Your Trading Struggles - What is the biggest factor?

Ah, the low capital returns risk factor..yup, that's especially the case for newbies with a micro or smaller acc..

I do agree that capital could be an issue on really really small accounts but I've traded really very conservatively with 0.01 and 0.02 lots on a $200 micro lot in the past. It's very possible to risk 1% or less of your capital at that amount. I could see a potential issue if your system requires very wide stops.

If you're referring to the psychological issue of wanting to earn an income off a $500 account using standard lots, I agree that that is definitely a roadblock to development.

I've just begun a blog discussing many ways that I think novice traders can improve their development. It's in the very early stages and isn't commercial so it should upset the FF mods. I'll spell more out and give everyone my grand view once I get a chance to write more.

http://www.tradethedream.com/

I'd love to know what you think. My intention is to give you guys actionable steps to improve your trading and eventually a step by step guide from complete novice to consistently profitable traders.

This is my first post in a long time.

I've had more success in the last 18 months of trading then the 3 years previous (and in one of those years I attempted to trade full-time).

My advice to anyone seeking an advantage in trading is to walk away from trading forums (controversial I know). However, how many times have you seen people claiming to be professional traders with systems that promise 90% win rates? Only to find the same person on other threads trying other systems or posting new systems themselves. Tradedream you said it yourself that you 'system hopped' for years. I for one have posted a few ideas and systems myself that I found worked ok only to switch to another system I read about as the author claimed to be a pro with an unbelievable win rate.

This is the first time in 18 months I've looked at the boards and I have no intention of going to the 'trading systems' or 'trading journals' threads again. Now this is not the fault of anyone but myself and because of this I pick number 4.

4. Beating your trading demons (greed / fear / impatience)

Greed is what drives you to search for a Holy Grail, Fear of losing money hence why many demo and demo again (however it's TIME that you can't get back, not money), Impatience of wanting to get rich quick, of chasing a trade.

This can be beaten though with faith in your system and realistic goals.

When I got my first fx account in 2006, I thought I was gonna be rich rich rich!

Now, I realize trading is a business very much like selling shoes. You have to know what is in fashion, buy at wholesale, sell at retail.

That was my biggest struggle.

Fantastic response, thanks Kraven. What would you say has been the biggest step for you in your success over the last 18 months that's not related to forums, has your approach to expectations changes, or perhaps you're much more thorough with logging or following your rules?

Agree with you too jmn5611, I think most of us come in to trading with such huge expectations that it's almost natural to fall into the traps that I mentioned in my first post. I'm going to start a new thread soon that I really hope might help some new traders in the form of little exercises / challenges. We'll see how it goes.

Also! Keep the thoughts coming guys, I'm so glad that as many people are contributing as they are, I didn't think it'd be a popular topic but it's one of the most important in keeping our progress always moving forwards. Self- awareness is a massive factor to constant improvement.

The road to becoming a successful trader is long, arduous, and extremely difficult to endure. What turned my trading around is price action and the consequent ability to properly read the charts. Far too many aspiring traders spend far too much time looking at indicators as opposed to what the price is doing on the chart in front of them. Once you have a clear idea in terms of what's happening on the chart you'll still have to learn how to manage your emotions and properly manage risk. Many people aren't able to overcome this challenge but with practice and perseverance it can be done. The key is to find your edge and then master it to no end. I've worked really hard for over 10 months on mastering my strategy (I've manually back-tested over 3,000 occurrences of one set up and forward tested it in live market for six months). Remember, all you need to do is master just one thing and if you combine it with patient practice you'll see that it'll bring better results instantly. Lastly, I strongly recommend practicing on a simulator to build your confidence in your strategy, not to mention, it'll also improve your chart-reading skills. This month I've taken 13 trades of which 11 were winners with a net profit of 340 pips and 2R. It took a long time to get to this point but if I can do it there's no reason why anyone else cannot do it. It's just a matter of sensibly honing your skill set and remaining passionate no matter how hard it gets.

Firstly I agree with a lot of what EnoFX said in the above post.

In response to your question both my approach and expectations changed. I took a step back from trading and didn't look at anything forex for several weeks, instead I concentrated on life. Forex is very addictive and can be all consuming at times. When I returned I didn't have high expectations of turning my account into millions or even of living off any profits (it's amazing how many people here believe they can fund an account with $1000 - $10000 and think they can make a living off it). I am now trading for early retirement. My new goal was to beat any investment or bank interest and I have to say i'm exceding all expectations 10 fold.

Not to go into to much detail, I first decided how long I wanted to spend staring at the charts and what timeframe would fit into my lifestyle (although I seem to be spending more and more time chart watching, but why not as my enjoyment of trading is back). I then cleaned my trading platform of all the fancy indicators and templates I'd collected and just started again with the bare bones. Then I basicaly looked at the charts from a different stand point, eliminating all chaos and panic I seen in the market which then left the markets looking more smooth and flowing. From there I chose points of interest, SR places I believed the market would once again respond too. I'd then see if the market responded to those places and enter. Although many of my entries are bang on the button they don't have to be, such is my confidence that i will get a response in the 'area' of entry. That confidence is achieved by knowing why you entered, having some sort of basic confirmation/confluence and seeing the same thing work again and again, be it back testing or forward.

