is your behavior i mean your trading style according to your account size.
Mostly the trades who blow up the account is due to the bigger size of trade and then waiting when its going negative. always trade small size when you have a account less than 20000$.The market will always give you a chance but if the trade size is big then your nerves comes in and you do some thing silly. In 20000$ also i am not saying to put huge size of trades.i will suggest you to trade 0.50Lots .Rest look for the trend that you will learn with experience.
Best of Luck to new traders.

My main lessons learned are as follows :

1 - Have a trading strategy and only trade when the signals show you to trade. There are a lot of pips to be gained every day, dont become impatient and disappointed because you missed a big trade - new ones will come.

2 - Don't be greedy and let your winner turn into a loser. Thats the best way to grow your equity

3 - Cut your losses when your strategy (see 1) shows you that your trade will further turn against you. Don't see the money you've lost as lost money....see it as the cost of trading forex.

4 - Use a stop loss and dont make it too fat. This can wipe out half of your account.

5 - Be confident - the signs have shown you to enter the trade.

Forex trading can make you extremely excited and happy one moment and very depressed the next.

What is your hardest-learned lesson in FX?
Still ahead of me.... I am afraid...

There's the first one.....don't be afraid

Be carefull

That's for sure, no doubt about it....

[/quote]I am trading live for the last 4 years.I believe the only secret to survive in trading is your behavior i mean your trading style according to your account size. Mostly the trades who blow up the account is due to the bigger size of trade and then waiting when its going negative. always trade small size when you have a account less than 20000$.The market will always give you a chance but if the trade size is big then your nerves comes in and you do some thing silly. In 20000$ also i am not saying to put huge size of trades.i will suggest you to trade 0.50Lots .Rest look for the trend that you will learn with experience.
Best of Luck to new traders.[/quote]

Really listen to these folks here. When I learned to trade small and keep my losses down to where I never had my account threatened then I became profitable. Too many people approach this business as a week by week paycheck rather than long term investing. I go for reasonable profit goals of 5-10% a month. I found out I can do that consistently if I trade small, be patient in letting a trade time and room to move in my direction. The above person recommended .50 lots per 20K. If that is a 50 cents he is trading 2 1/2 cents per thousand of account. I usually trade 3-5 cents per thousand so that is very conservative and safe. If those are 5 dollar lots he is trading 25 cents per thousand of account which is much more aggressive and needs to keep his SL tighter. Lot size to account size is the most important trading decision you can make. If I trade 2 1/2 cents per thousand I can go 100 pips in the hole and be 2.50 down, if you take a loss you still are in very good shape with your account and you really dont notice the damage. If you trade 25 cents and go 100 in the hole you are 25 dollars down but compared to a 1000 dollar account you are still in good shape with no major account damage however you cant have a string of losing trades without account damage which happens in Forex. You live to trade another day. Too many traders get blown out on trades that go against them on a bad day and their accounts are badly damaged. You simply can never avoid the bad day, week, or even bad month. I had 2 losing months and 10 winning months last year. Protect your account from bad damage and eventually you will get it and become a consistent winner. Once you understand the market enough that you hit that 70% plus win rate you can consistently have 5-15% increase of your account most months and you never damage your account. At the end of the year you can be sitting on a 30-70% increase of your account and you have a great investment strategy. You would also be one of the top traders in the world. Just dump the whole concept of doubling your account every week, month, several months etc. and trade within the size of your account. Forget the looking at the guys who increase their account 1,2,3,4,500% a month. You dont see them on the list again because the next month or the next, they have blown out their account.

I have a simple rule, if your trade sizes or amount of trades are so big that you cant go to bed and sleep and you are worried your account can be damaged by a certain move. You are trading too large of lot to account size. If you can take 20 losing trades in a row and still have 90-95% of your account left then you got it. If it would damage your account so you are hurting both account wise and mentally wise your lot size to account size is too big. Learn that lesson and get your expectations under control and you can succeed in this business.

For me it's that stress and too much risk and so-so set ups aren't worth it. I make more money from less time, less stress and less risk/small positions. The more pressure I put on myself the quicker things start going south.

Trail the stop next time ??????????????????????????

This is actually something I had totally forgotten about But you can be sure I'll do that next time, always another day, another dollar in the FX

As a pure chartist, I prefer closing my positions at end of day. However, I do not follow the rule slavishly as conditions may suggest a longer commitment. But as a general rule, if you know your markets, you will make more than enough each day to not bother with holding longer.

Trading for a living is a pipe dream for most. One would need a very large account to do so assuming one knows how to trade profitably. Just do some simple calculations and you will see what I mean. Learning to trade profitably consistently (no matter the % increase in account size) over the long term is a reality most don't want to accept. The top traders in the world are lucky to make 20-30%/year. This is a concept lost to most traders here.

First you must learn how to trade and this is absolutely the most difficult part of trading especially if you are looking to learn how to trade at forums like this. 99.9% of traders here don't know how to trade. Reality is often difficult to accept but....

Targeting 20-30% a year, and clearing your head completely of all the 100%+ crap, is one of the hardest lessons for retail traders to learn IMO. Everyone wants to ride trends forever, and leave TPs open 'just in case' the market moves a long way in their favour.