You know the dream, right? Gazing out at the sunset from your penthouse apartment on the 50th floor of the swankiest building in the city as you contemplate the latest developments in the global markets. After an exhilarating workout in your own private gym, a hearty meal, and a glass of wine that costs more than most people’s cars, you sit down at your trading station. The screens around you glow with information about the economies of six continents as you check the markets. The yen is down but the pound is still holding steady. Your fingers begin tapping the keyboard as you enter the first trade of the night. You know just what you’re going to do…because you’re a trading ninja!
So, ready to start living that dream?
Yeah, me too.
Splash! That was me throwing some cold water on you. Time to wake up. Let’s talk reality.
Sure, you could get there (or to whatever your own personal vision of success is) at some point. But it’s not going to happen overnight, or even in the next year. Not, that is, unless you’re extremely (and I mean extremely) lucky or you’re some kind of super genius. In either one of those cases, you don’t need my help, because I’m neither lucky nor a genius.
What I am is someone who has traded in several different markets (stocks, bonds, options, and currencies) since the 1980s. And I had (and still have) that dream. But what I found is that it’s a lot more work than most people imagine. I found that making consistent profits takes a lot of study and persistence. I found that even if you’re profitable, you can’t live on your profits unless your trading account is worth at least six figures (and mine never was). I found that it’s hard to keep building up your trading account when life keeps getting in the way.
In the late 80s I had a plan for building a fixed income portfolio over a period of 10 to 20 years that would match and eventually exceed my salary as a civil engineer. Except that my engineering job evaporated in a real estate crash that hit the northeast around that time. So much for my dream of being financially independent by age 40.
In the mid 90s, I began building a portfolio of growth stocks that included Novell Networks among others. I liquidated that account to pay for car repairs.
In the late 90s, while working at Fidelity Investments, I began using William O’Neil’s CANSLIM method and his newspaper, Investor’s Business Daily, to pick stocks. This worked pretty well, until another layoff came. I switched to trading Bulletin Board stocks full time and managed to average just under 10% each month. But that wasn’t enough to pay the bills, so that account was eventually gone as well.
Since I discovered retail forex in 2004, I’ve managed to blow up a couple of small accounts during the learning process. I liquidated a larger profitable account when I was between jobs and needed the cash.
And don’t even talk to me about the missed opportunity to be an early adopter of BitCoin.
Get the picture?
I’m not complaining; I’m telling you all this right off the bat to make a few points before we get you started down the road to being a forex trader. If you can avoid some of the mistakes I made, you’ll probably end up getting to that dream a lot faster than I will.
- Keep your job and stay financially stable while building your account. If you don’t, being profitable won’t matter, You’ll constantly be emptying out your account for each emergency that comes along.
- Be realistic about your trading goals. If you could double your money every month consistently, starting with just $1000, you’d be able to buy the whole planet in less than a decade (that’s not an exaggeration by the way…do the math). That’s not going to happen. As I write this, my trading account is up about 51% over the course of about nine months, and I’m frankly surprised that I’m doing even that well.
- Understand that trading, like every other skill, involves a learning process that can often be frustrating. I hope the research and tools on this site makes that process smoother for you, but everyone still has to work through the challenges in their own way. Here’s a great description of the development of a successful trader.
So don’t give up on the dream. It’s very possible to make it a reality. All you have to do is be realisitc about it and be willing to do the work.
So get ready to…keep pipping up!
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