How to reinvest profits for someone beginning

[forefit]

So I have been trading for a little while and I have done well and made some profit. Let's just say it's beginners luck. However when I trade I still feel not that confident and that I'm not sure about what I'm doing and I get the feeling my beginners luck will change and I will end up with losing everythin.

My question is what to do with the £££ I have made?
Do I put into my account and save it for when things go bad?
Do I invest it in trading books or a trading seminar and get a better knowledge making me a more confident trader and less likely to do some stupid mistakes that may cost me a lot of money.

I was thinking about going for the Lex Van Dam trading academy, anyone have any thoughts or opinions on it?

 

[tomorton]

I really believe trading is not something that can be taught, though it can be learned. TA, economics, spreadsheet analysis, these things are more precise areas of knowledge that can be taught, but the best way to learn trading is through trading.

To ensure you survive long enough to have the time to trade more (i.e. avoiding getting wiped out early) concentrate on not losing a large percentage of your account per losing trade - focus on what you could lose on each trade, not how much you could win. Make up a trading plan or at least a trading journal so that you know why you entered every single trade, why entry was at price X, why profits were taken at price Y, why your stop was at price Z, and what happend to price after you exited. Log also the trades you almost took but did not, and why, and what happend to price after your decision.

Adopt and adapt the teachings of Sun Tzu - 'If you know the enemy and know yourself, you need not fear the result of a hundred battles.' If you understand your market and the way you trade it and how you manage your trades, you will be a winner: don't worry about win rate or huge pip counts on the winners, worry about following your plan and limiting your loser pip counts.

 

[shadowninja]

It's good that you acknowledge that luck may have a lot to do with your profits. Most noobs would think they are a trading god before losing everything. I would scale down the amount you're risking per tick until you're positive you know what you're doing. Just keep watching and trading. Over time, your head will figure it out.

 

[forefit]

Thanks guys, I have had a little think. I think my fear is I heard stories to often of people getting lucky very early and then losing it all through overconfidence, I suppose it could very easily happen to me if I'm not disciplined enough. I can kind of understand now that you can read all the books in the world about football but if you don't ever go out and kick football you will never become David Beckham. I'm feeling that its the same trading unless I go out and trade (with small amounts of money I can afford to loose) I will never be good at it. However I'm feeling that maybe I need to read up more and trade as I'm still blindly heading into trades (very bad idea)

 

[Joseff]

So I have been trading for a little while and I have done well and made some profit. Let's just say it's beginners luck. However when I trade I still feel not that confident and that I'm not sure about what I'm doing and I get the feeling my beginners luck will change and I will end up with losing everythin.

So many beginners lose their money, so I would say it is not beginners luck. You did a great job!

My question is what to do with the £££ I have made?

Do I put into my account and save it for when things go bad?

Good idea.

Do I invest it in trading books or a trading seminar and get a better knowledge making me a more confident trader and less likely to do some stupid mistakes that may cost me a lot of money.

Make doest stay at one place. To make money tomorrow - you should study and improve yourself today.

 

[ronblack]

How long is "a little while"? Usually, profits made from trading are partly or wholly redistributed back in the market to cover future drawdown. Everything that you make is not yours but you are acting as a trustee temporarily for other better traders who may come along and win it. Actually, your whole account is at stake if you do not exercise prudent risk and money management.

You sound like a nice guy but you also sound like a newbie because you go around and you brag you made money. Be sure that you are a long way away from making consistent profits but you will if you start working very hard, I mean very hard.

Read this blog carefully: http://www.priceactionlab.com/Blog/...t-capitalization-is-primary-cause-of-failure/

Good luck to you!

 

[Benji871]

If i could offer a sentance that i have heard that sums up any business/profit venture very well.


Its not what you make that counts.... Its what you keep. (After costs and taxes).


One idea would be to have a profit target and then when you hit that target bank 50% of your profits and put it into something safe. Perhaps using 10% so that of that draw-out to treat yourself to something nice (even if its just a drink) so that it feels you have achieved something with your trading. It depends what you are comfortable with really.

Your trading account would still be 25% up in profits after draw-out. And you could still work with compounding your profits by setting your next target 25% higher than the previous - then if/when you get there repeat.

Through experience of the majority (from what i hear with the stats) your broker probably considers those winnings temporary loans that you will be paying back with interest in the future.

 

[galeonbaster]

Don't buy into a course. You got so many systems here on ff as well. Most anyways don't have a long-term edge.

Anyways, if I were you I would just study the markets as much as I can until you really know the odds of something occuring. You have to do work until you can say something like that: this pattern under such and such conditions has 53% probability of reaching an R:R of 3.5:1...

Get to know the odds (requires immense amount of research), then your beginners luck will end, and you will become a professional.

 

[forefit]

How long is "a little while"? Usually, profits made from trading are partly or wholly redistributed back in the market to cover future drawdown. Everything that you make is not yours but you are acting as a trustee temporarily for other better traders who may come along and win it. Actually, your whole account is at stake if you do not exercise prudent risk and money management.

You sound like a nice guy but you also sound like a newbie because you go around and you brag you made money. Be sure that you are a long way away from making consistent profits but you will if you start working very hard, I mean very hard.

Read this blog carefully: http://www.priceactionlab.com/Blog/...t-capitalization-is-primary-cause-of-failure/

Good luck to you!

A little while being 5 months, now I know this is something that takes a long time and many years and don't expect myself to be a daytrader (too be honest I don't think I want to be a daytrader) earning or losing loads, but what you say is right I'm a long way from making a consistent profit especially when I sometimes enter trades when I'm not 100% sure what I'm doing and not having a clear plan, which is asking for trouble.
I'm beginning to see why say many traders starting out fail, one of two things happen
1. They lose all the money quickly by not doing enough research.
2. They make some money at start the very quickly, get too confident make stupid trades and bang goes their all their money.
I have made a little money but I need to now avoid getting too confident, and I want to gain a lot better understanding of the market which is what this post was originally about. The one thing I haven't done which I should have done is play around with a demo account, which I need to do.

 

[jiggly]

Forget the demo and the money, trade a micro account.

you still have a long way to go.

 

[forefit]

Yeah I agree with you on that about the demo account, when you start trading real money it's different because of emotions, but I have just started a micro account a few days ago to practice and get a feel for it. I suppose I should have opened one when I started trading. Oh well..