Even if you don’t trade Forex, realize there is still plenty of great stuff in this discussion from a general trading experience perspective. Our guest today, “MJ” as he goes by him the community, has been through much on his forex trading journey and he is still going strong! One of my favorite parts (and a great example/reminder for us all) of the interview was how the voices in his head tricked him into practicing in a very irrational way. Sure, maybe you or I would never do something like that, but it brings up the valid thought of, “maybe I’m doing this somewhere else in my approach to the markets?” This of course is just a sampling of one of the many rabbit holes we venture down, and I assure you there are plenty of other valuable conversations too. Give it a listen, you’ll be glad you did.
Notes:
Today we interview community member MJ. His grandfather traded in the market and offered to teach him. Unfortunately this did not work out too well for him but he attributes that failure due to being unfamiliar with the emotions attached when money is on the line.
While analyzing the strategy in depth, MJ realized this did not work best for him. He went back to paper trading but was doing it in an unrealistic way that utilized hindsight and cherry picking why he would pass on losers and take winners.
After discussing with his wife, MJ joined the University program and got through many courses multiple times. He also decided to move from futures trading to forex trading. After trading on a very short tick chart for futures, he is really enjoying trading the 4 hour chart for forex. This also works well considering he has a full time job.
He monitors 20 major pairs but does not trade them all. MJ has found that the spreads are more favorable throughout the US session and generally avoids the European and Asian market hours.
Quotes:
My grandfather actually traded. He mentioned how effective his system was and it could replace my income so that’s where it started.
I paper traded and paper traded and paper traded however I was lying to myself because I’d start at the far right edge and work backwards.
If I can’t afford to put this money in the trash can and set it on fire then I can’t afford to trade with it.
I keep my risk so small that if I lose the trade it makes no difference. Having money on the line makes me focus.
Often I look back and realize I did not screw up my analysis. I was just wrong. When you take a loss it’s the cost of doing business.
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