Home Trading Strategies Forex Trading: 4 Things I Wish I Knew When I Started Trading

Forex Trading: 4 Things I Wish I Knew When I Started Trading

Forex Trading: 4 Things I Wish I Knew When I Started Trading

hey hey what’s up my friend so in this video I want to share with you the biggest mistakes that I’ve made in my trading career so you don’t have to make it right so you don’t have to you know spend countless hours money right on all this a mistakes that I’ve made so profit from my experience profit from my misery profit right from my mistakes so that’s what you’ll discover in today’s video so first thing first right if this is the first time you’re watching my video right hit the thumbs up button and the subscribe button below this way whenever I publish a new video you’ll never miss it again okay so go do it right now just see the thumbs up button and subscribe to my youtube channel below the link is all below alright have you done it then let’s get started so the first mistake let me share it with you right so when I got started in trading right there the reason why I got started in trading because I know that I don’t work for somebody out there I wanted to be in control of myself my destiny right I don’t want to be no answer to anybody I don’t get involved with politics I don’t want someone to limit and say hey Raina you can only make X amount each month because you’re worth this much I don’t want any of that so that was the main reason right why according to trading because it offers you know endless possibilities out there so that was my why and when I got started in trading no one taught me or tell me you know how to go about it so naturally the most common sense approach their head is in order to explore what’s out there I read books blogs websites everything and anything that I can get my hands on right I would have you know devour you know studied stuff like you know harmonic trading price action trading trend following indicators make the RSI Bollinger Bands pivot points whatever your name in right I would have probably no tried it as well and therein lies my mistake my problem is that whenever I come across something new well there’s nothing new in trading out there but whenever I come across something new at least new to me right I would try and treat that you know particular strategy or technique okay so you know to treat rates might be price action trading the next two three traits is Chuck patterns the next two three traits is maybe harmonic patterns a niche few traits is maybe indicators and you can see that I was simply right hopping from one trading strategy today to the mix and can we see what’s wrong with this the problem with this is that my actions my trading actions they are inconsistent and when you are inconsistent in your trading actions what happens well you get an inconsistent set of results it’s a no-brainer right if you try many different things at one time your results is going to be many different directions okay so that was the takeaway ahead is that no man I can’t keep doing this you know forever because I’m gonna get you know inconsistent set of results because my actions were not consistent all right so the key takeaway is that you know if you want to be a consistent trader you must have a consistent set of actions there’s no guarantee that you will consistently make money because if your actions right or your strategy doesn’t have an edge in the markets you will lose consistently but but you now know you know right what is not working and then you can make fine refinement and tweaks right to the strategy and then improve on it and make it profitable but if you are inconsistent in your actions you’re all over the place there’s no way you can make any refinements or improvements to your strategy and that is key okay so there’s the first mistake I mean I was you know hopping from one trading strategy to the Knicks end inconsistent actions inconsistent results mistake number two so as mentioned right I I wanted you know getting involved in trading and my my plan right this plan I had instead you know I am gonna take up all my savings that I had borrow some money from my parents right and then fund my trading and come with $50,000 in trading capital my 50k and I figured you know if I make forty percent a year don’t ask me how I came up with forty percent was just a number that I pluck up from somewhere from here and I figure I know 40% of 50k that’s about a 20k are you $20,000 I can live with $20,000 a year I’m single I was available I had no commitments no liabilities right hey twenty thousand dollars a year enough for me so that was my plan and uh along the way I kind of realize that forty percent hey it’s actually pretty done good rule I don’t see you know many traders out there making forty percent a year consistently and then I realized that you know if I could do this for five years after five years I realized that I would still be back at square one right because I make 50k let’s say forty percent of fifty thousand dollars is twenty thousand dollars spending in my living expenses you know and whatnot okay so that means that every year whatever that I mean right I spend it and I’m back to square one fifty thousand dollars which is my original amount so this we write even if I were to trade on five years or ten years this amount will not grow and my standard of living will not improve and then I ask myself what is wrong and that’s when I realize okay I had the wrong expectations about trading it’s not that 40 percent a year is no good it’s pretty dang good is really really good but when you’re trading right the business of trading is that you need money to make money in this business I mean sure you can make higher percent a year consistently but if you only only if I heard dollars at or another’s that’s not enough right to survive okay so in creating you need to make you need money to make money in this business so that was my second mistake I did not have this expectations I thought I can take a small amount of money like you know few hundred a few thousand tens of millions along the way because you know that’s what I read in books stories on news or know how those traders magically did it right turning a small pot of money into a know millions of dollars so I just didn’t have that right expectations to start with right so the key thing is that you know you need money to make money in this business and this let’s let me write to the tech mistake okay the top mistake is this is that is that I I taught that you know hey you know if you want to be a trader you must be a full-time trader that’s where you make the most amount of money right full-time trading or I shot them trading scalping that’s how we make the most amount of money and I kind of realize that that’s not really true okay let me explain why so that’s it for example right you are a full-time trader maybe you’re trading off the shorter term timeframes all right five minutes 15 minutes whatever and let’s say right because you are trading off the the lower timeframe you have more opportunities and you can do you know on average let’s say 40 percent a year again let’s assume on a $50,000 trading account so that’s like what 20k right a year so since you’re doing this full-time you don’t have any other source of income the full 20,000 is used to spend on your on yourself right maybe you don’t pay for your food living expenses what not if you’ve a family then there’ll be pretty difficult to survive on but let’s say you’re single you’re available right you do have any commitments then hey twenty thousand dollars might make sense so at the end of the year right you made our twenty thousand dollars but you withdraw again – to any cables for your living expenses and in your bag – fifty thousand dollars the mix here okay the mixture in the next year yeah always back to square one fifty thousand dollars but now let’s say for example you don’t do this full-time maybe you do this part-time maybe you trade off the higher time frames like the 400 or a daily time frame where you don’t have to be no glue to your monitor all the time you can even have a part-time job you can ever even a full-time job even if you want let’s say you go with this second approach right where you create part-time and because you trade off the higher time frames right your returns your percentage returns right are not that great so you do about say 20 percent a year which is pretty much you know half right of this are someone who’s trading full-time but then because you are doing this part-time you have another side gig maybe a full-time job or whatever you can actually no and extra funds your trading account every year maybe you say if you know an additional $500 a month all right and use that money to fund your trading account to you know to trade larger and that’s about you know six thousand dollars a year in extra that you can fund to your trading account okay and on top of it right because you are having a full-time job elsewhere you don’t have to touch the money in your trading and some debt money inside you can let it grow and grow and grow okay so given this this numbers okay you you know you make 20% on a year on a 50k account and you add in about six thousand dollars every year to that trading account how much would you mean you know let’s say at the end of 20 years I’m sure you you have you’re able to live for the next 20 years the trade the next 20 years and putting these numbers in right this is the amount of money that you can potentially make I wouldn’t want used what potentially right because there’s no such thing as guarantee in trading so principal amount 50k over here additional $6,000 a year 20 years to grow with a 20% let’s say a no return each year at the end of the twenty year period you’re looking at 3.

