Answering Forex's Most Asked Questions

Summary

In 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

• 🧠 The importance of psychological stability in trading is emphasized, which comes from extensive testing, backtesting, and live trading experience.
• 📊 The speaker has a deep understanding of trading strategies, including optimal times, pairs, entries, and position sizes, based on historical data.
• 🛡 A solid trading plan and risk management are key to maintaining good trading psychology, as they reduce uncertainty and stress.
• 🚫 The speaker does not experience FOMO (Fear of Missing Out) or fear of entry, instead following a disciplined approach to trading.
• 💡 The value of reviewing past data and screenshots to inform current trading decisions is highlighted.
• 🔄 The speaker experienced significant ups and downs early in their trading career, which is common for new traders.
• 💰 The realization that live trading with real money without proper testing can be costly and inefficient is discussed.
• 🏆 The suggestion to save up 6 to 12 months of expenses before considering full-time trading to ensure financial security.
• 🔄 The idea of having a part-time job or other income source to cover expenses while focusing on trading is presented.
• 🏁 The caution against quitting a job unless trading consistently earns more than the salary, to maintain financial stability.
• 🏆 The speaker's vision for using trading profits to fund other businesses and long-term investments is shared.
• 🔮 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

00:00

📊 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.

05:01

💼 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.

Keywords

💡Forex

Forex, short for foreign exchange, is a global marketplace for trading currencies. It is the largest and most liquid financial market in the world. In the video, the speaker discusses being a successful trader in the Forex market and shares insights on trading psychology and strategies.

💡Psychology

Trading psychology refers to the emotional and mental state of a trader and how it affects their trading decisions. The speaker emphasizes the importance of having good trading psychology, which they attribute to extensive testing, backtesting, and live trading experiences that have built their confidence.

💡Backtesting

Backtesting is the process of evaluating the performance of a trading strategy using historical data. The speaker mentions backtesting as a crucial part of their trading education, which has helped them understand which strategies work and has contributed to their strong trading psychology.

💡Risk Management

Risk management in trading involves the identification, evaluation, and prioritization of risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events. The speaker discusses the importance of knowing risk management as part of having a solid trading strategy.

💡Entry

An entry in trading refers to the specific price at which a trader decides to open a position. The speaker talks about having tested and knowing which entries work best for them, which is a key part of their trading strategy.

💡Stop Loss

A stop loss is an order placed with a broker to sell a security when it reaches a certain price. It is designed to limit an investor's loss on a position. The speaker mentions not worrying about trades hitting the stop loss due to their tested strategies and experience.

💡Take Profit

Take profit is an order placed to sell a security when it reaches a certain price, locking in a certain profit level. The speaker discusses not being concerned about trades retracing near their take profit levels, indicating confidence in their strategy.

💡FOMO

FOMO stands for 'Fear of Missing Out', a phenomenon where people feel a sense of anxiety that they are missing out on an opportunity. The speaker mentions not experiencing FOMO in trading, which is a result of their well-established trading psychology.

💡

💡NFP Release

NFP stands for Non-Farm Payrolls, which is a key economic indicator in the United States, reflecting the number of paid workers in the country. The speaker mentions NFP release as a reason for potentially exiting a trade, indicating awareness of significant market events that can impact trading.

💡Compound Effect

The compound effect refers to the cumulative impact of small changes over time, which can lead to significant results. The speaker talks about the power of compounding in trading and investing, emphasizing the importance of reinvesting profits for long-term growth.

💡Index Funds

An index fund is a type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, like the S&P 500. The speaker mentions investing in index funds as part of a long-term strategy to grow their personal account.

💡Prop Firms

Prop firms, or proprietary trading firms, are companies that trade stocks, bonds, derivatives, and other securities for their own accounts. The speaker mentions prop firms as a potential avenue for growth, indicating an interest in leveraging their trading skills in different environments.

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