Trading for living

[peteuk]

Rock bottom, destitute, and desperate....well ok, that's a slight exaggeration, but it's nearly true. I think you reach a certain point when you say enough is enough, either you can do it or you can't, and one needs to be honest with oneself. I'll share a bit of my trading history in a minute....put away anything sharp, it makes depressive reading!

Thanks for condensing my post, I blame my longwinded replies on endless hours of listening to my wife who has made an art out of 'why say in one sentence what can be said in ten'!

I can't really suggest any books I'm afraid, I read everything I could find to read on the internet and that was enough to start with, although I wish I had got a few books now, it could have saved me a lot of time and money. In hindsight I didn't so much need help with the practical, but more with the psychological side of trading. The book you're reading certainly sounds interesting, although I don't totally agree with the edge philosophy, not for a day trader like me. Insider knowledge would be nice for trading shares, but for forex I don't believe there is very much inside info, unless you have access to inter-bank dealers who know where all the big orders are. The tricks marketmakers get up to are fairly well publicised, and with everything being totally automated on the trading platform it doesn't leave any room for dealer '(in)discretion'. Having said that, maybe I am living in blissful ignorance and there is in fact a way 'into' the forex markets. If anyone knows of one please email me (stuffed plain brown envelope awaits!)

(lol, just read the 'credible until proven not'!)

Mind-set and conditioning the mind to act in a certain way is difficult, and in some cases impossible, hence the majority who lose. I don't think there are many strategies that don't work, it's the way they are implemented by the trader that lets them down.

After a couple of succesful months paper trading on a demo account I started live trading with a very positive attitude, fully equipped with the knowledge to place trades, a complete understanding of the indicators to show me which side of the market I should be on, an account with $20,000 that I could afford to lose (the disclaimer said only trade with money you can afford to lose, who are they kidding!), and a will to succeed....it wasn't enough.

In the first week I made over $2000, money for nothing, easy. In the next 2 months I lost $12,000. I'd had to spend hours and hours a day in front of a damn computer tearing my hair out and having palpitations, and it had cost me $12,000...what a loser, what an idiot! Undeterred and a glutton for punishment I plodded on, trying different strategies, different pairs, different sessions, following other peoples trades, losing a lot, gaining a little. I couldn't understand why I couldn't make any money. I had traded succesfully on a demo, what was the difference, in the first week of live trading I had made $2000, what was happening, what was I doing any differently, what the hell was going on.... until, demoralised, dejected, despondant, and nearly divorced (every cloud!) and nearly $16,500 poorer......

One day I sat in front of the computer and after unsurprisingly losing yet another trade I suddenly fell in, it wasn't anyone else's fault but my own, there was no conspiracy to part me from my money, there really were people making money at this game and I had to anylise why it wasn't me. I couldn't continue to blame my indicators or just bad luck, it was time to be honest with myself. Was I perhaps too stupid? Too greedy? Too stubborn? Was I really cut out to be a trader? Could I really manage to do this or was it just beyond my ability? If the idea of unbounded wealth through successful trading was just a pipe dream then now was the time to wake up before I wasted any more money and time, to hell with my bruised ego and dreams of wealth, not to mention the $16,500! Dismissing as inconceivable the idea that I was stupid, and I certainly wasn't greedy (chance would be a fine thing), stubborn nooo, hmmm....

Then I read an article similar to this one. It mentioned discipline. What? What was discipline to do with trading, that's rubbish? Ok, hang on a minute, you've tried every strategy, every indicator, every pair, more or less every connotation of trading known to man and you've managed to succesfully lose $16,500, maybe this isn't rubbish after all, at the very least it deserves a try before I hang up my mouse and take up polynesian basket weaving in a mental institution for burnt out ex wannabe forex traders.

Discipline....discipline to trade the plan...the rest is history. During the next few months I gingerly traded 50k and actually made some money, I still made mistakes and had to remind myself 'trade the plan', it kind of proved a point and I'd laugh and say to myself 'well what did you expect, you did your own thing and lost'. Over the following months I increased my trade size, the more I gained the more I regained my confidence and....well...here I am typing drivel claiming that forex trading hasn't affected my mental stability...what else can I say!

Ooops, nearly missed the 'which pair'....USD/CHF like you say is less $ value/loss per pip, EUR/USD less spread, GBP/USD is a typical female, unpredictable and moody, USD/JPY...no thank you! Whichever pair it doesn't really matter much, they can all produce a good return provided you have........discipline.

Cheers
Pete

[forex1]

Hi Pete

Thanks for sharing a brilliant story - brilliant because you made it in the end! It's amazing how similar it sounds to my experience in trading and I thought I was the only one. You are 1000% correct - it all comes down to discipline, but the problem is that in normal life one can get by without being terribly disciplined - however, in trading the ill disciplined is punished mercilessly! So when I talk to non-traders about having a problem with discipline they look at me funny - like how can any mature, fairly normal person have a problem with discipline...

