Had a rare opportunity to sit down and listen to a professional Futures trader talking about what he does in his everyday trades. Pretty interesting stuff, and he sure did light up a few light bulbs in my head.
I am going to take a break from FOREX trading for a while, and re-strategize my approach. No, I'm not going into Futures, but a lot of the stuff that he talked about is applicable to most financial markets. After all, a chart is a chart is a chart.........only the title is different.
Showing posts with label General. Show all posts
Showing posts with label General. Show all posts
Sunday, May 23, 2010
Thursday, April 15, 2010
You're Just Gambling, Dude!
That's what an Englishman told me at a popular hiking trail, after I've told him what I do for a living.
No matter how I tried to explain that trading is just like any other business, he wouldn't budge from his opinion.
Was I surprised by his conviction? That trading is just another form of gambling?
No, because he's not the first one who had blurted that out to me.
And he surely won't be the last one either.
Obviously I don't agree with his view, and here's why....
Yes, there is a risk of financial loss in trading.
Yes, you have no idea how your trade will turn out whenever you put in your order, simply because we're not 100% sure of what the outcome is gonna be.
It could turn out to be a winner, or a loser. Who knows?
So yes, there IS a gambling component on EACH individual trade, even after we've taken the trouble of analyzing our setups before taking that "high-probability" trade (in your opinion, that is).
Just like a flip of a coin, no?
But what if I tell you that if I can find a coin where it would land on its head 65% of the time (this is because of the way the coin was minted, making one side a bit heavier).......which side would you bet on?
If it's just over ONE coin toss, it would STILL be gambling (because we're not 100% sure)
If it's over say, 1000 coin flips, well.....now it gets interesting.
It's VERY LIKELY that the coin would land on its head MORE TIMES, don't you think so? Would you still consider this as gambling, now that you know that you're likely going to win, over a SERIES of coin tosses (instead of a single coin toss)?
Now that coin becomes YOUR EDGE, should you decide to "gamble" using it! Over the long run you'll win more than you lose, unless you lose that coin!
It's the same with trading - we need to find OUR edge. All great traders have their own edge.
Unfortunately, this edge is not easy to get. Requires lots of hard work to develop it.
And you hear talking heads saying that trading is so easy, that even a 6-year old can do it?
Go figure!
No matter how I tried to explain that trading is just like any other business, he wouldn't budge from his opinion.
Was I surprised by his conviction? That trading is just another form of gambling?
No, because he's not the first one who had blurted that out to me.
And he surely won't be the last one either.
Obviously I don't agree with his view, and here's why....
Yes, there is a risk of financial loss in trading.
Yes, you have no idea how your trade will turn out whenever you put in your order, simply because we're not 100% sure of what the outcome is gonna be.
It could turn out to be a winner, or a loser. Who knows?
So yes, there IS a gambling component on EACH individual trade, even after we've taken the trouble of analyzing our setups before taking that "high-probability" trade (in your opinion, that is).
Just like a flip of a coin, no?
But what if I tell you that if I can find a coin where it would land on its head 65% of the time (this is because of the way the coin was minted, making one side a bit heavier).......which side would you bet on?
If it's just over ONE coin toss, it would STILL be gambling (because we're not 100% sure)
If it's over say, 1000 coin flips, well.....now it gets interesting.
It's VERY LIKELY that the coin would land on its head MORE TIMES, don't you think so? Would you still consider this as gambling, now that you know that you're likely going to win, over a SERIES of coin tosses (instead of a single coin toss)?
Now that coin becomes YOUR EDGE, should you decide to "gamble" using it! Over the long run you'll win more than you lose, unless you lose that coin!
It's the same with trading - we need to find OUR edge. All great traders have their own edge.
Unfortunately, this edge is not easy to get. Requires lots of hard work to develop it.
And you hear talking heads saying that trading is so easy, that even a 6-year old can do it?
Go figure!
Monday, April 12, 2010
Gaps
Man, how often do you see gaps happening on such a hugely liquid market such as FOREX? Well, that's exactly what took place on several currency pairs this week.
I must confess, I don't know how to play them - so I simply stay away from 'em. I just prefer to trade using stuffs that I'm already familiar with.
Really, for a while I thought I was looking at stock charts instead of FOREX, with all these gaps popping all over the place.
Speaking of stocks, I am now going to be paying more attention to this market, specifically NYSE & NASDAQ. Will post some stuff on this over at my stocks blog, when I have something interesting to say.
Until then, stay tuned for the next coming attraction.
