Don't be Too Smart. Are You Using a Trading System? Final Thoughts. Gil reveals his journey from Forex wannabe to accomplished trader, and what he learned along the way that can help you navigate the same path. Why I Started Trading Forex In , aged just sixteen, I left school and had no particular career in mind. I was, though, attracted to the hustle and bustle of the City of London, where fortunes were made and lost every day.

I was intrigued. For many of those participating on these trading floors, performance was very much dependent on what you knew, whom you knew, and how much risk you were willing to take. Thirty years later, the objectives and principles remain the same, but the playing field has changed dramatically.

Today, trading performance is governed more by speed, technology, and information. By , open outcry trading floors were slowly becoming a thing of the past. Breakthroughs in technology paved the way for a new, robust, secure, and more efficient means of trading.

Advances in computer software and hardware meant that you no longer needed to call a broker or search through a newspaper to find out the price of a particular currency or stock, it was all there live on screen, updating within milliseconds and free for anyone with access to view and trade.

Trading had now entered a new era. Professional traders were now sitting in front of computers in offices, the game had changed, the dynamics had shifted, and suddenly anyone with a screen and a broker could play.

In I decided that I wanted in. Trading in the pit early s — taken from cnbc. There are several reasons for this: Markets are Constantly Evolving - What worked yesterday can be a disaster tomorrow.

Humans are Uniquely Different - What suits and works for one personality could be a nightmare for another. Secrecy - If you found a winning formula that was consistently paying you, would you really rush to share it with others?

Lessons can be helpful , however the only real way to truly learn is to go it alone and try to do it yourself. This itself will teach you a lot. Over the years, experience taught me that the key to mastering the art and science of trading lies in focusing on the inner game.

In any given trade you can be right or wrong. Even a successful trader will be wrong quite often. Therefore, a major challenge is how you deal with these outcomes. One of the most valuable lessons you will learn is ultimately your true personality under pressure, and the best way to do that is to use, keep and update a forex diary. Keeping a Forex Diary Early on in my trading career, I was fully aware of the importance of writing things down.

However, in those early days, my eyes were fixed on my screens trying to anticipate the next move and how I could capitalize on it. There was so much going on that I had sidestepped this simple task of logging my trades with a few words.

Instead, I chose to focus on my Profit and Loss , which I saw as the ultimate barometer of my performance. What I did not realize is that none of this information was telling me anything about me. It was quite long into my forex trading journey that I decided to start keeping a trading diary.

Learning this trait about my trading personality was ultimately more useful in becoming profitable than learning about moving averages or keltner channels. By keeping a forex diary, you will generate information about your personality and how you react to changing market conditions, data that is enormously valuable and that nobody else can give you.

Psychological Breakthroughs on My Trading Journey There is No Holy Grail Get used to being wrong. Get comfortable with being wrong. The most successful traders out there are wrong much or even most of the time.

What separates them from the crowd is that they know how to maximize their gains when they are right. This concept sounds simple but is very hard to master. Make a Proven Trading System Your Own Once I realized that no system will always be right , I focused on making a system my own.

You may want to add or edit an indicator. You may feel like the system you are looking at would work better if combined with some fundamental analysis or the other way around. You might prefer to use one trading platform rather than another in conjunction with your trading system. Being light and nimble will enable you to change your mind rapidly, a unique quality that is often underestimated as a factor in trading success.

Markets tend to lead you down one trail of thought until you are almost convinced of your opinion, only to unexpectedly act unpredictably and do the opposite of what you thought was going to happen. All the information you really need is contained in price and volume. Why not enjoy the luxury of letting the market tell you what to do, rather than making it the other way around? I convinced myself that I was using a system when I was not really.

The system I thought I had was in my brain, and really it was a sketchy set of rules. Remember, a good trading strategy does not have to be complicated: the simpler it is, the less can go wrong. Whatever your trading system is, just make sure that you can write it down. If you cannot write your system down in plain English, then you do not really have one. Often the most complex problems require very simple solution. Trade a system Prepare and Plan. The fewer decisions you have to make during the action, the less emotional you will be.

