[Rhody Trader]

Originally Posted by stuckinNY

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Anyway I apologize for that long-winded introduction, here are some questions:

1) My biggest obstacle right now is my own self-doubt. I go through manic phases - one minute I'll feel like I'm totally grasping Forex and I have no doubt in my ability to apply what I've been learning to succeed in Forex. The next minute, I'll convince myself that I just don't have the sheer intelligence to succeed in this field. That's my biggest problem. I am willing to work very hard for this but if I just don't have the innate abilities/intelligence to succeed in this field, what does it matter?

There are huge psychological elements involved in trading. Overcoming them is one of the first big hurdles new traders can face. The more time you spend watching and trading the markets (think demo account), the more those doubts should fade. A high IQ is not a prerequisite to successful trading. A good work ethic and discipline can come in quite handy, though.

2) Software recommendations anyone? I don't have any training in programming so forget that...I've been reading about backtesting and demo testing and I assume there is a software program you guys are using? I would like to backtest some systems but let's be honest here folks, I don't know the first thing about programming.

If you can use Excel you can back-test. There are, of course, a number of software packages, but you can do quite well with Excel.

3) How much start-up capital is actually needed here to make money on Forex? Obviously I could open a mini-account today with $300...but I read a post somewhere in this forum where some guy claimed you need $300,000 capital to make $50,000 a year on Forex. Wow, I'll be lucky to have that much free capital to put on Forex 20 years from now. And simple math tells me that with a $300 account, I could only hope to make $50 in my first year? I'm planning on opening a mini-account, maybe in the fall depending on my learning curve - but $500 is about the most I can realistically afford to lose on Forex right now.

A $50 return on a $300 account is less than a 20% return. I think most forex traders would call that very modest. The reason it's such an attractive market is that triple digit annual returns are possible. It all comes down to the amount of risk you take and the method/system you develop. Obviously, though, it takes money to make money. It would take one heck of a system to make $30,000 a year on a $300 starting account.

4) Systems...specifically - how do I make one? Technical Analysis appeals to me moreso than Fundamental simply because it isn't subject to my own bias/emotions. I don't have a background in engineering or programming so this may be a bit more difficult for me. I've noticed most people vehemently recommend developing your own system rather than adopting somebody else's. I have no troubles with this - but would it at least make sense to use somebody else's system as a base to work from?

A trading system is simply a set of rules by which you trade, including entry and exit strategies and money management. There are plenty of trading systems out there, including a great many in these various threads. You can start there to get ideas, but there is much educational value in developing your own. Also, you are more likely to stick with a system you have put a lot of work into testing and confirming. Programming and/or advanced math isn't necessarily a requirement.