Loosing money, is it the best way to learn?

forefit

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Losing money, is it the best way to learn?

So here is may 2 cents coming from someone not very experienced about learning to trade.

To start you trading have to read up trading and read books to learn about trading. However if you want to be a footballer like David Beckham reading books about football and not actually kicking a ball ain't going to make you a good trader.

So you use a demo account to practise you learn a little bit more and you learn the basics, but there is no real emotion involved in demo money, you also make silly mistakes which might loose you a few quid but again you don't take it seriously cos it ain't real. This is like being an army soldier, he practises and practises on friendly soil using blank rounds and trying to work out what to do in different situations. However this isn't real, he isn't scared he knows he's safe and won't die. It's not real combat zone, the real thing will be different.

You then use a real account which is where I'm at today, this is where the reading and practising comes into play. Those silly mistakes you make when using a demo account come into play, your emotions come into play a lot more and if you are that army soldier this is what might cost you your life. I have found that this is where I have learnt the most, however I have not really learnt much from a trade has gone right but I have learnt a lot lot more from when a trade goes wrong. I carry out a post mortem on the trade to find out what went wrong and most of the time I find it's down to really simple mistakes I have been making. These were simple mistakes I knew about and I had done in a demo but when you loose real money on these mistakes you get your finger a little burnt and become more disciplined.

This is my philosophy on becoming a good trader to really learn how to trade you need to get your fingers burnt a little of amounts you can afford to loose, learn from these mistakes and progress. Therefore as strange as it sounds loosing money is actually a good thing, we learn from making mistakes.

I welcome people to tell me what they think about my views
 
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Stages of account usage
1) Demo account - learn how to use the system, what the various buttons do, then figure out a system ie test various strategies
2) Live account, minimal amounts - we're looking at 10c/pip or similar; see if what you do on demo works in a live situation given that you may be filled badly and experience slippage, as well as how your emotions play up; if after a few trades you don't give a damn about losing £1-2 then perhaps consider stepping it up a bit to a level where losing money regularly will hurt a little and tease out the degen inside you that means you chase the market when you take a string of losses. If you find that you're losing a larger sum like £100 routinely and picking up the odd £50 and feeling a sense of joy with the rare £50, you may need to seek help.
3) Live account, larger amounts - time to build the account because you've sussed things out
 
Re: Losing money, is it the best way to learn?

So here is may 2 cents coming from someone not very experienced about learning to trade.

To start you trading have to read up trading and read books to learn about trading. However if you want to be a footballer like David Beckham reading books about football and not actually kicking a ball ain't going to make you a good trader.

So you use a demo account to practise you learn a little bit more and you learn the basics, but there is no real emotion involved in demo money, you also make silly mistakes which might loose you a few quid but again you don't take it seriously cos it ain't real. This is like being an army soldier, he practises and practises on friendly soil using blank rounds and trying to work out what to do in different situations. However this isn't real, he isn't scared he knows he's safe and won't die. It's not real combat zone, the real thing will be different.

You then use a real account which is where I'm at today, this is where the reading and practising comes into play. Those silly mistakes you make when using a demo account come into play, your emotions come into play a lot more and if you are that army soldier this is what might cost you your life. I have found that this is where I have learnt the most, however I have not really learnt much from a trade has gone right but I have learnt a lot lot more from when a trade goes wrong. I carry out a post mortem on the trade to find out what went wrong and most of the time I find it's down to really simple mistakes I have been making. These were simple mistakes I knew about and I had done in a demo but when you loose real money on these mistakes you get your finger a little burnt and become more disciplined.

This is my philosophy on becoming a good trader to really learn how to trade you need to get your fingers burnt a little of amounts you can afford to loose, learn from these mistakes and progress. Therefore as strange as it sounds loosing money is actually a good thing, we learn from making mistakes.

