Answering Forex's Most Asked Questions
Summary
TLDRIn this insightful Q&A, a seasoned Forex trader shares his journey and insights on achieving psychological stability in trading. He emphasizes the importance of extensive testing, backtesting, and live trading to build confidence and familiarity with market patterns. The trader also discusses the challenges of the learning phase, including the temptation to quit, and advises on financial planning for those considering a full-time trading career. He shares his vision of using trading profits to fund other ventures and his long-term goals, including managing larger capital and diversifying his business interests.
Takeaways
- ๐ง The importance of psychological stability in trading is emphasized, which comes from extensive testing, backtesting, and live trading experience.
- ๐ The speaker has a deep understanding of trading strategies, including optimal times, pairs, entries, and position sizes, based on historical data.
- ๐ก A solid trading plan and risk management are key to maintaining good trading psychology, as they reduce uncertainty and stress.
- ๐ซ The speaker does not experience FOMO (Fear of Missing Out) or fear of entry, instead following a disciplined approach to trading.
- ๐ก The value of reviewing past data and screenshots to inform current trading decisions is highlighted.
- ๐ The speaker experienced significant ups and downs early in their trading career, which is common for new traders.
- ๐ฐ The realization that live trading with real money without proper testing can be costly and inefficient is discussed.
- ๐ The suggestion to save up 6 to 12 months of expenses before considering full-time trading to ensure financial security.
- ๐ The idea of having a part-time job or other income source to cover expenses while focusing on trading is presented.
- ๐ The caution against quitting a job unless trading consistently earns more than the salary, to maintain financial stability.
- ๐ The speaker's vision for using trading profits to fund other businesses and long-term investments is shared.
- ๐ฎ A projection of continued growth in trading over the next 5 years, with a focus on compounding effects and managing larger capital.
Q & A
What is the key to having a good trading psychology according to the speaker?
-The key to having a good trading psychology is spending many hours testing, backtesting, live trading, and understanding strategies, entries, risk management, and other aspects of trading. This builds confidence and allows the trader to handle various market situations without stress or fear.
How does the speaker manage to avoid stress and fear in trading?
-The speaker avoids stress and fear by relying on extensive testing and experience, which provides a solid foundation of knowledge about market behavior and trading strategies. This experience reduces uncertainty and helps in managing trades effectively.
What does the speaker suggest for traders who are struggling with their trading psychology?
-The speaker suggests looking back at previous data and understanding how past trades have behaved under similar conditions. This historical perspective can help in managing the current situation and building confidence.
Did the speaker ever feel like quitting during his trading journey?
-Yes, the speaker felt like quitting during his early trading days when he experienced significant losses and saw others making profits. The desire to quit was especially strong when he was not seeing any progress despite continuous effort.
What advice does the speaker give to someone considering quitting their job to trade full-time?
-The speaker advises saving up for 6 to 12 months to cover unexpected expenses and to test if trading is suitable for them. He also suggests maintaining a part-time job or other income source to relieve pressure from trading and ensure financial security.
How does the speaker view the role of a job in relation to trading?
-The speaker sees a job as a source of financial security that allows for trading without the pressure to make profits. He believes that the security provided by a job enables traders to perform better without the stress of needing to cover their expenses through trading.
What is the speaker's long-term vision for his trading career?
-The speaker envisions using trading to fund other businesses, particularly those that are considered 'boring' but have long-term profitability. He does not see himself trading for 10-15-20 years continuously but rather using it as a stepping stone to grow his wealth and invest in other ventures.
How does the speaker plan to grow his trading account in the long term?
-The speaker plans to grow his trading account by continuously investing in index funds, stocks, and other assets that have compounding effects. He also hopes to manage larger capital and possibly work with prop firms.
What does the speaker mean by 'The Compound Effect' in the context of trading?
-The 'Compound Effect' refers to the exponential growth of an investment as a result of reinvesting the earnings. The speaker believes in the power of compounding to significantly grow his trading capital over time.
How does the speaker approach trading when there are significant market events like an NFP release?
-The speaker suggests that during significant market events like an NFP release, it might be necessary to manage trades differently. If a trade becomes invalid due to such events, it could be a reason to exit the trade.
What is the speaker's view on the importance of having a plan when entering a trade?
-The speaker emphasizes the importance of having a plan and entering trades when the plan dictates. He believes in letting trades play out according to the plan, and only making adjustments if there are changes in the trade's validity or market conditions.