OK, rant over.
I must confess, I don't know how to play them - so I simply stay away from 'em. I just prefer to trade using stuffs that I'm already familiar with.
Really, for a while I thought I was looking at stock charts instead of FOREX, with all these gaps popping all over the place.
Speaking of stocks, I am now going to be paying more attention to this market, specifically NYSE & NASDAQ. Will post some stuff on this over at my stocks blog, when I have something interesting to say.
Until then, stay tuned for the next coming attraction.
OK, rant over.
Sunday, March 21, 2010
Life of a Trader
When I first started to trade, I did like what almost everyone......buy some books, paid good money to attend trading seminars, surf forums, you know...the works. I did all these in order to copy some of the stuff that work (or seem to work) for these guys.
In other words, what I was trying to do was to shorten the learning curve. I wanted to be able to make money as soon as I had checked out of the hotel that I was in, after the trading seminar had ended.......
........which, of course, did not happen, as you probably have guessed! I found out the hard way that there is MORE to trading, than simply aping what the other guys are doing in their trades.
Many moons later, I began to REFINE & FINE-TUNE all the stuff that I've learnt, and mold it into a sort of personalized system or style that I'm comfortable with. At this stage, I now start to trade less frequent than what I used to do (even on intraday basis).
In other words, I tend to wait until all the elements come together (sorta waiting for all the planets to line up), before hitting the buy or sell button.
Getting from "copy & paste" to "defining my own trading style" phase does take quite a considerable amount of time, but it's well worth the effort.
Why?
Because when you reach this stage, you really don't care about other people's opinion about the setup. You've seen the pattern before during your extensive backtestings and screen time, and you know that this is a high probability trade setup.
OK, rant over. Back to trading!
In other words, what I was trying to do was to shorten the learning curve. I wanted to be able to make money as soon as I had checked out of the hotel that I was in, after the trading seminar had ended.......
........which, of course, did not happen, as you probably have guessed! I found out the hard way that there is MORE to trading, than simply aping what the other guys are doing in their trades.
Many moons later, I began to REFINE & FINE-TUNE all the stuff that I've learnt, and mold it into a sort of personalized system or style that I'm comfortable with. At this stage, I now start to trade less frequent than what I used to do (even on intraday basis).
In other words, I tend to wait until all the elements come together (sorta waiting for all the planets to line up), before hitting the buy or sell button.
Getting from "copy & paste" to "defining my own trading style" phase does take quite a considerable amount of time, but it's well worth the effort.
Why?
Because when you reach this stage, you really don't care about other people's opinion about the setup. You've seen the pattern before during your extensive backtestings and screen time, and you know that this is a high probability trade setup.
OK, rant over. Back to trading!
Monday, December 21, 2009
Merry Christmas and a Happy New Year, folks!
We're now heading towards X'mas & a brand new year! Many of the traders around the world are winding down their trading activities, and it's pretty obvious if you look at the charts - which are pretty much choppy these days.
I will also step away from FOREX trading for the time being, at least until the end of the month. It makes little sense to be in the market when all the big boys are in the holiday mood.
This would be a good time to catch up on other things that I've left on the backburner before. Besides the ubiquitous New Year resolutions that are always forgotten the moment we head into the 2nd week of January (I know, I'm guilty of that as well!), it may also be a good time for me to see if I want to also include US Stocks as part of my trading activities.
I have not looked at stocks trading for quite some time ever since I traded FOREX live. One of the reasons why I like FOREX is because of the huge volatility on a scale that you don't see very often in the stocks market.
Still, markets are markets. It doesn't hurt to be looking at other markets for trading opportunities. As the Chinese saying goes, opportunities can come in ANY directions........and certainly not just from FOREX! Maybe this time I will take another look and see if I can trade both instruments together, as part of my overall trading activities. I still have a few cents left over in my brokerage account where I used to trade US stocks before.......might as well put them to some use.
OK folks, enjoy your holidays!
I will also step away from FOREX trading for the time being, at least until the end of the month. It makes little sense to be in the market when all the big boys are in the holiday mood.
This would be a good time to catch up on other things that I've left on the backburner before. Besides the ubiquitous New Year resolutions that are always forgotten the moment we head into the 2nd week of January (I know, I'm guilty of that as well!), it may also be a good time for me to see if I want to also include US Stocks as part of my trading activities.
I have not looked at stocks trading for quite some time ever since I traded FOREX live. One of the reasons why I like FOREX is because of the huge volatility on a scale that you don't see very often in the stocks market.
