Forex

The sit down by u/usmaan516

This is the sit down where I discuss topics that are prevalent for new and existing traders they you need to consider and understand before attempting to learn forex.

I have been in this sub for the last 2 years and have seen the same traders post the same things over and over again. New trades asking for strategies or tips on how to be profitable or just general questions that shouldn’t really be questions.

Most of the time they are given good answers but I felt I needed to compile a list of shit all new and existing traders need to know before you start your journey

This is part 1 and I will make a part 2 and maybe part 3 later on

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Point 1: The sidebar. The most important thing you need to do is read the fucking sidebar. It has a compiled list of free shit you can learn from but it still surprises me when people ask “WhErE cAn I fInD pRoFiTaBlE sTrAtegy”. Check the sidebar, seriously, as you will find books, websites podcasts and all sorts of stuff that WILL help you. Even if you think you know it all check it out anyways. If you don’t know where it is check [this out.](https://www.reddit.com/r/Forex/wiki/index)

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Point 2: Don’t come here expecting to make $1,000,000 from a tiny deposit of $100. If I were to ask you to go to the casino with $100 and bring me back a million would you be able to? Fuck no. So why are you coming into forex with the expectation of 6 figure trading days when you only have a $500 account.

Can you turn $100 into a million? Probably. But you aren’t going to do that in a week or a month and most definitely not overnight so get rid of that mentality.

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Point 3: Treat trading like a hobby. This is the best way to approach trading. It’s not a new job you picked up or a brand new get rich opportunity but it’s a hobby just like a sport or knitting.

When you start out you know nothing and don’t really expect to make money doing it has you grow and learn you get way better and you are now able to knit really cool scarves or make insane 3 point shooters. And then you think hmmm maybe I can sell these scarves or play for a basketball team to make money from this.

You need to approach trading the same way. Your main goal to begin with is to learn and understand the markets. You need to know them like the back of your hand. You need to test, research and learn everything about forex. You need to be able to say why price just took a 100 pip shit or why [this news] made price react in the way it did. You need to know what support and resistance is and how to plot it and how to accurately and quickly analyse and breakdown price action. Once you know all that then you are able to put money on the line and follow a trading plan as you will know (from your backtesting) that “Ok price is at this support level at 104.2 and i know from my backtesting that whenever price reaches this line and makes a bullish engulfing candle at 2PM GMT there is a 96.4% chance of price moving away from this support level”. This is where you make your money but having this level of knowledge and experience takes time so don’t expect to learn this overnight.

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Point 4: The market is a whale. That’s right. That $5 trillion traded daily is a moby dick on steroids. And you as a trader are a little mosquito. Your single job is to extract a little blood here and there to keep yourself fed. If you try and take too much blood, the whale will notice and flick you off. So your job is not to bleed the whale dry but it’s to take a little here and there.

How does this translate into trading? Well firstly it’s probably a lot better to go the way the whale is going to get some blood right?! So that means you need to trade with the trend and not against it. That doesn’t mean you can’t trade counter trend but it means you will probably make a lot more trading with the trend rather than against it. Secondly, it’s a lot better to get a little profit here and there rather than trying to hold on for a lot of profit. This applies to swing traders also as even though you’re holding your positions long term it’s essential to not get greedy.

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Point 5: Education. The internet is a wonderful place with cats and porn so why not use it to your advantage. Use babypips.com and YouTube to learn. No need to pay some failed trader turned marketing pro to teach you when you can do it for free. Sure it will take longer but the money you save on education you can put into a trading account.

If you insist on finding a teacher make sure he/she is extremely transparent. Ask for trading history that can be verified (myfxbook not meta trader 4 screenshots). Also make sure you checkout the myfxbook portfolio personally as inspect element exists. Also make sure to pay with a method that means you can get your money back if you are not happy (PayPal not bank transfer). Remember you are paying for the traders time and experience so is it really worth it to pay a 22 yr old who claims he makes 100,000 a day or a 40 yr old who has traded for 30 years. It’s your money after all. Also DO NOT BUY SIGNALS. NO MATTER HOW MANY PIPS THEY PROMISE YOU ITS ALL FAKE. (If you insist on paying an Instagram educator or buying signals dm me instead and send the money to me so I can buy cocaine with it if you insist on wasting your money).

