I have been trading for quite some time now and even though it has not always been a good ride, I learnt a lot in my 7 years of trading Forex. In this article, I will share with you 3 things I have learnt.
1. Your trading system MUST suit your personality
This one is really important. I have tried pretty much everything in Forex trading ; EA's, copy trading, scalping, swing trading, etc. I bought various trading courses and again, nothing seemed to work for me. I was so tired looking for the holy grail until one day something struck my head. One night I was watching football on tv and when I saw the players on the pitch I realised that not all footballers are the same. They have their own strengths and weaknesses! When they are on the pitch, they always show their strengths while at the same time try to exploit their opponent's weakness.
I realised that if I ever want to be successful in the game of forex trading, then I must play my own game. There's no point forcing yourself to be a day trader when you know you are not good at it, or forcing yourself to do swing trading when you know you are good at day trading! You need to find which type of trader you are and find a system that can support your situation/personality. I know that I am good with Daily and 4h chart and I can wait days for the market to move so I decided to just trade with daily and 4h chart, and really STICK TO IT. The rest is history.
Conclusion : be yourself. If you are a short term trader, be good at short term trading. If you are more of a swing trader, then be good at swing trading. DO NOT FORCE YOURSELF TO BE THE TYPE OF TRADER YOU ARE NOT.
2. Forex trading is a marathon, not a sprint
What is the difference between a marathon and a sprint? Well, a marathon is way longer than a sprint. The same applies to Forex trading...
I am sure the reason why people trade Forex is because they want to make money, consistently, forever. The key take away here is CONSISTENTLY and FOREVER which means you need to 'survive' as long as possible to see the reward. The problem here is traders do not like waiting. They want it quick. Instant.
Becoming a good trader takes time. You need to learn technical analysis, build trading experience and master the psychological part of trading. You need to 'survive' long enough to see whether you are a profitable trader or not : be like marathon runners. To become a good marathon runner, what do you need? You need to have good stamina so you will be able to finish the marathon. Like running a marathon, you need to have a lot of stamina (in this case risk management skill) to survive in the game. If you do not have good risk management skills, you will not finish the race instead you will blow your account.
Conclusion : it is paramount to have good risk management when it comes to Forex trading. The goal is not making quick bucks, but to survive as long as possible. Build wealth slowly and steadily.
3. Trading is boring
If your trading is not boring, chances are you are not doing it right...
Here is the thing. I have been talking a lot about consistency and when it comes to being consistent in trading, means you are doing the same thing over and over again. Looking for the same trading setup, same pattern. To be honest with you, for me trading is kinda boring.
It is not boring when you change you trading system every day. You always have a new toy to play with so you won't get bored. Here is the catch : a new toy means spending more money = new trading system costs you money. I've stuck with my old toy for years now and instead of costing me more money, my old toy gives me more money. Stick with what you have!
Conclusion : Consistency is the key. It means you need to do the exact same thing over and over again even tough it is repetitive and boring. But to make more money? I don't mind being bored...
So those are 3 things I have learned from trading. The journey is long and hard but if we are committed and focused, we will get there. Good luck.
Rico Ferdinand Yapotra