Hi my name is Ray. I read your entire thread. I'm somewhat in the same boat as you. I've traded stocks, futures, options, and dabbled in currencies. I started out reading books using a demo account and then actually trading. I am not a profitable trader but I learned a great deal thus far. Not being profitable is discouraging, yet it is none the less why most traders give up. Not being profitable is part of the process. As I keep focused and see what goes on day to day I learn more and more. During my time losing I was seeing psychological flaws in myself that I would never have thought had I not gone live with real hard earned cash. Look up "efficient market hypothesis". It is essential that you know about it. But do not let it discourage you, there are people who make a living behind a laptop. A good book is "millionaire traders" which is comprised of many interviews with successful traders. The book identifies how people got started, how much they lost in the process, the various strategies and basically the differences and similarities of these profitable traders from all parts of the world. I opened an account with Interactive brokers. You need $10K to do so. With that you can then open a demo account with them. The demo account is identical to the real account (minus slippage). I would say a major part of my losses are due to error in order entry and lack of understanding the underlying. Also when you think you have the perfect set up and youâre going to take a position, know when the economic reports come out, know your exit considering the trade going either way. Another few things I believe will help: I took a class in economics which I feel is a must. You cannot fully understand what goes on and why unless you have a foundation in economics. Then again if scalping is your niche you will not really benefit by that knowledge. Keep in mind that you can be an investor, longer term trader, swing trader, day trader or scalper. Also I read and currently re-reading the book "The Black Swan". That will give you grounding in understanding highly improbable events and how you can interpret them. Also do not let that book discourage you, it barely acknowledges that traders can be successful without being lucky. You will have a better understanding of statistics and how to look at them. Get a book on statistics too, take a class even. If you are a day trader you can determine your stats faster than a long term investor would. Not to say one is better than the other. If you hold positions for a long time and your making money it may be years of taking profitable trades for all of the wrong reasons thinking you knew what you were doing. You can easily spend the next 3 years losing while using the same mindset and strategy. I know of someone who took a few thousand and turned it into over 500K in a little over a year shorting the financials. Then when Bear Stearns was at 30 he went long with everything he had and then some. Don't let being profitable convince you too soon that you know what youâre doing. Beware of seminars, trading tutorials, mentors etc. I would say that not all but most who offer a product or service are better salesmen then traders. It is probably very difficult discern who is really knowledgeable and then why are they offering something. For all of those who are talking you out of this know that no one was born a successful trader. No one not even yourself knows if you have what it takes. If you really want to find out youâll never know unless you do it. Just be smart and try to do as much preliminary learning to minimize loses.
Thanks for writing Ray, I`m hitting the books like a madman at the moment. I`ve already studied a few books on economics and I find it very interesting. Definitely helpful when it comes to understanding the bigger picture. Statistics is also something that I feel I should learn more about so it`s on my reading list. I have not read an actual book of Taleb yet, even though I`m aware of the guy and got the gist of his message from reading some articles about him. He`s on the reading list though Thanks for the book tips. I`ll check them out. Market Wizards are also good reads if you did not read them already. It seems like I have to get started working or something in january/february. I`m starting to see the bottom of my treasure chest and I`m kind of tired of living at home PS: I also started a journal, but it got moved to the Career Trader part of the forum due to me not trading anything yet. Happy trading! Best regards, Johnny
TO: Johnny DATE: Nov 28, 2008 RE: Seeking Your Forex Trading Update Hey Johnny, 1-are you trading real, demo or neither? 2-if real, how many lots per trade? 3-if you are trading or will begin soon...what cross rate will you trade?...or become CONSUMED with?...AUD/USD, EUR/USD, USD/JPY etc etc....do you agree with "being literally consumed" with one currency cross rate ONLY? 4-if not trading for real...when will you begin real/live trading? the BEST to you!!!...go for it!! IncreaseNow
You can read for years or you can apply what you learned and find out if you have a future in trading. PUT THE BOOKS DOWN. Trade on a sim. Begin as small as possible. Create your systems. Trade cash. When you are profitable, increase your size +1. Repeat. You will not learn how to trade by reading books. You must trade cash to encounter and conquer emotions before you can take to heart the meat to grow on, from select ET posters and that library of reading being thrown at you. You will find out in short order if you are the type of person that becomes a good trader. If you're not, then all the book learning in the world will just keep your hopes up for as long as you read. Would you go to medical school and residency if you cannot stand the sight of blood?
Why are you hitting the books? What's that got to do with trading? A class in econimics....ROFL that's really gonig to help you as a trader. NOT
right, who needs books, education, advice.... hell you don't even need to be a literate. Come to think of it the more oblivious you are to the world around you the better trader you will become. Sure as a certain trading style evolves its success may not have anything to do with 95% of the information available but why avoid learning some aspect that might benefit you. Especially when starting out. I say learn everything you deem neccessary and discard what doesn't work for you. Pretty simple actually. Geez not like I told him to explore volcanos or something
Hello increasenow, 1 - No trading for the time being. I hope to be ready to start watching and observing the markets in february or march. 2 - 0 3 - I`m not sure if I will trade Forex. If I were to do so, it would probably be the EUR/USD. Being consumed with one contract sounds wise in my opinion, but you are probably not asking the right person yet 4 - Answered above I believe Thanks for the kind words and good luck to yourself! Best regards, Johnny