Over Two Years Trading and Nothing But Losses
May 29, 2009
A member of my mailing list – from New Zealand, I believe – wrote in to express his frustration as to the path his trading is taking. I offer it up because I’m sure it is something which others are going through as well.
hi john u once asked if i had any questions about trading—-how do u make money-im just starting my 3rd year, i still have lots to learn-actually im learning maybe i should give up and leave my money in the bank, 2 or 3 % is better than minus 80 % or worse– 2 months ago i joined e toro fx trading– ive already blown my real money a/c, fortunately they have a practice a/c which im also doing a great job of tanking out, i have tried everything but cant beat the system– like a chess computer every move i make has an opposite reaction, yesterday i started hedging the same trade ie buy usd/cad ,hedged with sell usd/cad hoping to catch moves both ways but still things still went haywire, sometimes the whole screen can be red but never all green sometimes i canhave two trades the same, one can be up the other down- how is that- also trades can go to the stop loss in the red but very seldom go past green 30 % and you need every trade to go past 15% to cover spread costs-anyway so much for my dream of dumping my day job– can u help– thanks –allan
My general impression from Allan’s note is that of someone without a clear idea of how to take on the market – no real trading plan. I say this because he hasn’t presented any information at all about trading timeframes or methods or decision-making aside from evidence that he’s trading forex. I’ve I’m incorrect in that view then I hope Allan will clarify. Until then I will offer up some suggestions based on my current suspicions.
Build the Foundation
When I wrote The Essentials of Trading, and when I developed the introductory trading course by that same name my focus was on helping new traders build a strong, solid foundation from which they could go on with a much better chance of success. The core of the book and course is one’s Trading Plan. That’s the full expression of how one will take on the markets in terms of time frames, and risks, and methods, and all that.
I’m not just talking about trading systems here. I’m talking about everything that goes into your trading – or at least should be going into your trading. If you are just getting into trading, or have been involved for a while but just can’t seem to get a handle on things, I really strongly recommend you read the book and/or go through the course. If you take it seriously and do with the recommended homework exercises along the way, it will help you develop a really solid framework for your trading. You’ll then be much better positioned to know what kind of trading techniques will make sense for you and thus will be way more effective in your ongoing study and research.
Live vs. Demo Trading
Allan mentions losing money not only in his live account, but also in the demo one too. I’ve written on the subject of live trading vs. demo trading a few times before (Live Trading Performance Not Matching Demo Trading Success, Am I Ready to Trade Live?), and I’m all for getting into the live action early on. That said, however, if you’re not making money in your demo trading account, you probably don’t have much business risking real money with the same methodology.
Is trading for me?
Of course there is the question of whether trading really is the right thing for you. Let’s face it. Not everyone is cut out for the demands of trading, in one fashion or another, or at one time or another. There’s a lot involved in successful trading. If you don’t have the time need to trade the way you’re best suited, or are going at it with the wrong mindset (like get rich quick), or have a lot of external distractions, then it’s probably better to steer clear, at least for the timebeing.
Struggling with support & resistance and knowing what the key market levels are? Check out the Price Distribution Analysis methods I use.
John,
Someone from my neck-of-the-woods. What part of NZ is the chap from?
jog on
duc
duc – Alas, I don’t know. My guess was based on a .nz email address. Perhaps Allan will offer up that info.
John,
Ok, I’ll check back.
jog on
duc
John,
I should add that there is in Auckland, and other locations these guy’s….
http://www.stanz.co.nz/
I attend once-in-a-while. They are ok, but for this chap they might be a good starting point.
jog on
duc
duc – Thanks for that. Now I know who to hang out with when I finally get to Kiwi-land.