2 million three point two six million that’s I think that’s something that you can pretty much retire on okay so can you see now how part I’m trading in full-time trading it doesn’t mean a full-time trading you can definitely make more because the fact that you need to pull out funds from your account right it kind of no we mix the compounding more difficult compared to someone who can trade it part-time grow their calm adding more funds right they can actually make pretty decent or large amount of you know money right within a within a decent period of time twenty years right this is not a get rich quick scheme right this is a get rich slow scheme so you can see that you know Pat I’m trading it doesn’t mean that you know it’s a it’s a doesn’t mean that it’s for you know people who are new lousy or whatever no it’s a it’s a viable approach right to actually grow your wealth over time so you can actually you know grow cereals wealth even if you’re trading part-time right so this is something that uh I’m in a mistake right all you have to treat full-time to you know me a ton of money but know right creating part time creating of the higher time frames it is possible right to grow your wealth steadily as well okay and finally mistake number four okay I wanna share this with you so this is a important okay and the I’ll just dive in and tell you what does this mistake straightaway is this is that I focused on the strategy and not the concept so this might seem foreign to you right so let me explain so what is concept right so if you have you know seen my videos right or you see my comments right you know often traders will ask me here you know what is the best moving average out there hey right now you know what is the best timeframe to train and I’m we see that you know hey there is no such thing as best out there you need to find something that you know suits you right you need to focus on the concept the concept that I’m teaching in the videos and not be specific you know parameters moving average or indicators focus on the concept so concept could be something like trend following trend following is a trading concept is a trading methodology okay and trend following the key idea behind it is that it’s very simple you trade many markets right a wide variety of markets you drill your stop-loss in the hopes of riding a train okay and if the the market right doesn’t go in your favor you just you know cut the loss that’s pretty much the key concept of trend fall trait many markets right in a trend and you know risk small bet small on each trip that is the key concept of trend following I haven’t talked about a strategy yet because we have not discussed about what is the exact entry parameter well what is the trailing stop loss that you’re gonna use what is your risk management I’ve I’m not talking to the exact details of that because what’s important is the concept so let me know just share an example with you let’s say for example you are I’m gonna you know test a trading concept right and I’m gonna trade these markets this 20 markets over here right go a couple civil palladium platinum right then you have the indices SMB if you roll yen euro dollar Mexican peso British Pound right all this market saw writes about 20 markets in total okay and the so called strategy that I’m going to use is this right I’ll go along when the price close the hires over the last 200 days okay so basically with them the price makes the highest close over the last 200 days I buy simple I will use the 380 R as my trailing stop loss so for those of you who are not sure what this means is that let’s say for example this is that price breaks out highest close over the last 200 days I buy all right let’s call it B all right so what I’ll do is that I’ll have a trailing stop loss all right so how this stop loss is derived is that what you’ll do is you pull out the ATR indicator stands for every true range and you will tell you right what is the volatility of the market right the historical volatility of the market and let’s say the value is let’s say X okay so what you’ll do is you just multiply X by 3 right let’s call it 3 X okay so what you do is let’s say you buy at a price of $300 okay your trailing stop loss would be $100 minus 3x right let’s see the value is y so Y would be your trailing stop loss so as the price moves in your favor from her dollars it moves up to $150 right this value of x right which is the ATR value it will move along the way so what you do is it you just then you just adjust it accordingly right so $150 minus 3x are and this now this Y is your new trailing stop loss value okay so you can use a a trailing stop loss to to write the train you can even use moving average I guess there are many ways to do it the point is that in this example we are using a 3/8 ER as our trailing stop loss and now we risk 1% on each tree ok so the opposite is just for the shot rules which is this so here are the results right and I want to share with you based on this simple set of rules this simple concept called trend-following so this in this case we use a tree ATR ok so I’m just gonna pull out and share the numbers with you so this is the backtest thing that I’ve done on that portfolio of markets with the exact trading rules so 200 a breakup with a 380 our trailing stop loss you can see that over the last 18 years right this is how the system is performing right on a on a each year the results over here ok the study here on your results and this is individual month right how each strategy has performed like 2,000 June is down 0.