Still, markets are markets. It doesn't hurt to be looking at other markets for trading opportunities. As the Chinese saying goes, opportunities can come in ANY directions........and certainly not just from FOREX! Maybe this time I will take another look and see if I can trade both instruments together, as part of my overall trading activities. I still have a few cents left over in my brokerage account where I used to trade US stocks before.......might as well put them to some use.
OK folks, enjoy your holidays!
Wednesday, December 9, 2009
Bruce Lee
Who doesn't know him - arguably one of the greatest martial artists that have walked on this earth.
Besides his skills & strengths, he also had a couple of famous quotes that still resonate with me, even after he has been long gone.
Here are some of those that I like:
“I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.”
"Be like water making its way through cracks. Do not be assertive, but adjust to the object, and you shall find a way round or through it. If nothing within you stays rigid, outward things will disclose themselves."
Besides his skills & strengths, he also had a couple of famous quotes that still resonate with me, even after he has been long gone.
Here are some of those that I like:
“I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.”
"Be like water making its way through cracks. Do not be assertive, but adjust to the object, and you shall find a way round or through it. If nothing within you stays rigid, outward things will disclose themselves."
"Empty your mind, be formless. Shapeless, like water. If you put water into a cup, it becomes the cup. You put water into a bottle and it becomes the bottle. You put it in a teapot it becomes the teapot. Now, water can flow or it can crash. Be water my friend."
Strange as it may seem, I do find that the above quotes CAN BE applied to trading as well.
Instead of trying to learn 10,000 different trading styles all at once, why not just pick one or two and become REAL good at them, before moving on to another trading system? Hell, maybe you just need that one or two trading approaches to make a living, no?
And if the trading style is adaptable to whatever the market condition dishes out at you, so much the better!
Just like water, my friend!
Certainly something to chew upon, since I could not find any trading setup today (that's why I'm ranting now, which is not something that I normally do....)
Sunday, November 15, 2009
24 Hr Trading, Anyone?
One of the reason why I switched to FOREX (I was trading US stocks before this) is due to the time flexibility that the FOREX market offers.
Ot to put it in another way, I could trade ANYTIME I want, because the FOREX market runs 24 hours a day, 5 1/2 days a week.
Cool, no?
Well, not quite.
While it's true that you can pretty much trade at anytime of the day (or night), I quickly learnt that in order to have a fair success win rates, you cannot simply trade whenever you feel like it....
....especially if you're an intraday trader!
Whenever I take intraday trades, there are a lot more things that I need to consider, before pulling the trigger.
Firstly, I avoid trading during the Asian session. I like trading 'em during the Euro session.
Secondly, I need to know when the key news announcements are going to take place, as these can (and do) rock the market like a tsunami.
Also, intraday trades are more prone to fail, so I need to be picky about trade selection, as well as all the other potential roadblocks that may derail the price movement.
Sounds like a lot of work?
Yep. Frankly, the easiest ones to trade are the Daily setups.
On the Dailies, I don't care about the news, and I pretty much don't care the time of the day when the trade is to be taken.
Ot to put it in another way, I could trade ANYTIME I want, because the FOREX market runs 24 hours a day, 5 1/2 days a week.
Cool, no?
Well, not quite.
While it's true that you can pretty much trade at anytime of the day (or night), I quickly learnt that in order to have a fair success win rates, you cannot simply trade whenever you feel like it....
....especially if you're an intraday trader!
Whenever I take intraday trades, there are a lot more things that I need to consider, before pulling the trigger.
Firstly, I avoid trading during the Asian session. I like trading 'em during the Euro session.
Secondly, I need to know when the key news announcements are going to take place, as these can (and do) rock the market like a tsunami.
Also, intraday trades are more prone to fail, so I need to be picky about trade selection, as well as all the other potential roadblocks that may derail the price movement.
Sounds like a lot of work?
Yep. Frankly, the easiest ones to trade are the Daily setups.
On the Dailies, I don't care about the news, and I pretty much don't care the time of the day when the trade is to be taken.
Sunday, November 1, 2009
I'm back!
It's been 3 weeks since I last place a trade. The reason for this mini sabbatical was due to being stuck in "lab" mode - spending endless hours learning/researching/fine-tuning my overall trading plans.
I have found that whenever I'm in this mode, it's best to stop trading altogether so that I can fully focus on the stuff that I need to do in order to further improve my trading game.
Well, I'm now out of my lab cave and am now ready to trade the market again. However, the market today is pretty dull......