Make sure that the system is compatible with your personality Using a system that bores or overwhelms you is not a good idea.

Find a system that suits you, that way, you will be able to stick to it. I've categorized these stages based on my personal experiences.

So when you're a beginner trader, you aren't really an expert in something; you are just an expert in blowing up accounts. In this stage, I was blowing up different accounts.

When I started, I was going through a lot of pieces of trainings, seminars, and courses. As a result, I was overloaded with unnecessary information. My trading charts were full of different indicators that you can't even see the candlesticks on the screen.

As a beginner, you are super excited. You envision yourself living in a mansion with the Maserati and yacht lifestyle, dreaming of quitting your job next month. Take your family to travel around the world by the end of the year, which is a bit unrealistic. Whether it's a demo or live account, your trades need to be driven off fear, greed, overconfidence, and fear of missing out.

These are all the mistakes that I've committed, and I want you to avoid them in your beginner stage. Don't go after attending online seminars to find the secret formula or find the Holy Grail that doesn't even exist. There's one golden investment rule: Never invest more than that you can't afford to lose. So I was going through this cycle as a beginner.

Getting information-overloaded and then blowing up accounts. Most people just quit at this stage, without putting in hours of practice and hard work with patience. They have unrealistic expectations, but then reality hits. If you are at a beginner stage, your aim should not be to achieve a million dollars by the end of this year. Only one purpose, one goal at a time; in other words, avoid blowing up accounts as much as you can.

After learning from my beginner stage, I started my intermediate level or step 2. Where I stopped blowing up accounts or let's say I was making fewer mistakes as compared to my beginner stage. Because you realize: The Holy Grail doesn't exist, why not just focus on one thing.

So at this stage, you also have more realistic expectations. You start to set a more practical and decent ROI Return on Investment target rather than one thousand percent a year. Even at the intermediate stage, I realized that emotions still drove my trades. Some of the trade decisions were also forced by rational thinking, meaning you have a mixture of both. So when you become an intermediate, it's again not to achieve millionaire status right away.

Your aim at this stage should be to focus on breaking-even. Now, you want to take your account back to your initial capital. Break-even, refers to the point where gains equal losses. Here is the thing, most traders lose money anyway, which means that their ROI Return on Investment is negative. As you are coming from the beginner stage, your capital is always less than your initial starting capital. More than half of the traders are able to break-even at the intermediate level. Again, it's also where a lot of traders quit because they aim to get a job.

They realize that there's not even break-even yet, which increases their frustration level. Because they don't see any money coming in, they get discouraged, and then they give up. When you start trading and lose money, it's not that you are a bad trader. Unless your strategy or your broker sucks, and you change that. But then you're consistently working on your strategy and mindset, and you're always sticking to one system and focusing on one thing at a time.

Trying to learn everything about trading won't increase your profits. You should MASTER one strategy at a time. That is proven; you should understand that this is all part of the journey and the process.

Beginners have to go through the first two stages. Many traders lose money because they rush the whole thing; they try to skip steps one and two thinking that they can be an expert trader on the first day.

It's like when in college, after the first week of lectures, you go to the professor and ask, how come I'm not an engineer yet.? The same thing in forex, you get a graduate education, and one of the fast ways of learning is to learn from your mistakes. If you skip the first two stages, what do you have to learn from?

I'm not saying that the forex journey will not be easier. But You need to go in a flow. When I entered stage three of my forex trading journey, I was an advanced trader, consistently making a positive ROI Return on Investment.

Bear in mind that even some pro traders at the end of the year might have a negative ROI, but in the long term, you'll be able to generate a positive ROI consistently. Pro Traders Focus More on Capital Preservation Rather Than Massive Capital Growth.

