When I was a kid I drew like Michelangelo. It took me years to learn to draw like a kid.
-Pablo Picasso
I don’t want you to follow me or anyone else.
I would not lead you into the promised land if I could,
because if I could lead you in..somebody else could lead you out.
- Eugene Debs
I never realized how mediocre the world was until I got involved with supposedly some of it’s top people.
-Mason Williams
Spontaneity (the impulses from our best self) gets confused with impulsivity (the impulses from our sick self) and then there is no way to tell the difference.
-Abraham Maslow
Invest in the process rather than the product. Process living neutralizes the depleting and impoverishing effects of chronically living in anticipation.
- Theodore Rubin
The master had never heard him speak so fervently. He walked on in silence a little, then said, “There is truth, my boy, But the doctrine you desire, absolute perfect dogma that alone provides wisdom, does not exist. Nor should you long for perfect doctrine, my friend. Rather, you should long for perfection of yourself. The deity is within you, not in books and ideas. Truth is lived..not taught .. Be prepared for conflicts .. I can see they have already begun.”
-Herman Hesse
Trading FX.. hard enough .. teaching trading ..even harder because you introduce a new set of variables.. your own perceptions ..and theirs which you cannot know and constantly only approximate.. and that problem goes both ways …teacher to student and student to teacher..both guessing what the other understands and means..
However.. there is an objective path I believe can lead to mastering the subjective art of trading…
1) Study and understand thoroughly the basics ..these are ;
a) Technical analysis as a tool
b) Probability and application of probability using technical analysis
c) Money management and risk control and risk control and of course the most important thing.. risk control
d) Build your own trading strategy and allow it to evolve - simple is best
e) Understanding the type of trading environment the market is currently in Monthly Weekly Daily (macro economics & market psychology )
f) Accurate and Proper self assessment including emotional control ..acceptance of and using your emotions to your advantage.. not attempting to put them in a box. “I am emotionless when I trade” is developed from experience trading USING your emotions ..not trading while cutting yourself off from them.
2) Practice applying these basics – and look for where you are making errors using a well designed trade log (clear simple accurate records to track measurably important aspects of each trade) and a journal. I did not say look where you are wrong in trades.. I said errors..especially avoidable errors..
You will be wrong in trades alot.. learn to love it..
The easy to find errors are usually in the use of a,b and c in the trade log and the more difficult is d and e… as these are more subjective
and f.. I won’t touch that one to deeply.. other than to say ..the market will exploit whatever emotional or psychological weaknesses we have and our attempts to hide them unconsciously or not…will not work.
3) Frequency and Variance ->Practice .. stop staring at the monitor, reading blogs and listening to what others think.. practice the basics.. be yourself ..by yourself..
So if you make 25 trades a month ..obviously you will not have as much experience as someone who trades 100 times a month. In the learning phase if you want to develop quicker.. more trades are better..because mastering theory is meaningless without the real life market application
So I guess the average learning curve to be somewhere around 1 year to be consistently profitable once you have mastered applying the basics.
Repeat.. once you have mastered applying the basics.
Then you will be able to adapt your strategy to the existing conditions and use the natural variance which MUST occur… “to your advantage..” the only way I know to do that is trade enough times for your edge to kick in statistically.
So it becomes trade alot (enough) to learn quickly .. then trade enough to let your edge work for you.. then it eventually becomes..if you stick with it long enough .. trade less frequently because you avoid both sides of 60/40 trades because you recognize them from acquired experience..as a damaging habit to your results..
you trade less, produce more..and learn to love breakevens as a defense.
From my experience this is a path that works.
Last couple of points on acct size..
If you can’t afford $3000 ($1000 – 3 times) blowing yourself up in real cash accts learning ..it’s a major problem.. under capitalization ..kills
If you think you are going to make $2000 a month from a $25,000 acct ..you have a self perception problem.. (you in the 1% who can do this are the exception)
If you don’t have at least 6 months of positive returns DON’T move up in size
Get capitalized.. or build a bank slowly ..but to make a living trading ..pull enough out of your acct each month to live well, cover expenses and pay your taxes.. you need to be trading a decent size .. and that means a large enough trading account.
And Finally ..This is not a part time endeavor.. please don’t kid yourself.. the competition is working 60 hour weeks. All of this is a moving towards process.. in every aspect mentioned. You never actually arrive.
Thanks for reading ..The End
