After recently doing a review of my last 6 months of trading, I recognized that my portfolio value over this period looked very similar to the Dunning–Kruger effect curve. (a psychological phenomenon that suggests people are not always the best evaluators of their own performance). The theory is often applied to trading because most retail traders experience a similar effect.
After spending 3 months of a practice simulator, I deposited real funds into a trading platform. Within the first week I saw a 24% increase which was shortly followed by loosing half my account value in the coming months. I then decided to take two weeks out and reflect on my performance. It was in these two weeks where I stumbled across an article called "5 steps to becoming a trader" (which I have linked to this post). I came to realize that I was completely incompetent. I didn't follow my trading plans, I got caught up in emotions and I was almost gambling money away in the hopes of getting rich quick.
The harsh reality is trading is hard. After a total of 9 month, I have only just managed to see a net positive return. I have spent thousands of hours only to be outperformed by an Index fund. One article won't change your performance, but these are some things that I learnt which could get you closer to conscious competence:
1. Don't trade with emotions, trade with your plan
2. Keep your risk/reward >1.75
3. Never risk enough money to loose sleep (enter each trade as if you have already lost the money you placed)
4. Reflect on performance and learn from mistakes
5. You don't need to win lots, you just need a mathematical edge
As a trader gains more experience, they become increasingly confident and more likely to see positive returns.
Stay dedicated!!!
After spending 3 months of a practice simulator, I deposited real funds into a trading platform. Within the first week I saw a 24% increase which was shortly followed by loosing half my account value in the coming months. I then decided to take two weeks out and reflect on my performance. It was in these two weeks where I stumbled across an article called "5 steps to becoming a trader" (which I have linked to this post). I came to realize that I was completely incompetent. I didn't follow my trading plans, I got caught up in emotions and I was almost gambling money away in the hopes of getting rich quick.
The harsh reality is trading is hard. After a total of 9 month, I have only just managed to see a net positive return. I have spent thousands of hours only to be outperformed by an Index fund. One article won't change your performance, but these are some things that I learnt which could get you closer to conscious competence:
1. Don't trade with emotions, trade with your plan
2. Keep your risk/reward >1.75
3. Never risk enough money to loose sleep (enter each trade as if you have already lost the money you placed)
4. Reflect on performance and learn from mistakes
5. You don't need to win lots, you just need a mathematical edge
As a trader gains more experience, they become increasingly confident and more likely to see positive returns.
Stay dedicated!!!
Comment:
www.forexfactory.com...to-becoming-a-trader
Comment:
Also, never buy a trading course. Just use a practice simulator and just scroll through trading view. Learn from others for free.