I have only paper traded the forex market for a few months. I am breaking-even, but to be honest I am not sure I know what I am doing. I have joined t2w to try and go back to basics and establish a foundation. I am not even sure if I should be trading forex, may be emini S&P is better for me.
I have been trying to learn picking up little pieces of information, and I think this learning thing is getting to me. I find the learning curve quite steep, which is taking much of my spare time. I am having difficulties managing time, I have a full time job and a family, and my learning time tends to overlap with these other commitments because otherwise I feel my progress is too slow. This is a big conflict, a problem I seem unable to sort out on my own.
Hopefully some friendly people can help me with this.
Hi Rod,
Welcome to T2W!
In answer to the points you raise - there's good news and there's bad news. The good news is that you're not alone, everyone feels the way you do way when they start out.
Now the bad news.
I am breaking-even, but to be honest I am not sure I know what I am doing.
Breaking even is good - but not knowing what you're doing suggests that this may just be luck. Luck = gambling which isn't so good. In fact, it's bad, bad, bad! Certainly, if you switch to trading real money - you'll almost certainly lose. You must know what you're doing right and what you're doing wrong. For this you need a method or strategy - call it what you will. This is imperative, if for no other reason than it enables you to review your trades and see how close you're sticking to your strategy. If you're adhering to it rigidly and only managing to b/e - then your strategy is probably at fault. (This depends upon the number of trades taken and timeframe etc). If the losses are incurred because you're not sticking to the strategy, then it's either too difficult to execute or you have discipline problems. Nine times out of ten it's the latter and not the former.
I am not even sure if I should be trading forex, may be emini S&P is better for me.
This is harder to address as the right market and instrument(s) is really down to each individual's personality, circumstances, time of day they can trade, etc. FX is very fashionable at the moment - but that's not a good reason to trade it! Click on the document icon under my name and download the Trading Plan Template for some general pointers on this front.
I find the learning curve quite steep, which is taking much of my spare time.
This is where the news gets really bad. The more time I spend watching the markets, reading about them and discussing them on here - the bigger the topic becomes and I realise just how little I actually know. It's like a mirage in the desert or a mountain peek - you never reach it. The solution I find is to ignore it; not get depressed by it and to focus on the things that matter. What matters is figuring out how to stay in the game, i.e. not lose money - or if you do - to only lose as small an amount as possible. That way, you can spend months, years or even decades learning, training and fine tuning your skills until you can make money consistently. No one can tell you how long that will be.
If I remember correctly, Dr. A. Elder, in his book 'Welcome to my Trading Room', suggested that breaking even in year 1 is a good achievement. Matching or doing better than having your trading funds on deposit in a bank or building society in year two is the second goal. Year three should see returns in excess of two times the bank/ building society rate. Be very, very wary of anyone who tells you that you can start making serious money (as a percentage of your capital) in a matter of weeks. The massive failure rate of circa 90% that is so often quoted is simply because there are no qualifications required to enter this arena and most newbies think it'll be easy. They want fast money (who doesn't) and aren't prepared to put in the hours. They don't know what they're doing and they gamble, with the inevitable consequence that they blow their accounts. If you stay in the game (i.e. get the risk and money management sorted), apply yourself to the task in hand as and when work and family commitments allow, then the chances of succeeding as a trader are probably no better or worse than any other business venture.
This is just my view and I may be wrong in what I say but it's what I believe. And personal belief is everything in this game. In time, you'll form your own views and beliefs about the markets which will not be the same as other market participants. This has to be the case, otherwise there wouldn't be anyone to take the other side of your trades. So, keep an open mind, listen to everything, but accept nothing until you've analysed it, understood it, liked it and concluded that it fits with your personality and style of trading. "It" can be anything about the markets that isn't an irrefutable fact. The NYSE is open between 930-4.00pm Mo-Fri. This is fact; no point arguing about it. That the U.K. FTSE 100 follows the U.S. and will trade lower if the Dow closed lower the day before is not a fact. It's a generalization and
may form the basis of a trading strategy for some people. You get the idea, I hope!
To conclude, chill out, relax, take your time. Don't give up the day job just yet and don't ignore your family to devote time to trading. Family is WAAAY more important; not a problem for me as I've killed off most of mine.:cheesy:
Good luck,
Tim.