......and dull market means NO TRADE, as there's simply no momentum for me to ride on.
There's also plenty of news this week, so I need to keep an eye on them as well. Don't want to be caught in a FOREX Tsunami that could very well occur during these times.
Looking at the intra-day charts, I don't quite see anything that would warrant any interest. The European traders are just not making any waves today after the London Open.
Methinks I'm just gonna call it a day. Let's see how tomorrow shapes up.
I have found that whenever I'm in this mode, it's best to stop trading altogether so that I can fully focus on the stuff that I need to do in order to further improve my trading game.
Well, I'm now out of my lab cave and am now ready to trade the market again. However, the market today is pretty dull......
......and dull market means NO TRADE, as there's simply no momentum for me to ride on.
There's also plenty of news this week, so I need to keep an eye on them as well. Don't want to be caught in a FOREX Tsunami that could very well occur during these times.
Looking at the intra-day charts, I don't quite see anything that would warrant any interest. The European traders are just not making any waves today after the London Open.
Methinks I'm just gonna call it a day. Let's see how tomorrow shapes up.
Friday, October 2, 2009
Big News Day
I am primarily a technical trader. However, that does not mean that I ignore news completely.
For instance, I will not put in any orders today. Reason is because of the impending Non-Farm Payrol (NFP) news this evening.
This particular news event can certainly cause a lot of upheaval (I refrain from using the word "earthquake" or "tsunami", out of respect to those who have suffered such calamity recently in Padang, Indonesia and Samoa) in the financial markets.
So for now I'm gonna be sitting on my hands and just see what happens, once the NFP results are released in a few hours time.
For instance, I will not put in any orders today. Reason is because of the impending Non-Farm Payrol (NFP) news this evening.
This particular news event can certainly cause a lot of upheaval (I refrain from using the word "earthquake" or "tsunami", out of respect to those who have suffered such calamity recently in Padang, Indonesia and Samoa) in the financial markets.
So for now I'm gonna be sitting on my hands and just see what happens, once the NFP results are released in a few hours time.
Thursday, September 24, 2009
Where to, Oil?
Oil just broke thru the 65 dollar mark to the downside. This will no doubt, spook all the Canadian crosses.
Will Oil hit the 60 mark? Time will tell.
Sunday, August 23, 2009
Wise Words
"Although the cheetah is the fastest animal in the
world and can catch any animal on the plains, it will wait until it is
absolutely sure it can catch its prey. It may hide in the bush for a
week, waiting for just the right moment. It will wait for a baby
antelope, and not just any baby antelope, preferably one that is sick
or lame. Only then, when there is no chance it can lose its prey, does
it attack. That, to me, is the epitome of professional trading".
Mark Weinstein from Market Wizards, Jack D Schwager.
Being picky is what I strive to do everytime I take on new trades. Admittedly, I am still not very good at this aspect yet, but I'm working on this.
Thursday, August 20, 2009
Signing off for the week
It's Friday, and that makes it a good day for reflection.
Why am I talking about "reflection", suddenly?
Simple.
I had a pretty good run recently with my trend line trades.
So I believe I may be on to something here.......
Hell, in fact I believe I could tweak my trend line method and make it even better........
Of course I need to do some research and backtesting.
Time to head back to my cave and spend some screen time.
Why am I talking about "reflection", suddenly?
Simple.
I had a pretty good run recently with my trend line trades.
So I believe I may be on to something here.......
Hell, in fact I believe I could tweak my trend line method and make it even better........
Of course I need to do some research and backtesting.
Time to head back to my cave and spend some screen time.
Wednesday, August 19, 2009
Heading into lower time frames
At this stage of my trading activities, I am now slowly getting into hourly charts. I am finding more trading opportunities in this timeframe, especially when I trade based on trendlines.
I can see myself using more 1hr & 4 hr charts, and less of Daily. Which is probably a natural thing to do, as I evolve more as a trader.
I have also started looking (just looking, not trading any of them yet) at Stocks. The reason is pretty obvious - I want to expand my trading portfolio.
I must admit though........I find stocks less interesting than FOREX at the moment.
I can see myself using more 1hr & 4 hr charts, and less of Daily. Which is probably a natural thing to do, as I evolve more as a trader.
I have also started looking (just looking, not trading any of them yet) at Stocks. The reason is pretty obvious - I want to expand my trading portfolio.
I must admit though........I find stocks less interesting than FOREX at the moment.
