1st year of trading

Discussion in 'Psychology' started by keysertv, May 29, 2004.

  1. keysertv


    I started trading a year ago, never had experienced before since I lived in Russia and moved to US only a couple of years ago. I had my ups and downs but since January I am more consistent and started to make some money. I make 3-4 trades per day and 45 out of every 100 is profitable, plus on average I make $3 for every $1 I lose. Right now I risk a small amount on every trade and working on increasing it...

    However I am up only 5% since June last year. This is pathetic and since trading is my only source of income (which is not much income right now) it makes me wonder sometimes if I'm just fooling myself.

    So I want to ask you guys what was your first year like? How long did it take you to be profitable? Do I need reality check or the fact that I still have my capital and becoming consistent is a good sign? What do you think?

  2. Since I want to get into trading in the Forex Market, I'd be really interested to here replies on this post. Please everyone, can you state how much return you get per yr on your capital, and what programs/training did you use to get going?

    Basically, trading is like everything else. It pays to do you research before you jump in...that's what I am trying to do...

    Any advice would be much appreciated.

  3. Your performance depends on the state of the market you trade and your particular style. Sometimes the smart thing would be not to trade but such decision requires experience that comes with the time.

    Generally I think breaking even in the first year of trading is a good if not very good result. But again it depends on the market. One year of trading should provide you with enough data to analyze your performance and take some corrective steps because obviously your goal is not to break even but to make money.

    Good luck!
  4. WarEagle

    WarEagle Moderator

    Unfortunately most new traders don't realize that trading is like NOTHING else. Yes, you should put in as much research time as possible to learn the mechanics of trading, but other than that, it does not resemble any other career choice. Unlike becoming a doctor or lawyer you can't spend X number of years studying and then ::whamo:: you are a successful trader. Anyone with slightly above average intelligence can become a doctor with enough time and effort, but I have seen plenty of very smart people fail at trading. There are other factors that determine success, from psychology, to your method, to your ability to adapt when your method stops working. No book or vendor can teach you these things, only time and lots of buys and sells.

    I think breaking even your first year is pretty good, but its not long enough to know if you will turn it into a lifelong career. All you can do is take it a year at a time and after a few you will have survived enough changes to know if you have what it takes.

    I think the worst thing a new trader can do is to plan on making enough income to live on. If you are undercapitalized (i.e. you don't have at least 2 years of living expenses that are seperate from your trading account) then you need to keep working while you get started. That may mean swing trading or taking a job with non-market hours. The only way you will know if you have it is to trade real money, so basically once you know where the buy and sell keys are and you have some type of method in mind, you need to start trading for real. Start small of course, and as you go you will quickly learn the lessons that no book can teach you, plus you will be glad you have the other income to help during this time. If you are a natural and start banging out profits then wonderful, but I think most successful traders will tell you that it took a long time to get that way and maybe even several tries at it before they knew it would be a career.

    Good trading.
  5. PetaDollar

    PetaDollar Moderator

    I think it's amazing that you made money at all in your first year! I lost 10k. Sounds like you have a nice base to build on.
  6. I started playing poker for money about 8 months ago...low limit online. I limited myself to losing $500 max then i would stop... before I knew it, I was down $700 and said that is it. I decided to give one more try, using basic strategies and since, have never looked back. I guess day trading is similar...u find a system that works for you, then you just repeat it over and over. No guarantees, but if you make money 70% of the time, you might as well, keep at it...
  7. One of the reasons trading is so deceptive is that- like poker- luck plays a big part.
    Last night I was in a poker game for a big pot. I was holding ace, ten and the flop was ace, four , queen- all different suits.
    I bet the pot and everyone dropped out except one guy who raised. I called. The next card was a nine (I think). The other guy went all in (NL game) so I called. The final card was a four and he was holding a four. He won 3 fours against 2 aces.

    Now in fact I had the odds in my favour and he won more by luck than skill. This is not a problem in poker because the odds can all be calculated. I understand that I didn't play poorly- despite losing.

    It is different in trading because the odds for each trade can't be calculated. You can be doing some stupid things - and winning - and not realize it.
    Or be doing basically the right things but lose because of a bad streak. It is why money management is so crucial to longterm success.
  8. I agree that both can be very misleading even at the best of times. I've gone on losing streaks in poker that make you question if you can really play the game. But all I have to do to convince myself that what I am doing is correct, is look at my overall stats. Overall, if you are losing mid to long term, you gotta re-evaluate how to play or trade...it really seems to be that simple. I think a lot of ppl just get frustrated at both early on and lose, and give up.

    The main keys are:

    Keep focus
    Look at overall stats
    Develp a system and stick with it, at least for 3 months
    Don't go on tilt - poker jargon for making "weak" mental mistakes
  9. Pabst


    With that high of expectancy per series, you must really be undertrading to only be up 5% in a year. What % of account risk do you accept per trade? I'm sure I could back into the amount but I'm to lazy to work on algebra right now.
  10. keysertv


    You know, good question and you made me think. Apparently now it's only 0.1% of my account, not much at all and not very risky I guess. But you know, my goal was and still is to learn how to trade first, not to make money right away. When I started I really didn't know what I was doing and I was risking more and losing more. But only since January when I finally went back and analyzed my trades I could see what I was doing wrong and for last 5 months I'm risking the same amount on every trade and just applying my approach to markets.

    What was your experience when you started?
    #10     May 30, 2004