Forex education

Nothing going on in the market so let me share some of my experiences from the last two years. As many of you know, I’ve been running my own professional services business with a primary focus on generating funding for emerging trading talent. The interbank market isn’t training the new generation of traders anymore, they are coming from the retail ranks.

I am managing 2 main programs with around 20 traders in total funded and obviously we have gone through quite a few more over this period. I have unearthed 1 really good trader in this time with 2 more showing a lot of talent. But the mistakes made by traders are almost universal:

  • Continuing to trade and even increasing risk once they hit a losing patch. This one makes me want to rip my hair out! Surely the sensible thing to do when you start mis-reading or mis-timing the market is to reduce risk and reduce number of trades until you start picking it better again? It may be the sensible thing to do but it’s definitely not the instinctive human reaction. The majority of traders try to trade their way out of slumps and this inevitable ends in tears.
  • The age-old cliche of not running good trades far enough and letting losing trades run too far. Every trader bar none knows that they should not do this yet they do! Some have patience and killer instinct, but they are the overwhelming minority.

The trader who has done really well has shown an uncanny ability to know when to increase his risk. I know most ‘experts’ will tell you that trading is all about managing your downside but the really successful traders (and they are few and far between) also have the ability to hit for the fences when they are in a position to do so.