Even though it appears that you've worked things out quite nicely by now, I think you will really enjoy "Trading in the Zone" by Mark Douglas.

All the best - and next week we're going to hit that 23/27 trade on the swissy big time!

[csaunders]

Yup have to agree - Thanks Pete - captivating reading - a novelist could always prove as a backup. You know for all those hours of time you are not actually trading and being disciplined!

Seriously - I have learnt - and I enjoy doing exactly that.

Will chat again - read my colllusion proposal in the 23/27 thread. I was thinking even of a name - Secret Society for Orchestrated Movements - SOCOM - quite close to "soc em" (sock it to them)? OK I'm losing it...

Cheers and may the pips find you.

[kurmoo]

Hi Pete,

Your story is very inspiring (at least it has inspired me). I am pretty new to forex and have been trading for about a month on demo account. Last week I made about 3000USD in one day on Monday, then 1000USD more on the following day and then lost not only that but half of my initial capital too! I started a new account on Wednesday and made about 5OOOUSD by Friday morning and lost all of it by Friady evening because I wanted to close trading with 7000USD profit (greed is a curse!). I had almost started thinking that it's just like gambling but now I am very enthusiastic to know about your story, and I think I am going to discipline myself from tomorrow (does everyone who can't discipline himself say this?).

Regards,
Kurmoo

[Neurosinner]

heh, just to tell my story.

i started learning about forex from the beginning of this year. i manage a little chain of exchange offices in Croatia, so it's natural that i need to get some insight in the forex.

and of course, after a couple of months, i thought this could be an interesting way of earning some aditional money for my pockets. so, activated a couple of demo accounts and lost all my demo money in about 2 months time. which was ok, since i wanted to see how it is to trade, not to do some serious trading...

so, at august 18th i decided i'd go serious, open a demo and think of it as real money. i figured that by taking about 10 pips per day would be enough to make some decent money, and i wanted to test that idea. also, some ideas that keeping the profit run up was not a bad idea...i'd let the profit rise to 10 pips, and then put a stop loss order that would make a 5 pip profit...and keep it oging up, as long as i felt good about it.

in that way, and thanks to the bearish sentiment on EURUSD, i managed to get a whooping 67% in about 3 weeks. i started with $64.500, and was at $108.000 at September 8th.

and then i begun to think of me as THE man...i new something was strange, that something was going to happen...

sure it did...

EURUSD at 1.0825? hah, it's a retrace..i'll buy some USD...and who needs stop loss orders?...woke up next day and i was $20.000 short!

to cut the story, now i'm around -16% of the initial amount, and starting to earn some money, after passing through a "am-i-that-stupid?" phase...

the idea is to see what will i do until the end of the year, if i'm on a decent plus (around 10%) i'll stick some $$$ in...

and let you hear the cryes of terror...

[peteuk]

EURUSD at 1.0825? hah, it's a retrace..i'll buy some USD

lol, I am sure you were not alone!

kurmoo and Neurosinner, thanks for posting your experiences, I hope it works out well for both of you.

Pete

[russeller]

great story neuro ... and one thats shared by many I'm sure ..... are you just sort of ..' chasing the market ?' ... or are you trading a plan ? ..... just curious .....

[csaunders]

Well to add a shortened version of my FX trading life to thus far. Started off with the absolute minimum $3K with GFT 2 years back. Also started out with excellent confidence - I had been demo trading for 2 months - making a pretty decent return and felt that I had been careful enough. After all the demo trading had been going well - all I had to do was follow my strategy which in hindsight was pretty flimsy (what was I thinking??)

My first trade was GBPUSD - promptly lost $200 of my precious capital - GULP. This was enough to collapse all previous confidence into a pool of doubt. From there I managed to manage my losses - only gradually losing although with admirable consistency all the way down to $2K. I used to have periods of extreme anger - either when I missed out on a move or traded irrationally. Meantime a colleague of mine was literally coining it - made $25K days before the Euro was introduced - gee what an opportnuity that was, and there I was clubbing golf balls less than perfectly at a driving range... aargh!

Thanks to my wife which actually encourgaged me to continue I forged forth - after giving serious consideration to pulling the plug. I devised a plan and stuck to it - come hell or high water. I would sometimes trade once a month- other times 3 times a day. Using the approach I have done exceptionally well - it's like Pete says discipline and sticking to the rules.

Don't simply because you've switched on your PC make a trade - opportunities do come along but not necessarily in your window of opportunity to trade.

Currently still part-time trading(which is all the tougher) although when my returns justify the leap I'll do so without hesitation - beats any 9-5.

Let's hear some more stories... makes for interesting reading.
Cheers