It is a beautiful beginning of Spring here in the sunny south of Africa, and I have spent some time today at the beach, swimming and celebrating life on this full moon moment around now. Life is looking up particularly since we have been so hectically down until now, so far this year. And at this turning point I want to share with you how my current training at day trading has been going for me.
Day trading forex, commodities and cryptocurrency can be a steep learning curve. And it helps to practice on a demo account. I have been teaching myself, via all the free info on the internet. However, the best teacher is live trading. Demo accounts are good, but you must not get too used to them. This is because it is only on the live trading account, when your own money is on the line, that you learn the best.
I use very small amounts of my own money, and in that way the early mistakes I make will be tough but not too tough to handle. It is like sparing in the karate dojo, or boxing ring. Sometimes you get a hard knock, or you get thrown to the floor, so to speak. However, these falls or fails or losses in the early days of training as a trader are to be expected.
The initial losses are our best teachers. I have learned a lot this week. I tried to trade gold on the intraday chart, but volatility is so massive that one must use a stop loss. I have been lazy to set stop losses and I paid the price a few times. Now, however, I am a definite stop loss user. I learned that lesson this week, the hard way. So I write about it so that you can all learn from my mistakes. Use a stop loss and just make sure that your risk/reward ratio is in your favor. The ratio should be at least 1:1 but obviously it would be much better the higher the reward is, compared to the risk. Perhaps 1:2 or more is preferable.
So I have left gold for a while and the small timeframe I was trying to trade. Thereafter I have now moved to training on my demo account as well as my live account but I am trading forex. Also my lots were too high, meaning my trade was too aggressive. I am too greedy to earn a profit and so I risk too much.
Now I no longer look for sniping opportunities on the 5 Min chart and I rather look for swing trades on the 1Hour chart among the forex pairs. This is still intraday, or day trading but it occurs over a few hours between buy and sell, so to speak, or open and close of long or short trade.
Besides that, I have set my lots or buy in at much less than usual Right now I have already lost a few trades due to being too greedy and too sloppy or lazy with my “balance protection”. Trading as a winner consistently is not only about making winning trades but also about preventing big losing trades. I was making a few small profits on some trades, but it only took one serious loss to wipe them all out, and ruin my success rate for the day. That was due to the lack of stop loss.
Sometimes the price is going to go against you and you need to get used to taking small losses repeatedly, yet avoiding the one or two big losses that ruin everything. So the lessons I learned this past week or two have been embedded in my mind due to live experience, and that is where the learning curve is all good. It is ok to take losses. Those are the best lessons I have learned as a trader.
And determination to succeed is ever present. That is a psychological strength that a trader needs if you want to become profitable with time. Don’t be put off by a year or two of heard lessons. Just make them small losses each time by using a small account of small buy in for each trade, without expecting to get rich overnight. The allure is irresistible but there is no easy way to do it. Trading takes years of time in the markets, watching and learning the ways of price action.
Another lesson for me this week is that moving average indicators like the 21 period and the 200 period are useful And the other indicators like the MACD, RSI and Stochastic are actually not so useful to me personally for now. They are lagging indicators and less valuable than the EMAs and literal price action itself. By that I mean the movement of price, as well as the candlestick patterns. There is such a vast amount of data to assimilate and use as info to make informed decisions on when to enter or exit a trade. It can be mind-boggling.
Still I find it fascinating, and I will be more reserved now, making small trades to test my strategy. If I get enough winning trades, then I know the strategy works, and then I will up the buy in amount. But for now it is first protect my current capital, and then later see if some profit comes. It’s a great learning curve and much better overall than gaming.
I still learn strategy as a trader, like I used to love in the gaming platforms, but now it more meaningful. I am testing myself, training my wits, and with time I am actually improving in the psychological mindset as well as the technical analysis skills to really master this art. Go for it if you have the mentality, and learn from those who have gone before. You too can earn a living as a trader if you really wish to.
Congratulations on having the heart to start Julian.
I've been hoping to start too so I can earn extra income as the only way I invest in altcoins is primarily on some fundamental analysis and hype. Once I've seen enough profits, I swap the alt to bitcoin on ChangeNOW and then begin my hunt for another alt.
Learning technical analysis would have greatly helped my decision making skills.
I wish you goodluck too. Keep us updated on your journey 😁😁
Thanks friend. I taught myself mostly from youtube videos and sites like Investopedia for technical analysis. Trading in and out of alts and even stable coins is a valuable opportunity since the alts are more volatile when traded against btc especially. I spent the last two years or more absorbed in TA studies as my brain likes the pattern recognition and symbols and graphs, etc.
And now with the bull market, it is the best time to trade, much better when the overall trend is upward longterm like this year and next. I was trading like that on Binance, though there are other crypto exchanges too.