Outlines
๐ Forex Trading Psychology and Experience Sharing
The speaker discusses the importance of trading psychology in Forex, attributing his own success to extensive testing and live trading experience. He emphasizes the value of backtesting strategies, understanding risk management, and recognizing patterns in market behavior. His confidence stems from a deep knowledge of trading patterns and past experiences, which allows him to enter trades without fear or stress. The speaker also shares his early struggles with trading, including significant losses and the temptation to quit, highlighting the importance of learning and patience in the trading journey.
๐ผ Balancing a Job with Aspiring Full-Time Trading
The speaker provides advice for individuals considering transitioning from a job to full-time trading. He suggests saving up to 12 months' worth of expenses to cover unexpected costs and to give oneself a buffer period to test the viability of trading as a career. He also recommends maintaining a part-time job or other income source to alleviate the pressure of needing to make profits from trading immediately. The speaker stresses the importance of not quitting a job unless trading consistently earns more than the salary, as the security of a job allows for trading without the pressure of covering immediate expenses.
Mindmap
Keywords
๐กForex
๐กPsychology
๐กBacktesting
๐กRisk Management
๐กEntry
๐กStop Loss
๐กTake Profit
๐กFOMO
๐ก
๐กNFP Release
๐กCompound Effect
๐กIndex Funds
๐กProp Firms
Highlights
The importance of testing and backtesting in developing good trading psychology.
The speaker's personal experience with the highs and lows of trading, including early success and subsequent losses.
The psychological impact of consistently losing trades and the desire to quit during the learning phase.
The necessity of learning and testing strategies before risking real capital in the markets.
The concept of using historical trading data to build confidence and manage current trading situations.
The speaker's approach to managing trades without stress or fear, based on a well-defined plan.
The idea of not quitting a job solely based on the potential of trading success.
The recommendation to save up 6 to 12 months of expenses before considering full-time trading.
The suggestion to maintain a part-time job or other income source while focusing on trading.
The importance of financial backing and the pressure it alleviates in trading.
The comparison between the stability of a job and the uncertainty of trading profits.
The speaker's vision of using trading profits to fund other businesses and investments.
The long-term perspective on trading as a means to support more stable and 'boring' businesses.
The potential for trading to compound and grow personal wealth over time.
The speaker's personal goal to continue trading and growing, without plateauing.
The idea of managing larger capital and possibly engaging in proprietary trading firms in the future.
The call for viewers to submit further questions for a Q&A session in the comments.
Transcripts
okay guys so I have one of my
acquaintances here and he's going to ask
me some questions about Forex you know
he's a fellow Trader that obviously is
trying to make it to the world effects
level and you know if you want to be a
humble successful Trader like myself
then you know people obviously going to
want to learn so we have an acquaintance
here that is going to ask me some
questions and basically I'm going to
answer like a little live Q&A so rather
than you guys ask me the questions
questions from a Trader Trader to Trader
so let's see how this goes how how would
a Trader get their psychology to the
level of yours if they wanted to reach
the main reason why I have good
psychology so to speak is I think just
because I've spent so many hours testing
I spent so many hours back testing spent
so many hours live trading so many hours
testing strategies entries risk
management and everything you know I
know which R reward works I know which
times of the day work I know which pairs
which entries which stock stoss sizes I
know everything that should work like
live from my previous data so if I go
into the markets I have no reason for my
psychology to be bad I I don't go in
thinking okay I hope this trade doesn't
hit stop loss or I hope this trade
doesn't retest when I'm five Pips from
my take profit no I I don't think about
that because I've been in that position
so many times in testing I could just
look back at 20 screenshots whether
that's happened previously and kind of
get a good idea of how to manage it and
how to you know handle the current
situation if I'm looking at a chart and
you know you don't know what to do look
back at previous data look back at
what's happened previously we can only
trade based off of previous data we
can't trade on stuff that's happening in
the future because that's uncertain but
we can go off of what's happened
previously over the past few years and
this will build a lot of confidence if
you've seen it work for three years why
would you not expect it to work over the
next year you know you have no reason to
do so so that is why I'm not stressed
about trades I don't get fomo I don't
get fear of Entry I just enter the trade
when my plan tells me to enter let it
play out if there's a management
opportunity obviously I will do so if
the trade becomes invalid for example or
maybe there's an NFP release these are
the only reasons why I will get out of
the trade and I feel like that's why my
psychology is pretty good was there ever
a point in your training Journey where
you felt like quitting every goddamn
day you know when I started trading I
was obviously quite young and my first
account was I flipped it from 400 to 2
Grand for example in a week and you know
