THE EASIEST WAY TO IDENTIFY A NOVICE
“Because, you see, I’m trading for profit in the long run. I’m looking for consistent gains over time. I don’t want a huge windfall one month and a massive loss the next.” – Forex Round-Up
Hello:
Petro* had made 200% profit on his trading account within 2 weeks. He was already smiling to his bank. The one-day seminar he attended was paying off. He attended the seminar as a beginner, and he bought some advanced charting software which generated signals automatically. The backtest was fine and he’d already been promised the sun and the moon at the seminar. He started trading with $1000 and he initially used $500 for each trade, thinking it was a safe way to play the market. He’d started planning how to surprise his wife and his in-laws with fabulous gifts so that his wife could regret calling him a ‘bloody fool’ earlier.
The EURUSD was in a sustained bearish move that week, in what was an easy market and almost a no-brainer market condition. When his account became $3000, he decided to withdraw some of the profit once the account became $4000. He increased the position sizing to $2000 for a trade so that the account could become $4000 quickly. After he entered another short position, the market moved in his favor by 6 pips, and he was so happy. Trading was the best thing in the world he could ever imagine. But all of a sudden… the market turned sharply and there was a steep rise in price. Petro was too inexperienced to know that the market had been in an oversold condition for a long time and as such, a bullish reversal was imminent. He’d not been using Stops, believing things would always go in his favor: he had hitherto gone unscathed. He thought he was going to survive it. Alas! He was wrong. The EURUSD sprinted northward by 350 pips in less than 48 hours.
He received a margin call. You ought to know what a margin call is. Contrary to what some might be thinking, a margin call isn’t a call from a pretty girl.
“My wife is going to kill me!” he lamented. He had to abscond for a few months so that he could avoid confrontation with his wife. The money he lost was fairly large, given the poor standard of living of the country where he lived. Poverty was rife. Though poverty was no respecter of any country, some lands were more affected by others. Some children even had to do hard labor before they could eat.
I you’ve some trading experience, I can bet you know the reasons why Petro suddenly became a crashing failure. If he knew about effective position sizing and sound risk control, he surely would’ve survived that kind of market condition.
Since then, whenever he heard anyone mentioning anything about Forex, he’d warn the person never to try it. He liked to tell others that he’d done Forex before and he lost his investment. He always gave impression that he knew very much about trading, and the best thing was that people should stay away from it.
There are many people like Petro around, whose mission is to warn people against trading. They like to discourage people because they’ve done it and failed or because they know someone who did it and failed. They feel they know about trading. They’re never going to do it and they’re telling others the reason why they shouldn’t do it. There are some who don’t even know how to set up a trading platform, yet they have strong opinions against trading.
On the other hand, successful trading experts won’t tell you this. I know those who’ve made millions (even billions) of dollars from trading. They’ve been surviving on the markets for many years. These experts once faced challenges in trading, but they went ahead and overcame the challenges. Successful trading experts will never berate trading. Therefore, the easiest way to identify a trading ignoramus or a failure is that the person would try to discourage you from trading and ask you to find better things to do. A novice discourages others because she/he doesn’t know the secret to successful trading and she/he has given up.
Normally certain people wouldn’t come to trading if they had another means of attaining financial freedom. In fact, in most cases, you’ve more to lose by not doing anything. To be a professional in anything – in any walk of life whatsoever, you have to be in the top 10%. No matter what your field is, all the money is being made in the top 10% of that field. It does not matter what field it is, all the money is being made in the top 10%. That is why the top 5-10% of the world makes more money then the rest of the 95% combined. All the money is in the top. If you tried to avoid realities by avoiding trading, the realities would eventually face you somewhere else. So some are misguided when they think there are better things to do. Given the challenges and competition they’ll face in those ‘better things’ to do, it’s more likely that they’ll end up with average or mediocre results in whatever fields they choose. Please think of any professions or areas of business, some would try them and fail; some would try them and succeed. Such is life. Many desire extraordinary success, but are unwilling or too lousy to make the necessary commitment, sacrifices and exercise enough perseverance to attain their goals. Without spending enough time, energy and resources, dreams will only be dreams, not achievements. It takes some rare secrets to be a master of any walk of life.
Dr. Woody Johnson, quoted more below says: “Trading is a journey in self discovery," and "Trading is an art and must be practiced like practicing the medical arts, or practicing law or any other endeavor that requires a high level of proficiency." Furthermore, like medicine and law, the attentive, attuned and serious trader understands that you must approach the markets from a position of continuous learning (both about the markets and more importantly about yourself). But, learning does not occur in any enduring fashion unless it is sparked by curiosity. When that spark is not present, people approach their training and education as a purely academic exercise without ardent application. In this scenario, the training and education last for a while, but without commitment, the novice trader soon stops using the new tools and concepts. They gradually forget them…”
Someone’s exit from the trading world has no effect on anything or anybody. It’s better to find the secrets of those who’d been surviving on the markets for decades, rather than listening to a failure or an ignoramus.
Many spend their sweat and blood and money to get a good university degree; only to be begging to be employed. The ways job beggars are treated are deplorable. Many aren’t happy with the kind of jobs they’re currently doing: but they got no choice. I knew many years ago that even if I had a first-class university degree, that wouldn’t make me the greatest man in the world. Graduates would be paid only for what they do, not what they know.
I you do the right things on the market, you’ll see that online trading is one of the few businesses that are recession-proof. I know that trading can give me the type of financial freedom I long for. I’m aware of my goals in trading and I’m on my way to the attainment of the goals. I’d rather take advice from a successful market speculator, not from an ignoramus, or a failure or a novice.
*That isn’t a real name.
I conclude this article with quotes from 2 successful traders:
“Day trading is a lifestyle choice among other things and it gives the freedom and flexibility to work around other things. For this reason I do not have a set routine. My office is at home and I have a two year old son there whom I love to spend time with whenever I wish. That alone was one of the things that drove me to be a successful trader, well before my little man came along I was determined not to be a dad who left at 7am and got back at 7pm or even later… I also have a successful business with staff and clients who need my time.” – Nick McDonald
“Some will have limiting beliefs about their ability to achieve the vision. They may say to themselves, consciously or unconsciously, "I'm not good enough to do this;" or "I'm not smart enough;" or "I don't deserve it." These are fear-related "emotional tensions" that stem from those limiting beliefs. The important thing to do at this juncture is to confront rather than deny them. They are part of the current reality and therefore, must be identified clearly in order to address them, one limiting belief at a time. Personal mastery is about what the vision does, not so much what the vision is; even if it seems impossible but still conjures within you a deep desire to have it, then your passion and your energy is in the service of driving you to the results you want.” – Dr. Woody Johnson
Your questions and opinions are highly welcome.
Thank you.
With best regards,
Azeez Mustapha
Forex Signals Strategist, Funds Manager &Coach
Senior Analyst
FX Instructor, LLC
Email: amustapha@fxinstructor.com
Yahoo! Messenger ID: saazalmu
Are you facing any challenges in trading? You might want to explore the secrets of markets wizards and duplicate their success. Get the secrets from my past articles at:
www.fxinstructor.com/blog/author/amustapha
Get my Forex trading signals at: http://www.fxinstructor.com/en/analytics/ituglobal
And my past articles are also available at: www.ituglobalforex.blogspot.com
NB: There is risk of loss in trading, but it is possible to be a successful trader.
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