These “traders” don’t make money from trading, they make it from selling their shitty courses and from you signing up to their preferred broker [via commission motherfucker](https://memes.getyarn.io/yarn-clip/64c55a50-1bc9-4700-8226-c5dcc436f6ea).

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Point 6: Trading plans. Do you need one?

Here’s an analogy to help you understand. Go to the gym without a workout plan and train for 2 months then come back and tell me what you gained. Now go back to the gym with a workout plan and come back.

Do you think you will get ripped doing random shit everyday for 2 months or do you think you would get ripped if you went in everyday knowing exactly what exercises to do and how many sets and reps you had to do?

Obviously it’s the latter as you are consistently hitting the same muscle forcing growth whereas before your workouts were all over the place and weren’t actually doing anything for you.

You need to implement this into your trading. If you go into the markets everyday having no idea what you are looking for and just making trades for the fun of it, do you think you will actually become profitable?. If you do then close this thread and fuck off please. If you don’t then you have at least 2 brain cells to rub together and can realise that having a plan lets you know exactly what you are looking for and can help you to make the same high quality trades every time. Being a good trader means being consistent and a trading plan is the key to consistency.

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Point 7: Patience. Patience is key in this game. You could spend an entire decade in drawdown but you still need to be patient for the profitable days to come. Most traders shit themselves when they see price head down to their stop and they quickly close out their positions to prevent loss only to see price shoot up to their take profit. They don’t have patience. You could spend 6 months learning how to trade and finally get it on the 7th month but if you gave up back in month 5, you wouldn’t get them sweet pips.

The questions you need to ask yourself is “ Is the idea of forex good enough for you to eat shit(figuratively) for x amount of years in order to achieve success?”. Are you willing to endure long hours working on strategies that aren’t profitable but help you learn?. If your answer is no to these then maybe you need to rethink your choices.

In the same way you spent 3 years studying for a degree to get a job, you need to spend x amount of years learning and testing to finally be able to understand and make money from forex.

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Point 8: HoW mUcH mOnEy CaN I MaKe? This is the biggest question I see everywhere mostly asked by newbie or novice traders. I’m sure there are plenty of threads on Reddit so I’ll be blunt. The short answer, a fuck ton. Enough that you need to hire someone to count it for you.

But can I make that much? Unless you start with a small loan of $100,000,000 and can make 6% a year to make $6,000,000 then no. But you can eventually. The “pros” you see and are held accountable against who make 6% a month are able to do that due to the immense size of their accounts. They aren’t pros who are living big shot lives earning 6% of $1000 a month but instead they are earning 6% of a $1,000,000 account a month which equates to $60,000 a month.

You and your $1000 account will be able to manage returns, percentage wise, that are higher than that but when you have a million trading account, your main concern is capital preservation for the long term and not making 100M from that 1M.

In short there is plenty of money to be made but you need to be patient and have a large trading account. If your concern is money then you need to look long term not short term. Don’t come into forex expecting to pay your rent on Friday cos you WILL lose your money but instead look at eventually taking over your job with forex income.

Newbies DO NOT misunderstand this and think that you can take $100 to a million in a short amount of time. You require a high amount of self discipline to even consider doing this and you can’t expect to be a millionaire if you are still closing positions before they hit your stop because you’re scared.

Think of it as a job. You are now in an entry level position earning $0 but you are learning the industry. As your knowledge increases, so does your paycheck and when you have many years of experience under your belt, then and only then can you start making the big bucks.

You can’t expect to go from a trainee to CEO in a week so why expect to do the same in forex.

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This is enough for now but I will be back for part 2. I don’t care if you read this or not but this is for the newbie traders of now and the future.

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