So you come into this industry (finding it by accident or design) bright eyed, innocent and with massive over ambitions. Then after a few months of fighting with our friend Mr. Market you begin to accept that the ‘game’ is not a walk in the park and you’re going to need to roll your sleeves up and work at making a living from it. And if you’ve any sense you realise that it’s going to take time, lots of time, until you’re successful…
So that’s the bad news out of the way, now let’s concentrate on the good news in terms of what you’ve learned so far, in your first year of trading, that has set you on the way to unlocking a reasonable living, or enjoying part time income from the FX markets. Hopefully, if you’re reading this about to embark on your journey into our world of pain, enjoyment and adrenaline filled experiences; we’ll help you to avoid some of the very avoidable mistakes we’ve all made. So much so that the pain, enjoyment and adrenaline will disappear, well maybe not the enjoyment as we all enjoy taking money out of these markets.
I didn’t know it’d be so lonely
If you’ve suddenly decided to give full time retail trading your best efforts then for sure, it is a lonely endeavour that you’re embarking on. However, you do have many options. There’s your broker to speak to and there’s several websites out there to engage on. And there’s the flip side to trading; you should really, once you’ve taken the bicycle stabilizers off, have a lot more time to socialise. With family, friends and perhaps in sporting social clubs at the gym, running clubs etc.
For sure you may miss the camaraderie at the office or on the road, but you don’t have to become a bunkered down siege mentality individual, after all you took up full time trading to avoid the 9 to 5 and to enjoy the copious amounts of extra time and freedom you’d enjoy. So don’t let it go to waste, embrace the change.
I didn’t realise there’d be so much to learn
It’s one of the conundrums and ironies in this business that you end up simplifying everything that you’ve initially over complicated. It’s an inevitability that we’ll add and experiment with every indicator, time frame, moving average and strategy until we arrive back trading off a very simple, close on ‘naked’ chart. This business is in fact a highly creative industry and all the more enjoyable for it. Immersing yourself into all that creativity is an essential step towards your journey of trader enlightenment. What it states to a mentor is that you have the intellectual curiosity to succeed in this business. It’s important that new traders don’t become overawed by the volume of information we have to absorb, it takes time and if you manage your money and your time effectively, you’ll generate all the time you need to succeed in this business.
Trading can really get to you and exploits all your personality trait weaknesses
This is an interesting dilemma that many traders discover; trading somehow exposes all our weaknesses as human beings; greed, fear, impatience, anger, envy, nearly every deadly trading sin is magnified by what appears to be tenfold. Once again the good news is that we’ve identified this as an issue and in doing so we know exactly what the solution is. Early days why not pin up your traits and weaknesses on a pin board above your trading station? When you feel one of these emotions rising to the top read it, think about it and you’ll be on your way to conquering it.
Brokers are not the enemy, 99% of our losses are down to us and our mistakes
Again this is a rights of passage that we simply have to go through in order to arrive at the resolution with ourselves that the vast majority of brokers are honest and deal with us in a very fair manner. Brokers don’t have to cheat as sadly (and collectively) we’re generally that bad at trading they could double their money by taking the opposite side of our hopeless first efforts. But here’s the thing, as you progress you’ll notice that you have less and less animosity towards your broker. You’ll often pick up small issues with them, perhaps your order wasn’t filled on the button, or your stop didn’t get applied accurately, but that’s behaving as a professional; forensically analysing your closed trades for minor discrepancies.
Spreads and commissions mount up
Over trading will kill your progression quicker than getting caught the wrong side of a massive move. Once we become more proficient we need to analyse how much we’re spending on spreads and commissions and how much it affects our bottom line. The majority of ECN/STP brokers charge similar commissions and have similar spreads. But as we stated earlier, if you’re trading at the wrong times, perhaps as spreads widen, or trying a form of low time frame scalping that even institutional traders paying zero spread couldn’t make work, you’ll be making it hard for yourself. Trade less, earn more, stay with us as a valued client.
At first I didn’t use one but now everything I do is from my trading plan
We won’t go on about the trading plan again as we’re beginning to bore ourselves with the message. Create one, put everything into it that needs to be there and never violate it. Every change you make should have a purpose.
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