Sorry for the title name, I just wanted to catch some attention
I love forex and have since my father first introduced it to me 2 years ago. I started off w/ the Peter Bain system package, which was a very good basis to gain some knowledge of how the market trends and certain things to look out for, along with just general forex info. I then went through a live mini account that i put only 500 dollars in... took me less than a month to blow that all. This was probably the best thing that could of happened to me tho because it made me take a break from forex and concentrate on school. I then started to research more and more, reading books online, articles, lots of forum posts, books, etc. Just to see what really counts towards being CONSISTENTLY profitable in forex.
In all my research (which i continue to do since the market is always changing) many things "clicked" for me and i realized how many things i was doing wrong which explained exactly why i blew out my 500 dollar account in a couple weeks.
Main reasons why i was trading completely the wrong way:
1) $500 ISN'T EVEN ENOUGH CAPITAL FOR A MICRO ACCOUNT. For a mini account ($1 a pip) you will need about $6,000 to $10,000 in capital to make sure you have room to be able to withstand your losses. For a standard account ($10 a pip) you will need about 10 times that amount (its alot of money lol, i dont plan to be trading a standard account for a long time).
2) You should only ever trade less than 3% of [/font]ur[font="] full account size on every trade (I heard this 100's of times but never paid attention to it). When i was using my live $500 account, i would lose over 100 bucks in a single trade (thats 20% of my account in 1 trade!! meaning i could only withstand 5 losses for my account to be gone!!)
3) MONEY MANAGEMENT- calculate your risk-to-return ratio, your real leverage (never want to use more than 20:1 (as apposed to 400:1 i used on my live account lol)), your win loss ratio is also important. Basically this was the biggest lesson i ever IGNORED in my forex research. The reason why it is so important is because it makes u stop looking for a holy grail system and start thinking in probabilities! Thinking in probabilities is something you can control, knowing where the market will go next is something you CANNOT control (biggest mistake of most traders, including myself). The market is UNIQUE at every moment - Mark Douglass (Trading In The Zone).
4) Stop looking for systems!!!!!!!! Find one that works for you, SET RULES WITH IT THAT ARE CONSISTENT WITH EVERY TRADE and GET SUCCESS OUT OF IT! Adjust it accordingly to the market, but STICK TO THE RULES always. The system i have been using has found me success but it wont work for everyone because of the psychological factor which comes in that makes ppl bend the rules
STICK TO YOUR RULES AND MONEY MANAGEMENT and in the LONG RUN YOUR PROFITS WILL SHOW (because in the short run you will lose trades and you will win trades, the key is to keep the losses lower and let the profitable trades run)
5) TRAILING STOPS! they are gods gift to forex traders. First off, one of the greatest things ive learnt is using multiple lots to capture my profits, then when i have the amount of profits im looking for i will move my stoplosses to breakeven- this is amazing what it will do for u psychologically because now half of the battle (fear of losing money) is gone and your only worry is finding the best time to exit the trade. NOTE: Only use multiple lots when u first open the trade just like i do in my trades in my journal (this is the reason why you will need a good amount of startup capital), do not open the trade with 1 lot then if u feel like the markets going ur way open another one (search for "Tail of Two Blinks" on this forum you will find a guy's ("Twoblink") thread that is his e-book and on the second page it explains averaging up/down this will give u the reasoning on why i added this NOTE.
There are other factors involved in finding success and believe me i am no guru at forex. But i just wanted to share my experience with you.
If you are new to forex, then this is something you would definitely benefit from learning EARLY, u can learn from my mistakes
Even if you feel like you have experience in the forex world, if you do not have this knowledge, it could take your trading to the next level.
I want to be able to live by the philosophy of "do something you love doing and you will never work a day in your life".
Forex is my passion and my goal is to become a professional trader. While my roommates play video games, i stare at charts all day lol... theyve gotten used to it.
For reference, out of all the books and articles i have read, the ones that benefited me that most and will teach you everything i have just explained are:
1) {link removed, see rule #2} - amazing website, make sure u concentrate on the money management part and leverage (they explain why its the number #1 killer in forex)
2)Trading in the Zone, by Mark Douglass - i recently read this book and it was really nice to read because it showed me that just about everything i was doing in my new strategy (technically and emotionally) was on target! The book talks about the physchology of trading which for most ppl is the deciding factor of being able to do it or not (i was mentally all over the place letting my emotions get to me in my 500 dollar account and that turned out to be my downfall). Mark Douglass gathered his information from analyzing extremely consistently profitable traders and not so profitable traders (the other 95% lol).
3)Tail of two blinks as i explained before, i cant believe this information is free!
