It has been an 8 year long journey now through ups and downs in the trading arena. Went through all cycles: scalping, trend trading, technical analysis, computer trading and fundamental analysis. I have finally reached long-term profitability with a minimum of capital volatility. In this whole journey I discovered some truths (at least applicable to me), which I wanna share:
- scalping is too hard to be profitable over the long-term. large time-frames (H4, daily & weekly) are the time-frames where the money lies.
- trading is a numbers game (betting large and hoping is just a bad strategy), you need a strategy with a positive expectancy
- capital maintenance is much more important than making large profits
- the most robust trading systems are those that lose or breakeven most of the time and only win big some of the times
- it is impossible to predict the markets with a high accuracy
- patience is extremely important and not depending on the profits for living is vital to becoming a good trader (at least in the beginning).
- the trend is definitely your friend
- large account increases will come through compounding over time and through avoiding large losses.
Why did it take so long to become good at trading?
The biggest reason was impatience and a gambling mentality: I was trying to do this full-time, biggest mistake ever, because it tries your patience. You sometimes have to go weeks or even months staying at the same capital base before an account increase follows. If you are like me, you will then ultimately go into gambling mode and lose a lot of money. Having something to do during the day and not needing the profits to sustain my life-style has given me the emotional freedom to be able to wait for months for the account increases to come. Now I am so emotionally distanced from trading, that nothing really matters, as long as I control my losses.