Thursday, July 2, 2009
NFP
Now I know why the NFP is today rather than the usual 1st Friday of a new month. The reason is because tomorrow is the US Independance day, it's a public holiday for the folks over there.
That means it's likely gonna be a slow day tomorrow.
Here's something that I saw in the local paper today that caught my interest. Good to stretch your brain a bit, every once in a while, no?
"Aoccdrnig to a rseearch sduty at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoatnt tihng is taht the frist and lsat ltteer be in the rghit pclae. The rset can be a toatl mses and you can sitll raed it wouthit porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe."
Well, it wasn't that hard, was it? Now let's get back to trading!
That means it's likely gonna be a slow day tomorrow.
Here's something that I saw in the local paper today that caught my interest. Good to stretch your brain a bit, every once in a while, no?
"Aoccdrnig to a rseearch sduty at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoatnt tihng is taht the frist and lsat ltteer be in the rghit pclae. The rset can be a toatl mses and you can sitll raed it wouthit porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe."
Well, it wasn't that hard, was it? Now let's get back to trading!
Wednesday, July 1, 2009
Big News Day
Not much action today on all the pairs that I'm watching. Probably because of the looming NFP news later in the evening.
The NFP used to be on the 1st Friday of a new month. Don't know why it's on Thursday this time around.
Because of this, I probably won't enter any new trades today.
The NFP used to be on the 1st Friday of a new month. Don't know why it's on Thursday this time around.
Because of this, I probably won't enter any new trades today.
Monday, June 29, 2009
Averaging Down
Mutual funds/unit trust folks love to average down their positions. The thinking is that you can make money when the investment that the're holding would finally tuns up and go in their favor.
This approach is most popular during the doom-and-gloom times, like the times we are now.
I don't believe in this strategy, simply because it is based on HOPE that price would eventually turn up.
Look. nobody in this world can tell me where the price would be at in the future, or even in the next 5 minutes.
Sorry, but I would rather lose money at the amount that I'm comfortable with, rather than watching small losses snowballing into a huge account buster!
Averaging down can be quite similar to a sinking ship deliberately taking in more water.
This approach is most popular during the doom-and-gloom times, like the times we are now.
I don't believe in this strategy, simply because it is based on HOPE that price would eventually turn up.
Look. nobody in this world can tell me where the price would be at in the future, or even in the next 5 minutes.
Sorry, but I would rather lose money at the amount that I'm comfortable with, rather than watching small losses snowballing into a huge account buster!
Averaging down can be quite similar to a sinking ship deliberately taking in more water.
News Trading
Many of my friends trade based on news. This is not surprising, as news can definitely move price in a huge, huge way.
There is a lot of money that can be make, if you make the right call.
I must confess....I am not good at news trading, as I am basically a technical analysis guy.
All my backtestings were done based solely on what price had done in the past.
That said, I do take note on Interest Rate news, as well as Non-Farm Payroll announcements.....I would not want to enter my trades during these times, as the market can be quite crazy during these times.
Also, the spread can be quite big - so I see no reason why I should enter any new trades during these volatile times.
This is not to say that one cannot profit from news play - it's just that I personally do not employ this strategy in my trades.
I am basically quite content trading with just the price action at important support & resistance areas.
There is a lot of money that can be make, if you make the right call.
I must confess....I am not good at news trading, as I am basically a technical analysis guy.
All my backtestings were done based solely on what price had done in the past.
That said, I do take note on Interest Rate news, as well as Non-Farm Payroll announcements.....I would not want to enter my trades during these times, as the market can be quite crazy during these times.
Also, the spread can be quite big - so I see no reason why I should enter any new trades during these volatile times.
This is not to say that one cannot profit from news play - it's just that I personally do not employ this strategy in my trades.
I am basically quite content trading with just the price action at important support & resistance areas.
Less can sometimes be MORE!
I fully subscribe to the "less is more" concept when I go about my trading activities. For instance, I like my charts to be clean and uncluttered. I like to make my decisions based on pure and unadulterated price actions.
I also do not believe that more trading activities equal more to more profits. Hell, more trading can often mean more losses!
I am more towards having LESS trades as a result of being a little bit EXTRA PICKY in my trades. Yeah, I'm one of those who would wait for the planets to align to each other before firing my trading gun.
This, of course, means that my trading activities is about as exciting as watching paint dry. Or fishing (OK, no flames please - I know there are a lot of you lurkers who are rabid fishing fans).
It also means that I have to constantly keep my emotions in check, whenever I see questionable trade setups take off like scared rabbits.
