The “Holy Grail” of Forex Trading
Is there one? I believe there is and I think it spits in the face of just about everything you ever heard. Those at the top never got there by following the crowd, you know. Some of you may know that I like Kung Fu and Bruce Lee as well. One thing he said about being like water really hit me. I have totally believed in his statement about “I don’t believe in styles, styles separate men.” This comes from a man who studied 21 forms of martial arts. They are all so different with their techniques and strategies. Traders are the same way. One uses one strategy and another uses another. In fact there are probably hundreds of different strategies taught all over the world if you put them together. But, really, what is a strategy? Isn’t it anything more than looking at a chart and devising a way to take money out of the market?
Over the years, I read just about every book ever written on the subject of trading and many of them 2 to 5 times. I watched every DVD I could get my hands on. I paid $10K to a guru once for a two week course. But more importantly, I have been trading for 17 years and the last 11 full time on the Forex Markets. I ran a few trade rooms for 6 years and had the care of 138 traders at one point. I spent the last two years trading all alone but up to 16 hours a day. I have a secret for you. I believe there is a secret to trading! Once you watch 8 monitors and perhaps 30 to 40 charts all day long (and I don’t mean casually watching, as in you’re not paying attention… but I mean really watching them and calculating and thinking about every single move), something does indeed happen to you over all that time. Eventually, you are simply 100% in tune. Well, maybe not 100% of the time, no, but very often just incredibly in tune with what is going on. Mark Douglas called it trading in the zone.
After hearing news and watching the reactions and doing this for 10 years on end, you eventually can just about tell which way a coming news release is going to go. And if you cannot figure it out before hand, once the numbers are released or the talking head makes their speech, you can basically tell what is about to happen. Why is this? Your finger is basically on the “pulse” of the market day in and day out. And you just “know” in a sense the most likely moves based upon experience.
So one “tooth” on the key to forex is experience and this comes with time; simply sitting in front of the screen, watching actively and thinking. It may not be easy… but is anything? And knowing you can make millions, I would ask you, is it not worth it?
Have you ever heard the expression “in order to thrive you must survive”? This is another key and it seems so easy to me and yet it’s so hard for everyone to get. Why do you have to lose big? Why are you in such a hurry to get rich? It seems like everyone wants everything and wants it right now! If you want to gamble go to Vegas and do that. It’s not wise to put 10K, 20K or more into an account and go nuts on it. Leverage kills. Everyone wants to “bet the farm” on one trade and make a killing. And you know what that leads to; to the need to be “right”. You feel agony over your entries and exits, feeling the need to know the exact numbers you should be in or out. You cannot even tolerate a 10 or 20 pip move against you! Think about it. You’re simply trading too darn big and you’re not thinking like the Market Maker. I really cannot understand how folks in forex land cannot get this. Always quoting: “never add to a losing position” as if this is good advice and as if everyone is a trading God. Everyone just happens to be so great they can pick ultimate tops and bottoms. huh? Wow. I bow to these people.
Guess what? Guess what I believe? I believe, like Mark Douglas said in his book Trading in the Zone, “We know nothing for sure, and we don’t have to in order to make money”. I was in a few stock trading rooms these last few years. I saw the way they traded. They were always scaling into or out of trades and putting on “feeler” entries that were small. They were trading like market makers and they did very well. But forex traders want to take stops all the time because they trade like fools! I don’t get it. Folks, I am telling you right now, if you will drop your size down to a laughable .01 per bullet fired and learn how to collect small pips on scalps all day and slightly larger pips on intraday swings all day, you’re going to go to 20% to 50% growth a month very quickly… and all on trading like a baby.
You don’t have to “go big or go home”. Don’t let anyone sell you that. That is garbage. Once you can prove to yourself and the world that you can make hundreds and hundreds of pips a day/week then you can climb the ladder and go up the next rung! Never, ever cheat yourself by jumping from .01 to .10 and then to 1.0. You have not given yourself the time to deal with the psychology of trading small and proper. Start at .01 and after a week or more go to .02 and then weeks later go to .03 and if you just keep going like that you can be a millionaire in a few short years. In order to thrive you must survive and you cannot survive by blowing out your account!
This is the Holy Grail in my eyes; trading so small that nothing can hurt you, being diversified, so that no single trade can break you. Do this and ye shall live.