So when you're at this stage, you're trained with the mindset of how the pro traders trade, which is capital preservation. Protect your account as much as you can with proper risk management strategies. When you take care of risk, profit will take care of itself. I am assuming that you have learned from all the mistakes from your trading journey. If you haven't, after multiple hits and slaps, if you're still not learning from mistakes, then trading is not for you. As an advanced trader, I was trading rationally, avoiding all the past trading mistakes.

You start to generate a positive ROI by the end of every year, but that doesn't mean you need to stop growing. Even if all the hedge fund firms want you to trade for them, you should continue learning every day. Now, if you're OK with stage three Advanced Trader Stage , you can stop there with ten to twenty percent ROI per year.

If you want to take your trading game to the next level, this stage is for you. So when you reach the expert level, you start to trade with a bigger picture in mind. What do I mean by that? You begin to understand how economic situations might affect your trades in the long run.

You keep an eye on the stock market movements. At this stage, you'll be able to go either part-time or full-time as a trader. And this is the time when the top trading firms, hedge funds, will approach you.

Sometimes you might be approached to do a speech at a conference, workshop, or seminar where you'll be sharing your experience.

And, of course, when you're at the expert level, not only would you be able to trade rationally, you would have this extra edge of having the gut feelings.

That you know with confidence, this trade might not work out. That's very different from gambling, don't confuse gambling with your gut feelings.

In this article, I will go over how a five-hundred-dollar investment made me into a six-figure trader. When I tell this story, I feel that it will be relatable for a lot of you. I have been through a very long development process into who I am today. It all started about seven years ago. I was 20 years old at that time, and I was just at a point in my life where I used to be the average year-old. I was hanging out with the wrong people.

I was partying a lot. I was drinking a lot. I was doing dumb things. My father was about to kick me out of the house, and he said, you need to change your ways, and you need to look for work. So, of course, I went to look for a job at a lot of places. I went to McDonald's, Marshalls, and Macy's. I even went to rouse the grocery store. And that's where I thought I had my breakthrough. But I can honestly say, I am happy that I didn't get that job and I failed.

I came to a realization that where I stand in my life? Who I'm trying to pretend? I need to take time to self-develop. Then I started surrounding myself with better mentors and people who were successful in their lives and I learned many things about myself. That's one thing a lot of you need to realize that you are who you surround yourself with. Birds of the same feather flock together. I was flocking with the wrong people. I was just living in the moment. You're going to have trials and errors in your life.

We're thinking of these failures as devastation like its end of the world. We have to use these mistakes as learning lessons. So that's exactly what I did. I started self-development, trying to find myself, trying to be a person of value in the marketplace.

And That's when I found FOREX. From the very beginning, I wanted to learn how to trade forex at a high level. I invested a few hundred dollars in learning forex properly. I took one of the best courses out there that are no longer available, and it literally revolutionized everything.

I learned how to trade forex. I used all those strategies that I have learned and developed my own strategy from trials and errors, while trying to trade independently. Over time, I developed a couple of strategies that worked for me. And I was like, wait, if I'm now making money in forex, I'm doing good, I want to start teaching others how to trade as well, and I taught a couple of my close friends how to do it.

How I became an expert trader? I've been through four stages in my forex trading journey. I've categorized these stages based on my personal experiences. So when you're a beginner trader, you aren't really an expert in something; you are just an expert in blowing up accounts. In this stage, I was blowing up different accounts. When I started, I was going through a lot of pieces of trainings, seminars, and courses. As a result, I was overloaded with unnecessary information.

My trading charts were full of different indicators that you can't even see the candlesticks on the screen. As a beginner, you are super excited.

You envision yourself living in a mansion with the Maserati and yacht lifestyle, dreaming of quitting your job next month. Take your family to travel around the world by the end of the year, which is a bit unrealistic. Whether it's a demo or live account, your trades need to be driven off fear, greed, overconfidence, and fear of missing out.