1% 2002 lights up 4.1 percent ok and a no-return about ten point four four percent right with about drawdown of about twenty four point six percent so now this point of time right many traders do they like to us hey Rena why did you go with 200 a breakout is that the the most profitable alright so you can see that you know that question focus on the strategy itself the exact tactics and parameters it doesn’t focus on a concept and I can tell you that the 200-day break up there’s nothing magical about it I can do 50 day one hundred eight hundred forty nine hundred seventy-five the strategy will still be profitable okay we don’t believe me this is a 50-day break up again with a 50-day breakup six eighty are right I changed the trailing stop loss I trade I change the the break-up parameters again again this is the results over the last 18 years you can see over here generally still profitable a no return down deep to 8.

85% okay with the maximum drawdown of fourteen point nine percent written deep slightly drawdown maximum drawdown deep as well you can see right that that’s really no nothing magical about the the the break-up number of breakup dates that we treat all the trailing stop loss I can change this to a two hundred a breakup with a 680 are okay these are the results still profitable in the long run a no return 8% a year with about 11 percent maximum drawdown so you can see that generally this strategy no matter how you change it you change where there’s a 200 a breakout with us a 50 B breakout 380 or 680 are the concept works ok this strategy this concept it works in the long run so this is why I tell traders don’t focus on the exact parameters that’s not important what’s important is the trading concept that you are trading because if your concept is wrong to start with right no matter how you tweak you improve you edit you modify your parameters all right 200 a breakup become a 210 220 day breakup it doesn’t matter it’s not gonna work the concept is important you must be trading write a correct trading concept to start with your trading concept must have an edge in a market so in this case it’s trend-following if you don’t train following there I know traders who trade mean reversion that works as well but again that concept must be you know correct to start with right so often traders they look at it backwards define the best parameter is the best moving average the best time to trade a breaker the best trailing stop loss the back basic exit but the concept is wrong everything you know the house the house of cuts collapse okay so this is a mistake I mean as well right I focus on a strategy and not the concept behind the trading strategy okay so I hope that kind of you know hammers home the point that I was trying to make so let’s do a quick recap right to to what you’ve learned today number one right you must have a consistent set of actions to have a consistent set of results number two you need money to make money in trading know me like me right you know naively thinking I can take a small amount of money make 40 percent a year and just survive on whatever I mean alright you need money to make money in trading the more trading capital that you have right the more money you can potentially make okay you can grow serious welfare even if you are trading hard time as ice illustrator the example earlier and finally right focus on the concept not the trading parameters not on the number of break up days the moving average the Bollinger Band the RSI the best parameters the best number no that is not important I mean it’s important to a certain degree but not as important as the trading concept that you’re treating okay my friend does it make sense okay so now but we have come towards the end of this video if you learn more about my trading strategies the techniques the approach that I used to trader markets what I want you to do is to go down to my website over here trading with Rainer calm just scroll down a little bit right and depending on your needs right if you want to learn how to write massive trends in the market like for example we spoke about trend following briefly earlier earlier and you want to learn more about it then go and download this our ultimate trend following guide just click this orange button and I’ll send it to your email address for free or perhaps are your more fee price action trader you understand how to read market structure support resistance identifying you know a volatility contraction I didn’t find you know break out trades candlestick patterns and stuff like that then go and download the ultimate guide to price action trading where you learn how to be no better time your entries and exits right when trading the markets again click this orange button and I’ll send it to your email address for free alright so that’s it I’ve come towards the end of this video if you’ve enjoyed it hit the thumbs up button and subscribe to my youtube channel anything back questions leave it below right and I’ll do my best to help but that’s it I wish you good luck and good trading I’ll talk to you soon you


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