Beginners - Kill your emotions

xgavinc posted:

mlawson71 posted:

Hero76 posted:

That's a very good point, actually. Some people make a big profit a few times on demo account and think they're ready for a live account without having achieved being consistent in their profits, and that only leads to losses.

yes you’re right but that's how hunger for money and greed works. a lot of people choosing forex do not think about a lot of work such as study, experiment, creation of your own strategy, study your own financial instinct or nerves and so much more, they mostly guided by a sense of fast money and implications that go beyond this. But they do not think about time-requiring education

Very well-said. Forex trading is a job - a highly complex and intellectual job, and as any such job it requires a lot of time and effort invested in education.

You also need a passion for it. If you're in it just for the money you are in it for the wrong reason, money should be secondary to understanding the markets.

I agree. If you don't have a passion for trading you'll get bored, or feel stiffled. One should keep in mind, however, that many people start doing this for the money and then develop the passionfor it later, when they learn a bit.

I think real passion can come with the first serious profit the same as opposite all the passion can be washed away by the first big fail. It is the question of the reasons why you decided to make this kind of business that requires so much nerves and unstability

prakash104 posted:
Only 5% traders are making money in any financial markets(stocks,commodities and forex).If you are new to online trading my first advice is not to believe any websites that claim for 100% accuracy in trading.It's absolutely impossible.

My question is can we predict our future?The answer may be we can guess.That's it, we cannot tell exactly what our future will be tomorrow.Same concept is applicable to trading.Nobody cannot predict exactly about what will happen next in the markets.

So forex trading business is all about probability and not exact or accurate.

Best way to kill emotions and execute trading plan precisely is to use EAs.

I don't know about that, using EAs makes me even more nervous than trading by myself because I feel I have even less control.

The only way your are going to learn how to keep emotions in check is by trading a live account. Demos don't prepare you for that.

coding101 posted:
The only way your are going to learn how to keep emotions in check is by trading a live account. Demos don't prepare you for that.

That is also true, unfortunately. The demo account is good for many things, including training you to see good signals on the market, but you can only learn to control your emotions on a live one.

In my opinion every newbie must use demo trading for at least 3 to 6 months. But at the same time you must always remember that demo is totally different from real trading because of the lack of pressure. Trading in real account there'll be a lot of emotions and that's the trick. So use demo to test only the accuracy of your method.

Hero76 posted:
In my opinion every newbie must use demo trading for at least 3 to 6 months. But at the same time you must always remember that demo is totally different from real trading because of the lack of pressure. Trading in real account there'll be a lot of emotions and that's the trick. So use demo to test only the accuracy of your method.

I absolutely agree with that. I don't think demo account trading should be skipped - it's necessary to learn the software itself, then to learn the market, so to speak, what happens under different trading conditions. And it's great to practise one's strategy and ideas. It's only all that is done it's good to move onto a live account.

killing emotion?? impossible to do that as long as we breath 😁

herodontcry posted:
killing emotion?? impossible to do that as long as we breath 😁

Been trading for about 6 years, first 3 lost thousands and now making it all back slowly. My emotions are pretty much dead at this point regarding trading 😁

xgavinc posted:

herodontcry posted:
killing emotion?? impossible to do that as long as we breath 😁

Been trading for about 6 years, first 3 lost thousands and now making it all back slowly. My emotions are pretty much dead at this point regarding trading 😁

At least you're making it all back. Some people can't achieve that, unfortunately.

mlawson71 posted:

xgavinc posted:

herodontcry posted:
killing emotion?? impossible to do that as long as we breath 😁

Been trading for about 6 years, first 3 lost thousands and now making it all back slowly. My emotions are pretty much dead at this point regarding trading 😁

At least you're making it all back. Some people can't achieve that, unfortunately.

Greedy people will never make it back. I noticed people with patience and persistence inevitably succeed. I think you eventually reach a stage in your trading where you realize the marathon is more successful than the sprint. I can go over 3 days of not opening or closing a trade (and profit - ie. balance remains the same), and it doesn't phase me... the market is just flat, but doesn't remain flat forever. Three years ago a flat balance over 3 days had me anxious and chasing trades and profits to catch up causing me to over leverage... never a good idea.

As one trader put it, 'like monitoring vitals of a patient... the patient (account) may be unresponsive, but just monitoring the vitals (equity and margin) and keeping it in good levels will ensure it remains alive and over time will become stronger and healthier. This requires patience as results inevitably are slow or nonexistent for extended periods.'

I thought that was an excellent example of the psychology one should have.

If you are just starting here are a few pointers:

1. Stick to the trend. Look for opportunities in the direction of the trend.
2. Stop over trading!!!
3. Don't get excited about systems here or in any other website showing 1000% returns in a month. They have huge drawdowns and even worse, they live in places that offer leverages that will drive your account balance to zero in no time.

Great advice. It is something that has to be learned over time. Hopefully without losing too much while learning it.

What do people actually mean by 'overtrading'?

Over trading means placing too many number of trades. It leads to deviate you from your strategy.If you watch and trade sitting in front of your system all the time, then you will be overtrading.Perosnally I am trading only 2 to 4 times in a month and I am successfully making money.That's trading and not overtrading.

You start getting into trades just because you think you can make money, you should get into a trade when the opportunity is there else stay out.

mlawson71 posted:
What do people actually mean by 'overtrading'?

mlawson71 posted:
What do people actually mean by 'overtrading'?

As stated above, it's:

A: Placing too many orders (though generally if there is a good reason, it's ok if managed well.)
B: Placing orders where the lot size is too large (this is the number one killer of an account.)

Both can be alleviated by keeping your margin level above a threshold. The higher your leverage, the higher your threshold should be, generally the consensus is that an above 1000% margin level should be adequate up to 1:1000 leverage, I somewhat disagree and think above 1000% up to 1:100 leverage, and 1000% for every additional 100 (eg. 1:200 - 2000%) will provide a good buffer for any major movement. The correct way to increase your margin level is to deposit additional funds and take losses off the table, a beginner mistake is to attempt a correction by opening additional orders (covering losses), thereby 'overtrading'.

Covering losses - opening additional orders in the hope that the profit from them will cancel out or exceed the orders running at a loss.

xgavinc posted:

mlawson71 posted:
What do people actually mean by 'overtrading'?

As stated above, it's:

A: Placing too many orders (though generally if there is a good reason, it's ok if managed well.)
B: Placing orders where the lot size is too large (this is the number one killer of an account.)

Both can be alleviated by keeping your margin level above a threshold. The higher your leverage, the higher your threshold should be, generally the consensus is that an above 1000% margin level should be adequate up to 1:1000 leverage, I somewhat disagree and think above 1000% up to 1:100 leverage, and 1000% for every additional 100 (eg. 1:200 - 2000%) will provide a good buffer for any major movement. The correct way to increase your margin level is to deposit additional funds and take losses off the table, a beginner mistake is to attempt a correction by opening additional orders (covering losses), thereby 'overtrading'.

Covering losses - opening additional orders in the hope that the profit from them will cancel out or exceed the orders running at a loss.

Thank you for the explanation!