These are all the mistakes that I've committed, and I want you to avoid them in your beginner stage. Don't go after attending online seminars to find the secret formula or find the Holy Grail that doesn't even exist.

There's one golden investment rule: Never invest more than that you can't afford to lose. So I was going through this cycle as a beginner.

Getting information-overloaded and then blowing up accounts. Most people just quit at this stage, without putting in hours of practice and hard work with patience. They have unrealistic expectations, but then reality hits. If you are at a beginner stage, your aim should not be to achieve a million dollars by the end of this year. Only one purpose, one goal at a time; in other words, avoid blowing up accounts as much as you can.

After learning from my beginner stage, I started my intermediate level or step 2. Where I stopped blowing up accounts or let's say I was making fewer mistakes as compared to my beginner stage. Because you realize: The Holy Grail doesn't exist, why not just focus on one thing.

So at this stage, you also have more realistic expectations. You start to set a more practical and decent ROI Return on Investment target rather than one thousand percent a year. Even at the intermediate stage, I realized that emotions still drove my trades. Some of the trade decisions were also forced by rational thinking, meaning you have a mixture of both. So when you become an intermediate, it's again not to achieve millionaire status right away. Your aim at this stage should be to focus on breaking-even.

Now, you want to take your account back to your initial capital. Break-even, refers to the point where gains equal losses. Here is the thing, most traders lose money anyway, which means that their ROI Return on Investment is negative.

As you are coming from the beginner stage, your capital is always less than your initial starting capital. More than half of the traders are able to break-even at the intermediate level.

Again, it's also where a lot of traders quit because they aim to get a job. They realize that there's not even break-even yet, which increases their frustration level. Because they don't see any money coming in, they get discouraged, and then they give up. When you start trading and lose money, it's not that you are a bad trader. Unless your strategy or your broker sucks, and you change that. But then you're consistently working on your strategy and mindset, and you're always sticking to one system and focusing on one thing at a time.

Trying to learn everything about trading won't increase your profits. You should MASTER one strategy at a time. That is proven; you should understand that this is all part of the journey and the process. Beginners have to go through the first two stages. Many traders lose money because they rush the whole thing; they try to skip steps one and two thinking that they can be an expert trader on the first day.

It's like when in college, after the first week of lectures, you go to the professor and ask, how come I'm not an engineer yet.? The same thing in forex, you get a graduate education, and one of the fast ways of learning is to learn from your mistakes. If you skip the first two stages, what do you have to learn from? I'm not saying that the forex journey will not be easier. But You need to go in a flow. When I entered stage three of my forex trading journey, I was an advanced trader, consistently making a positive ROI Return on Investment.

Bear in mind that even some pro traders at the end of the year might have a negative ROI, but in the long term, you'll be able to generate a positive ROI consistently. Pro Traders Focus More on Capital Preservation Rather Than Massive Capital Growth. So when you're at this stage, you're trained with the mindset of how the pro traders trade, which is capital preservation.

Protect your account as much as you can with proper risk management strategies. When you take care of risk, profit will take care of itself.

I am assuming that you have learned from all the mistakes from your trading journey. If you haven't, after multiple hits and slaps, if you're still not learning from mistakes, then trading is not for you. As an advanced trader, I was trading rationally, avoiding all the past trading mistakes.

You start to generate a positive ROI by the end of every year, but that doesn't mean you need to stop growing. Even if all the hedge fund firms want you to trade for them, you should continue learning every day.

Now, if you're OK with stage three Advanced Trader Stage , you can stop there with ten to twenty percent ROI per year.

That's very different from gambling, don't confuse gambling with your gut feelings. c Greater creative and business freedom to the authors who can in turn provide greater options to the readers. As price approaches these historic support and resistance levels we should be getting ready to observe the valuable clues that the market is offering. The blue ema is what Mr. The 4 Hour chart is my personal favorite to trade from. The team is made up of CEO Josef Marc, COO Antons Sapriko, and CTO Yuri Pimenov.

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