Walk Before You Can Run
In this weekly video:
00:21 – Our goal is to be profitable
00:58 – Start slowly and then your trading will be better long term
01:40 – Begin with a demo account
02:50 – When you change to a live account, trade the same way
03:16 – Trading account up +7.4% in 3 weeks
04:50 – Forget making money when you start trading
You need to be able to walk before you can run as a Forex trader. Let's talk about that and more right now.
Hi Forex traders, Andrew Mitchem here, the Forex Trading Coach video and podcast number 253. Now as a trader, our aim, our bigger picture and goal, is to be profitable, is to make lots of money from our trading. Okay? That's obvious.
Our goal is to be profitable
State the obvious first. But the problem is that a lot of traders have that goal in mind right now and try to achieve that right now, even though they're just starting. And it's a big problem and almost everybody does it. But if I can give you some help and some tips and advice from my experience both from myself and all the people, thousands of traders all around the world that I've taught over the years, it would be this. Learn to walk before you can run. You've obviously heard that phrase in so many different aspects of life and in trading unfortunately it's exactly the same. It really is important that you do that.
Start slowly and then your trading will be better long term
It's important that you start small. You see everybody wants to make money and everybody wants to pay the bills, give up their job, go and live remotely and work and create an income from their trading. And yes you can do that, but you are not going to do that at the beginning or near the beginning of your trading career. It's gonna take you several years to get to at least that level. So don't try to do it earlier because almost certainly not gonna happen.
And you need to start small and you need to start on a demo account. You need to understand your strategy that you're trading, the methodology behind it and be methodical with your trading.
Begin with a demo account
Don't just think, “Oh it's a demo account and therefore I don't really care if it takes a loss or I don't really care it's still open over the weekend” if your plan is to shut trades before the weekend. Don't do that. Use your demo account to make mistakes that you're gonna make with money management and placing stock losses and profit targets and position sizing wrong, all that type of thing. And then once you've understood that, get onto a live account but make it a small live account.
By the way your demo needs to be a small demo account as well. Don't go opening an account of 50 or 100,000 dollars of a demo account, because that's what the brokers want you to do but that's what you should not do. You should open a small demo account because when you make that transition to a live account, you're likely to be opening a small live account. Most people that open an account maybe 5,000, maybe 10,000 dollars. But probably not a lot more as your initial starting balance. And so make sure that your demo account's similar. Make sure it's quite small.
When you change to a live account, trade the same way
So when you go to live. What are you gonna do different? if you've been profitable on a demo? The answer is nothing. You should continue to trade the same way. Continue to trade small risk and have controlled risk. But it's really important that you get this right because if you get this right and you do take your time and you do almost become a bit boring with your trading, long term it will pay off completely.
Trading account up +7.4% in 3 weeks
Give you an example. About a month ago Pepperstone, the broker, closed down in New Zealand. And three weeks ago I opened a new Blueberry live account which is a broker in Australia who I use. Very good by the way, so I highly recommend Blueberry. And with the Blueberry account it's been open just under three weeks now and I‘m up 7.4% on the live account. 7.4% gain. And it just shows what can be achieved after some time.
Now I'm doing this with a really really low risk because I'm managing through a fund managing company that I partially own. I'm managing a lot of money behind the scenes, so we're keeping risk and draw down very very low. I could quite easily double the risk and still be very very low risk and that be up sort of what 14.8%, but I'm not, I'm up 7.4%. And I'm up very good consistent gains with very very tiny draw downs, and that's all on a live account in under three weeks. So it shows what can be achieved once you put that effort in upfront and that time and that dedication upfront, it does work.
So I hope that helps, it really is … In some ways a lot of people don't like a lesson like this because unfortunately it's truthful and it means you do need to spend some time upfront but it really is worth it longer picture. And after all, like I said at the beginning, we're all in Forex training to make money out of the markets.
Forget making money when you start trading
It's no good having a million dollars in your account right now not knowing how to trade, you're gonna lose money. Absolute certainty. So forget the money that you're making right now, look to have a small account and make a small consistent percentage gain on that account over time, because if you can do that on a small account, absolutely you can do that on a bigger account. And then the money will follow, but don't think about your monetary gains and right now at the very beginning if you're new to trading.
So hope that helps. This is Andrew Mitchem, the Forex Trading Coach, and I look forward to talking to you this time next week with some more trading tips and information. Bye for now.