Negative example of how one should learn to trade forex
This trading statement from a course participant’s demo account highlights some common mistakes one makes when trading forex. Following such a trading plan if there is one at all will not achieve consistent trading results. The course participant attended the Tflow® Course last year in December so it is exactly 1 year since. This is a good time to look at his results and to ask what went right/wrong. Participant has given me permission to use this screen grab but keep his identity private.
Observations from this trading statement
- More than $27,000 of the $30,000 trading profit came from the first 2 trades
- Based on the swap value and personal feedback, those two trades were held for nearly a year
- Inconsistent contract size
- Stop losses not placed except in one instance
- 10 wins out of 23 total
- Only 23 trades done in 1 year
Mistakes made by this trader
- At first glance, can make money so I was impressed.
- Making more than 90 percent of profit from less than 10 percent of trades is not the ingredient for consistency.
- Holding for so long? Wait?! Are you investing or trading?
- Inconsistent trading size again not recommended for consistent trading performance.
- Stop losses not placed. Grave mistake this one. After checking with the participant, he admitted they were the result of placing orders wrongly rather than wilfully deciding not to place. But how come one whole year never check with anyone at all? Hmmm…
- 10 wins out of 23 total. Not a grave problem. Some traders can cut many small losses and ride some big ones. Because he is a beginner, the performance is justified.
- Why so few trades done in one year?
It is our fault
We set out to run the course as best as we can and we agree that trading profitably is the final achievement that we are aiming at. Unfortunately we cannot ensure that every individual turns out the way we want and each participant has a responsibility to follow the plan we developed. Frankly speaking we are not responsible if one deviates from this plan.
There is one line that is clearly drawn though. Everyone must know how to place an order, set targets and stop losses correctly. Steps laid in black and white with no discretion required. So we have failed where this is concerned and will review what how we can improve the lesson. That said we encourage all participants to contact us if you are unable or did not put your stops or targets in. Please don’t keep quiet for one whole year.
It is your fault
Hey dear 23 practice trades in one year in a demo account is not enough. You may want to do 23 real trades in one year due to your plan and schedule but to condense your learning you should be doing like 23,000 or maybe 230,000 trades in your demo. Plenty of practice is the best way to learn. Please keep your emails coming, we will address them as well as we can.
So how can we achieve consistent forex trading results?
- Send your us screen grabs of your statement and so that we can spot mistakes like those made here.
- Practice a lot. It is a lifetime skill but the earlier you embark on the journey the earlier you will enjoy the fruits.
- Always put in your stops. If you don’t see them appear after you thought you put them it, quickly find out why!
- Have a plan and stick to it. If you are new and learnt to trade from us, stick to our plan because it is tried and tested.
- Come to us proactively. There are many channels for learning and interaction including classes, email and social media.
Reminder of what Binni told us in her trading notes
Many would wonder – if I’m trading full time, why are my trades so little? To let you know my trading style, I’m this type of trader:
- Hate to lose, but cut loss without the blink of my eye
- I have few trades, but these trades are high probability trades
- Each trade has a high winning pips
- If it’s wrong, I will definitely cut loss fast
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.