I trade Forex markets professionally. I’ve been very successful at that. But it didn’t start like that. In fact, initially I was not successful at all. I was forced to reevaluate my entire methodology and what I thought I knew.
But it was worth it. After a period of reassessment and study, I was very successful. And along the way, I learned some key lessons.
Lesson #1 Additional software and other “bells and whistles” didn’t make me more successful.
When I made the decision to learn Forex, I studied the various tools available and opted to purchase trading software in addition to my broker’s trading station. Of course, this was when I thought it was much easier to learn to trade Forex than I had anticipated. It turns out that the additional software was not necessary at all to successfully trade Forex.
All trading software (even trading platforms) I’ve seen are lagging indicators. None of them are crystal balls. When used effectively and properly understood, these indicators can be powerful tools.
You don’t need anything else for your trading except a trading station and perhaps broker-provided price alarms. Most of the software comes with very relevant technical indicators already built in. It makes no sense (and perhaps harmful) to go off on a tangent and buy any additional commercial software.
This additional software, which is promoted to be more successful, will likely confuse you and distract you from understanding the software you already have and the market you are trying to learn. It will be counterproductive to your success… so don’t do it. Learning the market, some economics basics, and the software you already have is hard enough without the added confusion, discouragement, loss of hope, and trust that comes from outside software resources.
Lesson #2 Learning and mastering Forex is not easy. It takes commitment, determination and a willingness to help others.
When I started trading, I lost over USD $60,000.00 in three months. I was upset? Of course I was.
However, the fact is that I was my own worst enemy. I was the one who didn’t take the time. I was the one who didn’t delve into the study properly and I was the one who thought this would be a ticket to Easy Street. In fact, I was the one who was wrong because I didn’t do what I tell everyone to do.
I pondered this for some time; What had he done wrong? Why were there so many successful traders who were consistently making money? Were they smarter than me? No they didn’t go. What they were was more patient and persistent than me. Most did not have the capital that I had when they began to learn. Most of them didn’t even have this extra software, and if they did, they didn’t try to reinvent the wheel like I did, adding technologies and all kinds of things that make it a total quagmire.
However, they succeeded where I didn’t. I was lacking in training, and like many other people, I was prone to thinking it must be harder than this, so I made it harder. I became my own worst enemy. He was lost and needed help.
From that day on I decided that I would conquer this and get through it no matter what I had to do. I would not trade real money until I knew I was going to be successful. I was on a mission to defeat the beast within me that was making me a loser in trading when I was a winner in everything else I had done.
Along the way I studied and with all that I studied and mastered, I helped newcomers on various trade boards. That’s what led me to set up the 4xSuperLights board. I studied night and day. I dove into learning how to trade successfully.
Lesson #3 Even day traders and scalpers need to know how to trade for the long term.
This brings me to a topic that is very close to my heart: day traders and scalpers.
It is no coincidence that day traders and scalpers are the first to give up on Forex markets and give up on the idea of becoming consistent and successful traders.
There is nothing wrong with day trading or scalping, mind you. Some can be very successful at it. If you are successful at scalping and have not learned long-term and positional trading, then there is no doubt that you will not be successful for long. Your ‘luck’ will run out sooner or later.
Resale is fine. Day trading is fine. However, you cannot be successful in this style of trading without a thorough understanding of how to trade for bigger profits and how to stay in a trade for 3 days, two weeks or even a month or 6 months or more.
That is why experienced traders do not remove small minute charts. It is an exercise in futility. Why scalp 10 pips here and there and spend hours doing it when one can pull massive pips out of the market and have free time to do other things?
Professional traders don’t bust the Forex markets by 10 or 20 pips. It is considered suicidal to do so UNLESS one can trade and stay in a trade successfully for days, weeks and months and has a comprehensive understanding of the “trend” in which they are trading.
There are many trends. Trends are very much in the eye of the beholder. Your trading trend can be hourly, daily, weekly, monthly or yearly. You have to know all of these trends before you can decide which one you are currently trading and which style of trader your lifestyle dictates.
If you are not aware of all the trends, a stronger trend can easily go unnoticed by you, like a tsunami and wipe you out of your trade. It is very common for traders to enter what they consider to be a trend on a smaller chart and then get wiped out with losses almost immediately. What they considered a trend was simply a retracement of a larger time frame. Once the pullback was over, the stronger trend clicked back, ending your trade and taking your money.
Lesson #4 Practice patience and mental focus…and know when not to trade.
For all of you who are struggling and getting nowhere please be patient with your trading, be sure to keep in mind that you need to have mental focus when trading along with an understanding of your own emotions and knowing when those emotions are bad for you. your trading, thus knowing when not to trade due to external pressures and circumstances in your life that will distract you from being prepared, focused and mentally strong at the trading station.
Also, learn your trade not from small minute charts. Learn to trade from the monthly to the weekly to the daily charts and so on. Please never, ever ignore these graphics. They are your saviors. They will tell you everything you need to know, but you need to study them so your mind is not in a small frame. You have to think in the big frame before you can think in the small frame. That’s absolutely key with a capital ‘K’.
Summary: The best advice I’ve ever received.
A few years ago I was struggling as many of you are when I made a lucky connection with a professional trader in Europe. I guess I was in a mode where I wanted to stop trading and start learning what the experts were doing. This man’s name was Nicolai and luckily he spoke excellent English, he was a nice guy and took some time with me.
I will never in my life forget the lesson I learned from him that day in our short conversation. What he told me in a few words was essentially the key to my success and the main secret that all successful traders follow.
Nic told me that the reason 99% of new traders give up is simply this: ” Failure to see the big picture” .
Now I pass the baton to all of you. It’s the least I can do for anyone who is hurting and reeling and losing hope. I received that very special gift from a perfect stranger in one fell swoop. Now I’m giving you the gift too.