I welcome people to tell me what they think about my views


Woteva. Think of all the little cliches applied to trading (trading being betting on market direction), you could apply these to almost any form of gambling, dicipline, money management, etc etc.

Nobody becomes a good gambler by losing money.
 
Unless you're scalping with a 95% success rate then losing has to be something you are ready for and even expect. If you can't get over that then imho you won't make it as a consistently profitable trader.

p.s. It's 'losing', not 'loosing'. Saying it in your head might help...
 
A lot of newbies that start trading do so by choosing the most eratic and random markets simply because the web is full of bs media on get rich quick kind of schemes.

New traders should not start trading currencies or commodities that are highly volatile. Start with trading stocks where you are better able to gauge the moves and find more instruments that have a definite trend.

I do not trade commodities however you can make real BIG money in commodities this year. All food prices are going up from corn to orange juice. All precious metals are going up from Gold to Silver. All energy products are also in a strong trend upward like oil.

No one knows how long its going to last but this is the golden opportunity to make serious money in the upcoming days and months. If you can milk these trends correctly you would not need trade for another year or two.
 
In the gold rush, the people who made money sold shovels and picks. In the trading gold rush, people who write books and those who offer counselling,signals ,trading education,systems,software ,other services make money, traders don’t. This sums it up.

Positive as always (y)
 
Also you have to buy commodities with the commercials (hedge funds, smart money) while the trend is shaping up. There is no point of buying something when everyone wants to get in. Thats how markets work. Smart money creates an uptrend and then sells it to the late comers and newbies.

If everyone is talking about something then its a bad idea to get in as you might be already late. Get into a trend when its initially developing is where the money lies. Hence this is where price patterns and volume play and important role. All so called 95% of traders (the number might be true for day traders but in a bull market all you need to do is to hit the buy button on a good stock and its bound to go up so this analogy is far from perfect) are trying to figure this out using all sorts of magical indicators where as all it is just crowd behavior.
 
Right my point is, if you make a trade which is a loss you can afford to lose and you carry out a postmortem on the trade and figure what went wrong and how to prevent it from happening again. This is how you can learn, and because you lost real money from that mistake you ain't going to be making that mistake anytime soon. You can make mistakes in a demo account, but guess what I didn't take them seriously because I didn't lose any money, when you lose real money then you start paying attention to these mistakes you make.

If you are making trades, losing money and you can't figure out why you losing or don't bother to workout where it went wrong then you are going to have problems.
 
Re: Losing money, is it the best way to learn?

Woteva. Think of all the little cliches applied to trading (trading being betting on market direction), you could apply these to almost any form of gambling, dicipline, money management, etc etc.

Nobody becomes a good gambler by losing money.

True, but I agree with the spirit of forefit's premise, the only way you will correct bad habits in trading is to lose [big] money. You won't blow your account or get a margin call by missing a trade you should have taken but you won't last long if you keep taking trades you shouldn't have taken. A few too many of those will make you kick the habit, one way or another...
 
Study success stories in the related markets and get clues from there.
 
I think getting little burns (to continue the metaphor) in the real market is the best way to learn

i went live just last week and the first lesson it reinforced was protecting capital, i wasn't silly enough to let losses run but i closed the position with a small loss (3 pips + spread) and watched as the price plummeted (then it broke through a prior support so i went short) that was a nice 20 pip up day.

professional advice (books, websites) is a great way to start but you have to go live before the lessons from the books really sink in
 
Re: Losing money, is it the best way to learn?

This is my philosophy on becoming a good trader to really learn how to trade you need to get your fingers burnt a little of amounts you can afford to loose, learn from these mistakes and progress. Therefore as strange as it sounds loosing money is actually a good thing, we learn from making mistakes.

I welcome people to tell me what they think about my views

When you join the 95% club , just keep putting more money and more into a deep hole.

http://www.google.co.uk/#hl=en&xhr=...q=95+%+traders+lose&pbx=1&fp=7427509b6fef3b35
 
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