How I Crashed My Trading Account; The Lessons
2007 was the year. I could remember the keen feelings of excitement I had when I came to know about forex trading. I wanted to know everything possible about forex trading and how I will be making money trading e-currencies.
I took the first step to look for someone who can put me through. Gradually I started to learn the fundamental and technical aspect of trading. Back then, I thought it was something I could know in few weeks and start making big money.
I had to practice what I was learning for months and finally I felt confident that I could grow an account into thousands of dollars. (I’m sure you must have been smiling right now, if you know what the humble beginnings of newbies looks like)
I have crashed my account more than the word “MANY TIMES” What if I told you I have banks coming after me because I thought I learned from the right tutors. They called themselves professionals not knowing I was learning how to crash my account.
I can go on and on and on to talk about what I have gone through and those are the things we have in common. Like you, I’ve had the experience of the good and bad times. But the most important thing is the type of trader one should be after the ugly experiences.
Let’s not talk about failure, let’s talk about success and how the later came by.
Forex as a business has taught me real life lessons and I’m sure you must have learnt one or two as well. Let me talk about the strategy I have used.I have used a lot of strategies.
If you are reading this post right now You’ll agree with me that at least 50 traders are creating different strategies right now. I am very sure in the next 15 minutes; more than 100 traders would have created a lot of strategies. I am saying this because I have also created tons of strategy in my whole life.
I have used different trading systems, semi-automated robots and other fully automated robots I have purchased. I have also created strategies while walking and even while sleeping, not knowing it is not about my strategies, but it’s about how well the strategy can stand the test of time.
What I Have Learnt
Like I have said, I didn’t know the first law of using any trading strategy is to scrutinize it. Back-testing and forward-testing have narrowed my search for a perfect trading systems. I didn’t know management can kiss me or bite me. I was trading without knowing what I am willing to lose.
Warren Buffet said that, people would rather like to go for an opportunity of winning lottery tickets next week than an opportunity to get rich slowly which is the same truth in Forex business.
I know lot of traders today that have a strategy in their hands that can give them at least 5% monthly, but still they are not using them because they want to gamble and get rich quick.
Don’t get me wrong, not all trading systems you see are crap, but there’s no free lunch. You have to pay for what’s worth it sometimes and it is not so in some cases; it is the reliability and not just the profitability of the system that matters.
Today I do read a lot on trading systems and stream videos, but since I know that we have locks on our doors for a reason, then we should also have a lock on our brain to avoid bad information.
What You Should Know About Insurance In Forex Trading
I learnt something about insurance too. The first rule of insurance is you cant buy insurance when you need it. You need to buy it before that time of need. No matter how good your system is, no matter how good you are, you need to understand insurance or protection from losses.
Investing in forex is less risky when you know how to be protected from crashing your account. So the traders who say forex is risky often do not have protection or proper risk management strategies applied to their trading account.
Things will always go wrong. But are you prepared for it? I regret not knowing much about robots, I regret not knowing anything about semi-automated robot. I was blinded by the sentiments of poor traders that didn’t get the best out of automated systems not knowing that I can make use of a robot to my advantage.
I can quickly go back to many years back to see if a robot is ok by me, but with manual trading, I am only wasting my time and I can’t be accurate.
The Truth About Forex Trading.
Professional traders need to know these 3 things
- When to enter the market
- When to exit the market
- How to get their money off the table.
That is what you should also learn how to do. Always remember to never ever count your money when it still on the table and eventually lose it all. The market gives and the market takes it all back if you just leave your money sitting there.
Why compound your profit? Are you not investing in forex like a business? The aim of trading forex is to get your money off the table and still remain in business. That is how it should be.
My Final Statement
You definitely have the same experience of crashing your account and the question should be: what type of trader are you? Have you learned from your trading mistakes?
If you do, you have wisdom and if you haven’t, you have been moving in a circle. I have learnt from my mistakes, I didn’t change or stop trading forex, I just see things differently now. What about you?