I also do not believe that more trading activities equal more to more profits. Hell, more trading can often mean more losses!
I am more towards having LESS trades as a result of being a little bit EXTRA PICKY in my trades. Yeah, I'm one of those who would wait for the planets to align to each other before firing my trading gun.
This, of course, means that my trading activities is about as exciting as watching paint dry. Or fishing (OK, no flames please - I know there are a lot of you lurkers who are rabid fishing fans).
It also means that I have to constantly keep my emotions in check, whenever I see questionable trade setups take off like scared rabbits.
Monday, June 22, 2009
Losing Your Job
I recently bumped into an old friend whom I have not met for 15 years. After the usual exchange of pleasantries, the guy told me that he, along with the rest of his collegues, are going to be laid off in a month time. He's also not quite sure what he's going to do after this.....
....and he asked whether FOREX trading can be the savior!
It pains me whenever I hear stories like this. However, I worry EVEN MORE when people put high hopes on FOREX as their potential lifeline.
As I've explained before, you cannot expect FOREX (or any other business venture for that matter) to provide sustainable income within a short period of time.
This is a skill-based business, so it takes time to acquire the necessary skills in order to do well in this business. For instance, you need to be able to make decisions based on the information that you see on the charts. Acquiring this skill takes time.
Fortunately, FOREX trading is so widespread that you can try it out without risking a dime! Most online FOREX brokers offer FREE demo accounts with FREE charting software (usually Metatrader 4, which I use for chart analysis).
This way, you can apply what you learn and trade with fake money. There is no need for you to risk real money while you hone your skills.
Look, if you cannot make money using demo account, chances are you will not do so with your real money as well!
Now, after your stint with the demo a/c's, you may also discover that you're just not cut out for FOREX!
Is that a bad thing?
No, and it's good that you find out about this early on. FOREX is NOT for everyone.
Most importantly, FOREX is NOT a get-rich-quick scheme!
....and he asked whether FOREX trading can be the savior!
It pains me whenever I hear stories like this. However, I worry EVEN MORE when people put high hopes on FOREX as their potential lifeline.
As I've explained before, you cannot expect FOREX (or any other business venture for that matter) to provide sustainable income within a short period of time.
This is a skill-based business, so it takes time to acquire the necessary skills in order to do well in this business. For instance, you need to be able to make decisions based on the information that you see on the charts. Acquiring this skill takes time.
Fortunately, FOREX trading is so widespread that you can try it out without risking a dime! Most online FOREX brokers offer FREE demo accounts with FREE charting software (usually Metatrader 4, which I use for chart analysis).
This way, you can apply what you learn and trade with fake money. There is no need for you to risk real money while you hone your skills.
Look, if you cannot make money using demo account, chances are you will not do so with your real money as well!
Now, after your stint with the demo a/c's, you may also discover that you're just not cut out for FOREX!
Is that a bad thing?
No, and it's good that you find out about this early on. FOREX is NOT for everyone.
Most importantly, FOREX is NOT a get-rich-quick scheme!
There's absolutely no need to receive margin calls, ever!
Time and again I hear folks getting margin calls. This usually happens to new traders, although there could be exceptions as well :-)
The reasons are plenty, but probably the most common would be due to NOT using stop loss, or incorrect way to use it.
Almost all brokers allow traders to enter stop loss order, so why not use it?
Again, this comes down to proper use of money management.
If proper money management is used, it's almost impossible to get margin calls.
That being the case, why do we still hear descent folks blowing their accounts in this manner?
Not treating trading as a business could probably be one of the reasons. When you treat it like a business, you would have a trading plan as well, just like having a business plan.
The other would be not giving FOREX trading the respect that it deserves (you know, treating it like a "hobby".....).
This is a TOUGH business with a HIGH failure rate, so due diligence is required.
Just like in any other business.
The reasons are plenty, but probably the most common would be due to NOT using stop loss, or incorrect way to use it.
Almost all brokers allow traders to enter stop loss order, so why not use it?
Again, this comes down to proper use of money management.
If proper money management is used, it's almost impossible to get margin calls.
That being the case, why do we still hear descent folks blowing their accounts in this manner?
Not treating trading as a business could probably be one of the reasons. When you treat it like a business, you would have a trading plan as well, just like having a business plan.
The other would be not giving FOREX trading the respect that it deserves (you know, treating it like a "hobby".....).
This is a TOUGH business with a HIGH failure rate, so due diligence is required.
Just like in any other business.
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