If you look at a chart what can you go off?? The only thing you or anyone else can look at is the past, so make sense of it. the future hasn't happened so you can't go off that and I'm sure 2 MA's crossing or a fancy indi doesn't dictate it.

I agree 100%. It's great that you're doing so well, hopefully there are some more stories like yours.

For anyone who's interesting, I've started another thread in "Trading Discussion" which will lay the ground work down for creating our own quality trading system. Please note a trading system is only a part of the success pie but it's a necessary part. We're going to trade a system that we've had experience with in the past with only 1:1 R:1 in order to gauge it's accuracy. From there we'll make tweaks based on our observations moving forward throughout the weeks. Hopefully you'll find some value. Link

From what I'm gathering from your second post and from your above link your trading has stagnated and your searching for a new style of trading?

your strategy in the other thread is good but slightly flawed from my personal findings. I wouldn't be too concerned about trend following on lower tf's. Just adjust your expectation I.e. Against trend 1:1 with trend 1:higher. This is controversial but don't rely heavily on candle patterns, rather then let them be confirmation that you have the right entry point even after the trade has been made. Candle patterns take time and take up precious pips to develop and are often wrong.

Pick your point of entry, justify why, confirm entry timing with a simple confluence of your choice.

That strategy isn't my strategy mate, it's just an example strategy for the sake of the challenge. One that can be easily adjusted based on the outcomes for the 2 weeks.

#5

I've learned the banks always earn regardless of what I do since they pay themselves through the spread. How can I learn to use this to my advantage?

Whenever I was feeling lost I'd always remember the fact that there are people out there who make consistent profits in the market and if someone else can do it, there's no reason I can't. If you want to chat send me a PM, I might be able to make some suggestions moving forward.

I tend to agree with victor ray,

most people look for a constant safe way of trading, but it's not how trading work.

sometime is extremely hard to make even a little profit (call it unlucky cycle if you want), sometime it seems like make tons of profits is extremely easy (call it lucky cycle).

You may like t google "the winner effect", it explain how the brain of a trader in a "lucky cycle" is extremely different than the one in an "unlucky cycle".
It have mostle to do with the levels of testosterone and dopamine that are created with every profitable trade, the more testosterone and dopamine is in the brain, the more the trader is inclined to make another winning trade (that will produce more testosterone) etc.
As these substances in our brain builds up, we tend to take bigger risks (and make more profits), untill a real loss kick in, and lower down the testosterone.

The opposite happen in a loosin streak (unlucky cycle), each loss lower the testosterone and dopamine levels, and create cortisol.
At this point, the trader is in fear, fear of future losses, want to limit the risks, is scared of make a loss, and the result is make more and more losses.

Systems really are bullshit, trading is 99% mental, master your mind and you will master trading.

As victor_ray said, the key is to play big and make ridiculous huge profits during the lucky cycles, and stay calm and dont loose too much during the unlucky ones.

No matter what, these cycles are hard-coded in the brain of every living being in this world, so we have to deal with them.

Cheers!

Simple, own one..just kidding.

It seems what everyone is saying is there's really no trick to it, the thing is there's a well defined process and learning it and doing it is the only real way to earn something. No made up system is really going to profit unless its allowed to and room is made for it. Is that right? So my next question would be on what systems exist like this already. First let me say I'm well aware that I could never really earn the banks any more then they already make since they deal with trillions of dollars a day however if they earn whatever the spread is which is typically lets say 4-5 pips how can I trade such that I earn that 4-5 pips which go to the bank plus something for myself. The only way to keep the process going I imagine is if every trader can continue to trade. That means the bank keeps earning that 4-5 pips a trade so if everyone keeps running out of money or loses then there's no money to pay the spread. I feel in a way I learn to work FOR the banks because they may say my job is to earn them so many pips on the spread a month and I get paid to do that. Does this make sense? If I don't blow my account then the bank receives that consistently from me and I earn from it. Not only does it seem that I'm not trying to get over or take advantage I'm working fair and square and earning a profit and I realize what happens when I fail so I keep my losses to a minimal to do my job to protect my banks profits and mine. Again does that make sense?

LOL, but look at it this way, there are brokers where the spread is damn tight..so worrying about the pip spread is not really the way to go about it..

Biggest struggle was overcoming the emotional side of things and coming to terms with the fact that we as retail traders can never know the outcome.

For any trader to be profitable they have to be consistent, and for that to be possible all emotional and psychological barriers need to be removed from any trading decisions. There's a reason why Wall Streets best are sociopaths .. people as such thrive in that sort of environment to be successful traders.

Though this lesson has been my biggest challenge, it has been my greatest lesson, as I have learnt that this game is very much like war.

And if you know how to win wars, then you know how to win in the markets as well..

It doesn't suit my personality.