Here is my Trading journal on forexfactory, definitely worth taking a look at it to see how the risk/money management works especially. It is not perfect by any means, but I have been able to achieve consistent profits, which was my initial goal in starting the journal:
http://www.forexfactory.com/showthre...178#post251178
I love forex and have since my father first introduced it to me 2 years ago. I started off w/ the Peter Bain system package, which was a very good basis to gain some knowledge of how the market trends and certain things to look out for, along with just general forex info. I then went through a live mini account that i put only 500 dollars in... took me less than a month to blow that all. This was probably the best thing that could of happened to me tho because it made me take a break from forex and concentrate on school. I then started to research more and more, reading books online, articles, lots of forum posts, books, etc. Just to see what really counts towards being CONSISTENTLY profitable in forex.
In all my research (which i continue to do since the market is always changing) many things "clicked" for me and i realized how many things i was doing wrong which explained exactly why i blew out my 500 dollar account in a couple weeks.
Main reasons why i was trading completely the wrong way:
1) $500 ISN'T EVEN ENOUGH CAPITAL FOR A MICRO ACCOUNT. For a mini account ($1 a pip) you will need about $6,000 to $10,000 in capital to make sure you have room to be able to withstand your losses. For a standard account ($10 a pip) you will need about 10 times that amount (its alot of money lol, i dont plan to be trading a standard account for a long time).
2) You should only ever trade less than 3% of [/font]ur[font="] full account size on every trade (I heard this 100's of times but never paid attention to it). When i was using my live $500 account, i would lose over 100 bucks in a single trade (thats 20% of my account in 1 trade!! meaning i could only withstand 5 losses for my account to be gone!!)
3) MONEY MANAGEMENT- calculate your risk-to-return ratio, your real leverage (never want to use more than 20:1 (as apposed to 400:1 i used on my live account lol)), your win loss ratio is also important. Basically this was the biggest lesson i ever IGNORED in my forex research. The reason why it is so important is because it makes u stop looking for a holy grail system and start thinking in probabilities! Thinking in probabilities is something you can control, knowing where the market will go next is something you CANNOT control (biggest mistake of most traders, including myself). The market is UNIQUE at every moment - Mark Douglass (Trading In The Zone).
4) Stop looking for systems!!!!!!!! Find one that works for you, SET RULES WITH IT THAT ARE CONSISTENT WITH EVERY TRADE and GET SUCCESS OUT OF IT! Adjust it accordingly to the market, but STICK TO THE RULES always. The system i have been using has found me success but it wont work for everyone because of the psychological factor which comes in that makes ppl bend the rules
STICK TO YOUR RULES AND MONEY MANAGEMENT and in the LONG RUN YOUR PROFITS WILL SHOW (because in the short run you will lose trades and you will win trades, the key is to keep the losses lower and let the profitable trades run)
5) TRAILING STOPS! they are gods gift to forex traders. First off, one of the greatest things ive learnt is using multiple lots to capture my profits, then when i have the amount of profits im looking for i will move my stoplosses to breakeven- this is amazing what it will do for u psychologically because now half of the battle (fear of losing money) is gone and your only worry is finding the best time to exit the trade. NOTE: Only use multiple lots when u first open the trade just like i do in my trades in my journal (this is the reason why you will need a good amount of startup capital), do not open the trade with 1 lot then if u feel like the markets going ur way open another one (search for "Tail of Two Blinks" on this forum you will find a guy's ("Twoblink") thread that is his e-book and on the second page it explains averaging up/down this will give u the reasoning on why i added this NOTE.
There are other factors involved in finding success and believe me i am no guru at forex. But i just wanted to share my experience with you.
If you are new to forex, then this is something you would definitely benefit from learning EARLY, u can learn from my mistakes
Even if you feel like you have experience in the forex world, if you do not have this knowledge, it could take your trading to the next level.
I want to be able to live by the philosophy of "do something you love doing and you will never work a day in your life".
Forex is my passion and my goal is to become a professional trader. While my roommates play video games, i stare at charts all day lol... theyve gotten used to it.
For reference, out of all the books and articles i have read, the ones that benefited me that most and will teach you everything i have just explained are:
1) {link removed, see rule #2} - amazing website, make sure u concentrate on the money management part and leverage (they explain why its the number #1 killer in forex)
2)Trading in the Zone, by Mark Douglass - i recently read this book and it was really nice to read because it showed me that just about everything i was doing in my new strategy (technically and emotionally) was on target! The book talks about the physchology of trading which for most ppl is the deciding factor of being able to do it or not (i was mentally all over the place letting my emotions get to me in my 500 dollar account and that turned out to be my downfall). Mark Douglass gathered his information from analyzing extremely consistently profitable traders and not so profitable traders (the other 95% lol).
3)Tail of two blinks as i explained before, i cant believe this information is free!
Here is my Trading journal on forexfactory, definitely worth taking a look at it to see how the risk/money management works especially. It is not perfect by any means, but I have been able to achieve consistent profits, which was my initial goal in starting the journal:
http://www.forexfactory.com/showthre...178#post251178