when you see that those sort of gains
1600 profit as a 16-year-old in a week
just from my phone when I was at College
I was like this is great but then every
single week after that that account was
going to zero every single deposit a day
later was at zero so during those those
times when you're learning to trade
you're putting in live money because you
don't know that it's not the right thing
to do you don't realize that okay maybe
if I spend time back testing or even
testing my trading on a demo for example
that I could save hundreds if not
thousands of pounds from the learning
process it's like if you're business
school for example or you're studying it
for a degree they're not going to say
put a few grand into a business and just
see if it works that's not going to
happen whereas in trading you need to
learn before you put your Capital
towards the markets so during those
times I obviously wanted to quit andless
say you have a big loss you're going to
want to quit and just along the way some
people take months to learn to trade
some people take years if you go at
something every single day for two years
and you don't see any progress you don't
make any money your brain obviously
tells you that it's not the right thing
to do especially when you're seeing so
many people around you or online making
money you think you're doing something
wrong you think it's just not for you
you're not cut out to do so and this is
obviously the time when I wanted to quit
when I was seeing all the social media
people making profit and I was just sat
there in my bedroom losing money what
would you do if you're in a job right
now and you got into 4X maybe say you've
been doing it for a year year and a half
something like that you kind of had a
strategy would you quit your job right
now and fully send trading or would you
say would you stay in your job stay
working even even though it might be
holding you back from becoming more
successful in trading what would you do
I feel like if you're in a situation
where you feel like your job or your
life is holding you back from Trading
you just need to save up you save up 6
to 12 months ideally 12 months because
that can cover for any you know
unexpected expenses let's say the car
breaks down the fridge breaks you need
to replace things you can cover that
with 12 months rent ideally and then it
gives you 12 months to actually see if
trading is for you if it's the thing
that's holding you back you'll soon see
if that is the case within 6 months if
you haven't even made any money the
thing that's holding you back clearly
wasn't holding you back so if you're
looking to go all in you need to have
you know Financial backing behind you
obviously the more money you have saved
the better because it will relieve
pressure from your trading because you
don't have to make money but also I feel
like maybe you get a part-time job or
some other source of income that covers
all your expenses so let's say your
total expenses are 1,500 per month and
your job is paying you three grand per
month for example you could then get a
part-time job that pays you, 1500 two
grand and then you could obviously use
that extra time that you're not using
for your part-time job to then focus on
trading and I feel like if your trading
isn't making at least double what your
normal salary is making then you
definitely shouldn't quit because
obviously trading has a lot of
uncertainty you can have a couple months
where you don't make any money so if
you're on the edge of just covering your
salary definitely don't don't quit
definitely do not quit because that
security that your job is actually
giving you it's allowing you to trade
with like no pressure to make profit so
if that security is all gone are you
still going to be able to trade the same
because you have to make profit you have
to make money to cover your expenses if
you want to eat you have to win the
trade is that going to be the same if
that is the only thing you're actually
doing where do you see you and you're
trading in 5 years God I don't know if I
make it that long to be honest
dead dead just on a beach somewhere
trading on my phone on a beach no but in
all seriousness I personally just use
trading to fund other businesses and you
know I want to use trading to fund you
know property businesses you know
considered boring businesses because
these are the ones that make money
longterm it's like Amazon for example no
one would think oh I'd love to run a
bookstore no one thinks oh it's going to
be such an exciting career no but
obviously B businesses make the most
money trading is obviously quite
exciting and it does you know get the
adrenaline pumping around the body but
would I want to do it for another 10 15
20 years probably not in 5 years I'll
probably obviously still be trading
Forex trying to make as much money as
possible hopefully you know prop firms
are still around so we can just rinse
more prop firms um but yeah just grow
the personal account you know The
Compound Effect is unbelievable keep
investing into index funds stocks and
everything like this um that is
obviously good for the long term and I
feel like in 5 years I'll be in a very
very good place uh in my trading so
obviously imagine I've only been trading
for 5 years imagine another 5 years the
level that I could actually be at that
point especially with managing larger
Capital maybe even some extra cool
businesses uh but yeah obviously I don't
want to just plateau and just be the
same just film YouTube video take the
same trades like I want to you know take
it to the next level but you obviously
need to know what the next level is for
you so so if you want to ask me some
questions for a further Q&A leave them
in the comments down below and I'll
catch you guys in the next video
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