Two Suggestions for New Forex Traders

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This topic contains 1 reply, has 2 voices, and was last updated by  JamesP 2 years, 9 months ago.

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  • #1242

    Michele
    Participant

    The first time I heard about Forex still stands out in my mind. In a video two young men stood in front of their expensive cars talking about how they made their money. One in real estate and the other was vague about how he made money but they both said there was an easy way to make money trading Forex. They showed a currency chart and said when the candles are green you buy and when the candles are red you sell.

    At the time I had serious financial problems as a result of a collision between a business land purchase and a literal landslide. Business debt and lawyers fees were piling up. My husband and I were lucky; we couldn’t afford to go out for dinner but we had jobs and enough money for groceries and rent. We made a plan to dig ourselves out of our problems. Still I felt worried and financially vulnerable, so I started staying up late watching Forex videos and opened a trading account

    One of the videos said traders typically go through stages as they learn to trade. From loosing to break-even and then profitable. Of course everyone wants to be profitable, the sooner the better. At 5 years in I’m at the break-even phase. If you’re thinking of trading Forex you may be able to do this faster. I would never tell anyone don’t plan to buy the expensive car. Some people learn new skills quickly, you might learn much faster than I have. However I would say if a Forex mentor says something like – you won’t be able to sleep tonight because you’ll be too excited about all the money I’ll to show you how to make – move on, learn from someone else because you’re likely being conned.

    I can’t tell you how to be a profitable trader because I’m not there yet but if you’re an average person I can offer 2 suggestions that should make the first phase shorter.

    1. Believe nothing. Believe nothing about Forex until you’ve checked it for yourself. I literally mean this, check everything you hear by looking at your own charts. Successful traders have guidelines that work for them but they shouldn’t be your guidelines until you’ve checked for yourself that they work for you.

    2. Have a Trading System. This can feel like unnecessary work if you’re in a hurry to make money. It was only after not getting anywhere by just trading what I felt was going to happen that I accepted the need for a trading system – a clear set of criteria for entering and exiting trades. Trading got a lot better for me, less frustrating and more predictable when I started writing down why I wanted to enter each trade before I placed the trade. This is one of the reasons I trade the Daily chart, it gives me time write down why I’m taking the trade and what might happen if price doesn’t move the way I thought it would. There isn’t time to write this down if you trade the 15 minute or 5 minute chart but you should still be able to explain why you’re taking the trade. More than just it’s a green candle so I’m buying.

    Not everyone is perfect. And not everyone follows their trading system 100% of the time but having a system and the expectation that you follow your system more often than not should help you. One evening this week I didn’t follow my guidelines and I took a trade that can only be described as stupid. I entered the trade without waiting for the set up to complete properly but with having a trading system I knew it was a stupid trade and that I’d likely need a plan for getting out of the trade without Stopping Out if I could manage this. So I put on the trade and went to sleep and dreamt I was in a tall building and wanted to take the elevator to the top of the building but there was a sign by the elevator warning people not to use the elevator until the bus of tourists outside the building had left. This didn’t make sense to me in the dream so I got on the elevator along with another person. Suddenly the elevator was zooming up hundreds of floors very fast and then without stopping it zoomed down again. It was scary. I woke up and thought oh yeah that’s my trade and I was warned; don’t get on right now. Sure enough when I did check the charts price had moved in a way remarkably similar to the elevator. If my elevator dream is correct, I may not get a chance to get out of this trade before being Stopped Out. But that’s okay too. It will be a lesson to remember.

    Bottom Line:
    1. Believe nothing anyone tells you about Forex. Check it for yourself.
    2. Have a Trading System. Stick to it as much as you can and when you fail to stick to your plan use this as a learning tool. Look carefully at what you saw on the chart that swept you into the trade and look at what was going on inside you that made you vulnerable to not following your trading system.
    Thanks for reading this.
    Michele

    #1243

    JamesP
    Keymaster

    Wonderful post Michele, please share us more details about your feeling when you have losing (or many losing trade in a row ) or winning trades and how to improve it?  Thanks!

    • This reply was modified 2 years, 9 months ago by  JamesP.

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