It’s worth starting at the end of the article title, as none of us like to simply “give up”. There’s something about: quitting, walking away, surrendering, that should never fit comfortably with you psyche. Imagine for a moment, if you gave up easily on other pursuits, you’d never achieve anything. We persevere at difficult tasks because we know the rewards are there. This isn’t necessarily an instinctive, belligerent motivation or choice, with trading you will have experienced some forms of success, so why not try to discover how that success (however fleeting) was won and look to replicate it?
If you’ve tried to build either a part time, or full time career in the retail FX trading industry, you’ll have: expended a lot of energy, become involved in a significant amount of research and exponentially increased your knowledge regarding economic fundamentals, whilst experiencing a crash course in geo political issues and micro and macro economics. All that education, all that effort, that quantum leap in education, would be wasted and rendered pointless, if you suddenly turn your back on trading.
You might have discovered technical analysis for the first time and whilst you might doubt its validation in terms of technical indicator strategies, you will have learned that certain indicators can and often do ‘work’. You may have noticed that the price of a currency pair responds to significant DMAs; such as the 100 and 200 DMAs. Price also responds to round numbers, such as perhaps GBP/USD at 1.3000 and various daily pivot point levels. And price is undoubtedly the greatest leading (as opposed to lagging) indicator there is.
Therefore, it stands to reason that if you could figure out price action, keep an eye on: key DMAs, round numbers and pivot point levels, whilst keeping a weather eye on breaking fundamental news and craft a simple trading method and strategy around these factors and concepts, you might have a chance of becoming a successful trader. So before you give up, ask yourself if you’ve managed to craft a method based around these principles? If not, then perhaps you’re being too hasty in quitting. Why not spend time to re-examine your method and strategy, to see if you were simply getting the basics wrong? Correcting your faults can be a far simpler exercise than you might consider.
Before you quit why not consider: how much you’ve lost, who to, when, where and why? If you’ve been trading FX and you haven’t traded through an STP-ECN broker, then you’ve been at a considerable disadvantage, from day one. STP-ECN brokers offer a fully transparent access method to the FX markets. Your order is routed to a liquidity pool ASAP, without any interference. The broker’s mission is to have your order filled in lighting quick time, at the best price available, the broker’s profit comes from a small percentage of the volume of orders they place. Therefore, it’s in their interest to retain clients and they can only do this by being the best class of broker in the market.
Compare and contrast to market making/dealing desk brokers; who fill your orders on their proprietary platforms and give you spreads that could be significantly away from the best available. When you lose they win and they have no incentive to encourage your success. They’re online bookmakers, not brokers. The damage this type of trading could have made to your bottom line, is unquantifiable. But just consider for a moment, that you might have been losing a couple of pips, on each trade/round trip, due to unnecessary costs. When measured over thousands of trades, you could be down tens of thousands of units of currency. So before you give up, consider stepping up to an STP-ECN broker, and trading through an independent platform, such as MetaTrader MT4.
You might have been overtrading, you might have been trading with too much risk per trade, you may have been far too impatient and set yourself ambitious and completely unrealistic targets. It might be worth analysing these issues, to see if you’ve harmed your chances of success. Overtrading is a simple fault to address, just trade less. Stop chasing the market, let it come to you. Adjust your trading plan and make a commitment to only take one or two trades each day, whilst you attempt to discover a new profitable method and strategy and set yourself a limit to your losses.
Surely you can continue to trade, if you decide to trade through a micro account, risking only perhaps $5 per trade, whilst limiting your ‘circuit breaker’ loss (on any given trading day) to perhaps $10? So before you give up look at how much you have left in your account, consider how excessive and random risk, might have impacted on the chances of probability, working in your favour.
If you only have a $1,500 account balance, then risking $7.5 on each trade, 0.5%, with a maximum loss capped at $15 per day, would be considered good risk management by all professionals. You’d need a catastrophic and highly unusual series of losing trades, to lose a significant proportion of your account, using a strategy you’ve tested for its efficiency, before using it live. So perhaps consider using demo before live trading, however small your account is.
There’s many genuine stories of traders who had to get it wrong, several times, before they finally got it right and became profitable and successful. They didn’t give up, not out of some bloody minded determination, they simply and calmly reanalysed their previous approach, and reapplied themselves to the market, with a completely fresh approach. They will have also completely recalibrated their targets and set far more realistic ambitions. Maybe aiming for 2% account growth per week.
That successful trader could and should be you, as there’s no reason you have to give up. Just change your mindset. Consider it this way; you’re only just starting out, on your new adventure and efforts, with an enlightened attitude, a revised method and strategy, concentrating on managing risk and hunting out probabilities, wherever and whenever they exist.
