I trade the Forex markets professionally. I’ve been very successful at it. But it didn’t start out that way. In fact, initially I wasn’t successful at all. I was forced to re-evaluate my entire methodology and what I thought I knew.
But it paid off. After a period of re-evaluation, and study, I became very successful. And along the way, I learned some key lessons.
Lesson #1 Extra software and other “bells and whistles” didn’t make me more successful.
When I made the decision to learn the Forex, I studied the various tools available and chose to purchase trading software in addition to my broker’s trading station. Of course this was back when I thought that it was a lot easier to learn to trade the Forex than I had anticipated. As it turns out, the extra software was not necessary at all to successfully trading the Forex.
All trading software programs (even trading platforms) that I have seen are lagging indicators. None of them are crystal balls. When used effectively and understood properly, these indicators can be powerful tools.
You do not need anything else for your trading except a trading station and perhaps price alarms that are supplied by the broker. Most software comes with very pertinent technical indicators already built in. It is pointless (and perhaps detrimental) to go off on tangents and purchase any additional trading software.
This extra software, which is touted to make you more successful, will likely confuse you and sidetrack you from understanding the software you already have and the market you are attempting to learn. It will be counter-productive to your success…so don’t do it. Learning the market, some basics of economics and the software you already have is difficult enough without the extra confusion, discouragement, lost hope and confidence brought on by outside software resources.
Lesson # 2 Learning and mastering the Forex is not easy. It takes commitment, determination and a willingness to assist others.
When I first started trading, I lost over USD $60,000.00 in three months. Was I upset? Of course I was.
However, the fact remains that I was my own worst enemy. I was the one who did not take the time. I was the one who did not delve into the study properly and I was the one who thought this would be a ticket to Easy Street. Indeed, I was the one who was wrong because I did not do what I am telling you all to do.
I pondered this for some time; what had I done wrong? Why was it that there were so many successful traders who made money on a consistent basis? Were they just smarter than me? No they were not. What they were was more patient and more persistent than me. Most did not have the capital I had when they began to learn. Most of them did not even have this additional software and if they did, they did not go out and try to re-invent the wheel like I did by adding in techs and all sorts of things that make a total quagmire out of it.
Yet they succeeded where I did not. I lacked the training and I was, like many other people prone to thinking that it must be harder than this and so I made it harder. I became my own worst enemy. I was lost and needed help.
From that day forward I decided that I would conquer this and I would get through this no matter what I had to do. I would not trade real money until I knew that I was going to succeed. I was on a mission to defeat the beast inside of me who was making me a loser at trading when I was a winner at everything else I’d ever done.
Along the way I studied and with everything that I studied and mastered, I helped out the newcomers on various trading boards. That is what led me to establishing the 4xSuperLights board. I studied night and day. I immersed myself in learning how to trade successfully.
Lesson #3 Even day traders and scalpers must know how to trade long term.
This brings me to a topic that is near and dear to my heart: day traders and scalpers.
It is no coincidence that day traders and scalpers are the first ones to give up on the Forex markets and give up on ever having the idea of becoming consistent, successful traders.
There is nothing wrong with day trading or scalping mind you. Some can be very successful at it. If you are succeeding at scalping and have not learned to trade long term and positional trading then there is no doubt at all that you will not succeed for long. Your ‘luck’ will run out sooner or later.
Scalping is fine. Day trading is fine. However you cannot succeed at this style of trading without a thorough knowledge of how to trade for the bigger gain and of how to stay in a trade for 3 days, two weeks or even a month or 6 months or longer.
That is why seasoned traders do not scalp the small minute charts. It is an exercise in futility. Why would one scalp 10 pips here and there and spend hours doing so when one can take massive pips out of the market and have leisure time to do other things?
Professional traders do not scalp the Forex Markets for 10 or 20 pips. It is considered to be suicidal to do so UNLESS one can trade and stay in a trade successfully for days, weeks and months and have a comprehensive understanding of the ‘trend’ one is trading in.
There are many trends. Trends are very much in the eye of the beholder. Your trading trend can be the hourly, the daily, the weekly, the monthly or the yearly. You have to know all of these trends before you can sort out which one you are currently trading and what style of trader your lifestyle dictates that you should be.
If you are not aware of all of the trends, a stronger trend can easily come by totally unnoticed by you, like a Tsunami and wipe you out of your trade. It’s all too common for traders to enter what they consider to be a trend on a smaller chart, then get knocked out at a loss almost immediately. What they considered to be a trend was simply a retracement off a bigger time frame. Once the retracement ended, the stronger trend clicked back in, ending their trade and taking their money.
Lesson #4 Practice patience and mental focus…and know when not to trade.
For all of you out there who are struggling and who are not getting anywhere, please be patient with your trading, please make sure that you take into consideration 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 your trading, thereby knowing when you should not be trading due to outside pressures and circumstances in your life that will distract you from being prepared, focused and mentally tough at the trading station.
In addition, learn your trading not from the small minute charts. Learn your trading from the monthly charts down to the weekly and the daily and so on. Please, never, ever ignore these charts. They are your saviors. They will tell you everything you need to know but you need to study them so that 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 is absolutely Key with capital ‘K’.
Summary: The best advice I ever received.
Some years ago I was struggling like many of you are struggling when I made a lucky connection with a professional trader in Europe. I suppose that 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 fortunately, he spoke excellent English, was a sympathetic guy and took some time with me.
I will never in my life forget the lesson I learned from him on that day in our short conversation. What he told me in a few short words was essentially the key to my success and the main secret that all traders who are successful follow.
Nic told me that the reason why 99% of new traders give up was simply this: ” Failure to see The Big Picture” .
Now I am passing the baton to all of you. It is the least I can do for anyone who is suffering and staggering along and about to give up hope. I was given that one very special gift by a one time perfect stranger. Now I am giving you the gift as well.
Source by Jeff B Langin