Reflections on Day Trading and Long Term Trading in the Forex Market

A short while ago I began Forex Trading,independently,from home,with an initial investment of 3000(a sum I was told was a good amount,by an experienced trader!).I battled with the markets for 6 months on a daily basis in an attempt to earn a living wage(a modest 20000 p/a).I had spent the previous 4 months learning how to read each of the many “indicators” incorporated in the software required to trade.I studied on a daily basis with an experienced trader,trying to gain the knowledge required to predict the next trend,or when to “ride” the current trend.Constant contact was maintained with traders across the globe for advice and guidence from London to Tokyo to New York.24 hours a day I monitored the markets looking for the “tell tell signs” that the markets were giving,trying to second guess what was to come.Advice came in the form of-“DONT NEWS TRADE!”,”ONLY NEWS TRADE!”,”DONT TRADE THE NON FARMS PAYROLL!”,”NON FARMS PAYROLL CAN EARN YOU A FORTUNE IN SECONDS!”,”ONLY USE ELLIOTT WAVE!”,”DONT GO NEAR ELLIOTT WAVE!”,”ALWAYS READ THE FINANCIAL CALENDER!”,etc,etc,etc!

Despite the mind numbingly boring nature of the advice and the reports and the Bloomberg channel I stuck with it for the greater good,you see my plan was to find a home based business that would net me a suitable income,yet allow me the time I needed to enjoy my life.I had heard nothing but good things from numerous traders across the world,telling me that Forex trading was the way to go with massive potential on a daily basis.How I could earn what I needed in as little as 20 minutes some days.

What I painfully came to realise was that all of the statements,warnings and promises were true!I could earn what I needed in 20 minutes,sometimes I even made enough on Monday morning before 9.30am to take the rest of the week off!But I could also lose enough by the same time,which would meen that I would have to decrease the amount of “stake” per trade,therefore I would need to trade for longer to make up that loss.I began to find that once the joy of a winning trade wore off the reality of the trading world kicked in.It seemed that it was a case of 2 steps forward and 1 step back,only the 2 forward steps were becoming few and far between!

The “guru” traders out there that teach novices like myself would have you believe that the secret to trading is being able to take the good with the bad,and that its all about positive mental attitude.This is only part of the reality.The flip side to this rapidly spinning coin is that regardless of your mental attitude,the size of your initial investment,the time you are prepared to invest,how much pressure you can withstand and your own acceptance of the fact that you may be risking a few thousand compared to the banks who are also trading at exactly the time as you at a rate of millions per trade,you must also accept the fact that the market will do what the market will do.As a small time trader you cannot influence the market in any way(no matter how loadly you scream at your monitor!).Even the banks have to band together to move the market in their favour(which they will do at any given moment,without warning you first!).

The reality is this:its gambling.Pure and simple.Addictive when you are winning,frustrating when you lose.You cant help but want to get you own back on who ever moved the market in the wrong direction.To regain your losses.

I came into Forex trading after being a Bin Man for 10 years!I had become frustrated by the effort and hours I had to put in to earn a good wage(I was a commercial waste bin man,paid a much higher wage than your typical local authority guys!).I wanted my rewards to match the effort.I wanted more time to enjoy my life before it was too late(Iam 36!).What I found was a world of empty promises(through my own doing? Not sure!).What I found was more stress than I had ever experienced!

Be warned! If you want a better life for yourself consider first what you already have! I found that maybe my life wasnt so bad after all.Maybe the reason I thought there was more out there is because I had forgotten what I had in the first place.Short of winning the lotto,you cant get that rich that quick.I have learned a valuable lesson from my time trading,I am now happier than I have been for many a year,I still dont have enough time to do the things I want to do,but I am having bags of fun trying to fit it all in!

Forex trading as an independent is merely a hobby.Do it,but have a second income stream.I was lucky enough to know when to call it a day.Remember that the smallest world event can alter the markets beyond your control and quicker than you or your chosen broker can react(most online brokers/spead betting companies freeze if the markets whipsaw!).You dont need to be a genius to trade,you just have to be clever enough to understand that you are a very very small fish in a very very big pond.

Good luck to any current traders,and the best of luck to those who have been bitten and moved on.