Far too many trading articles concentrate on experienced traders and trading mentors offering up advice on how to be successful. Very few articles quiz the inexperienced trader and ask for a synopsis of where they are on the ladder of trading success and what remedies they’ve applied, to their overall trading system and strategy, if it’s not quite going according to plan.
Therefore we thought it would be a useful exercise to interview an inexperienced trader to talk us through the issues they’ve faced, how they’ve overcome any problems and ultimately how they’re coping with the overall complexity of what is quite a sophisticated and complicated industry to try to navigate your way through.
“I now know that I’m not going to get rich quick”
The industry isn’t necessarily complicit in the selling of FX as a get rich quick scheme, but undoubtedly somewhere the lines have been crossed and blurred between what is achievable and what is unrealistic. Nowhere on brokers’ websites, or associated blogs will traders’ ever see promises of “riches beyond their wildest dreams”, these promises come from what’s termed “after market sellers” or traders selling their products through forums.
Traders need to keep their eyes wide open with regards to whose information they trust on forums and perhaps pay more attention to brokers’ blogs and articles. Brokers deliberately hold back on the optimism independent websites and forums appear to go overboard on and there are reasons for this. Firstly, a broker wouldn’t want to lose clients through ‘pumping’ the industry and secondly some brokers, depending on their jurisdiction, would be operating outside of their governance if they deliberately attempted to ensnare clients through outlandish advertising claims.
The quicker you develop realistic ambitions for trading the speedier you’ll climb your learning curve and as a consequence your trading development will be enhanced. Setting realistic targets based on two critical issues; the time you can dedicate towards trading and your trading funds is an essential constituent to your progress.
“There’s so much more too it (trading FX) than I thought there would be, I can’t see me ever knowing it all and taking it all in, it’s going to take forever…”
The estimated time it takes for traders to become proficient and profitable depends on so many factors; the time you can dedicate to learning trading, how quick a learner you are and how easily you absorb certain concepts that many experienced traders will appear to have hard-wired into their DNA. Trading mentors are fond of stressing “patience” in terms of not rushing a trade entry until the high probability set up has occurred and that patience must stretch to how long it’ll take the new trader to become profitable.
There are various estimates, some mentors would suggest four years of full time dedication, significantly more if you’re only trading part time. But as an overall subject it’s always deliberately overlooked by many brokers and sites promoting FX for the simple reason no one really wants to be told that this journey, that you’re taking your first steps on, may take four-five years until you’re profitable.
Subconsciously we all want to believe that we can beat the odds and crush our learning into less than a year. Experienced and credible mentors would crush this optimism, there really is so much to learn, the majority of which can only be learned by ‘doing’ not theorizing.
“I wish I’d made a plan and kept a trading diary, I’ve got a good idea of what I’ve won and lost, but I do feel that it’s very hit and miss.”
We really can’t stress enough how essential devising a trading plan and keeping a separate journal is for your development. And the two shouldn’t ever be confused. We’ve covered how to devise a plan and what to put in it many times and there are numerous free trading plan templates available if you search through a web search engine. The journal is an incredibly useful tool at the outset given that you can; list your emotions, where you went wrong, where you went right and you can clearly see your confidence growing in proportion to your competence.
“I wasn’t quite prepared for how emotional if find the whole process.”
It takes years of practice in order to remove the emotions from trading, and when you’ve got your own money on the line it will always be an emotional experience that will lessen once you’ve been exposed in the market for years. None of us like to lose money, none of us like to lose period, but losing and losing well is an essential aspect of trading.
We will lose a lot, a lot more than we expect, nearly fifty percent of our trades may be losers, particularly if we’re adopting a ‘fire and forget, trading strategy. And this cognitive challenge flies in the face of our own personal wiring, it’s as counter intuitive as it comes to enter a trade when you know you perhaps have a fifty-fifty chance of losing.
There are many other aspects new traders will experience in their early days that are worth recording and analyzing, in this article we’ve only touched on a few. If you’d like to add your views and comments at the footer of this article we’d be delighted to receive your contributions.
