JasperForex

10 key things I learned in my short trading career

FX:EURUSD   Euro Fx/U.S. Dollar
1. As a novice trader, one of the biggest mistakes you can make, especially after having had a number of successful trades, is thinking you know what you are doing when you actually don´t. This will be the cause of every trading error you have the potential to make.

2. It takes absolutely no skill at all to place a winning trade. It does to consistently do it.

3. Be unoriginal. Save the innovative strategies and custom indicators for when you have learned how to trade.

4. Do not judge a trade on its result. A good trade can turn out a loser. A bad trade can turn out a winner.

5. Don’t focus too much on making money in the beginning. As you are still improving, it should not be your goal to make money. It should be your goal to make good trades.

6. In trading, there is no supervisor or manager reviewing every decision before it’s made. Success, for better or worse, is totally self-dependent. This is not for everybody. Find out if it’s for you.

7. Though this site has many of its members emphasizing on technical analysis , don’t underestimate the impact of fundamentals on price action. Understanding them will increase your edge in trading.

8. Don’t overemphasize the importance of finding the best trading system. Equally important are psychology and money management.

9. Online chat rooms can be good learning tools and from time to time very entertaining, but beware of entering trades that are not part of your trading plan or trade setups that you have not studied for yourself.

10. Eliminate your mistakes. Do this on a daily basis, mistake per mistake. Eventually you will run out of mistakes to make.
You don´t need to be a weatherman to know which way the wind blows - B. Dylan
I also agree with every word Jasper. The main one I am focusing my attention to on a daily basis is number 10.

If I made 3 less mistakes yesterday, I would've saved half my pips :)

Great post!
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JasperForex PRO StarProsper
So true! Thank you for responding.
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These are really good tips. So far i have not had an big losses *knock on wood* but that doesnt mean that my trading plan is the best it could all just be luckfor now. I should be more careful and not get too cocky thinking i can never lose
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I think that is the right attitude to have. Be confident, but keep reviewing everything you do to try and weed out any potential flaws / trading errors you might still be making. I know I make plenty still!
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Very good tips :) Awesome!
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Thank you for saying so.
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Loves this, I think that the list of "things to consider" can go to hundreds.. I like all of your list, but the first one is my favorite, the markets always wakes us up when we imagine that we are the unbeatable masters .. Its always great to be humble when trading...
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Haha yes I agree, I actually had 18 things to begin with but I tried not to redo anything you had already covered in your excellent post. Everyone could make their own list, based on their experience and thing they learned. I love the intellectual collectivism of this website!
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GREAT!!!
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JasperForex PRO diegomuscia
Glad you like it.
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GR8
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I hope it helps in some way, thanks for responding.
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Really this was great.. i learnt many things from your just 10 points..
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That is good to hear! Trying to implement some of these can be hard though. I still struggle sometimes with no. 4 and 10.
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Very good! Am printing this.
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Thank you for the kind response.
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thank you, but you dont say technician's item on the trading account, if we have a small account, to make money, we take risks more than what we should take, because of litte profit. (sorry bad english:) )
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Yes, I did not want to repeat anything he had already covered in his post. Thanks for responding.
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Well....!! A really lovely article...
But, I do not accept the second half the 6th point valid if you are trying to say someone is not cut out for this.
Why? Brain is a very flexible organ. There are things that it can do already and there are things it can learn to do. Unless someone is born special with inherent traits that make it challenging for them to learn something (which is biological), otherwise absolutely anyone can trade and learn to do well. The only difference is whether someone is ready to go through the psychological challenges that come their way....
From the day we are born, we start learning new things and with time, we start comprehending. Everything we do is absolutely new and with time, we tend to lean towards certain things which we choose as a part of our life. Like playing a Guitar or Boxing or Football or Math or Darts or an Actor. Everything we do has one thing in common. Constant practice and persistent attacking of our choices that improves our skill daily.
Trading is the same, but a lot of us do certain things that requires this and we only need to find a way to incorporate this aspect into trading while learning. A Guitarist practices day in day out for 10 to 15 hrs a day. A boxer gets up every morning even when he's not boxing, and goes through the same vigorous routine so that he's ready when it's time for a match. Same with Footballers or someone who plays chess or even me as an Actor practicing random lines or trying to invent new scenarios testing skills and improving upon it. It's just constant tackling of the skill and learning new scenarios and reinventing ourselves daily... This is how brain keeps working with what we are doing and when we apply the same discipline while learning how to trade, then there will come a time that our brain is used to this discipline and with consistency, the efficiency only goes up...

P.S. I am a lot less experienced in trading and very much amateur when compared to you but this is my thought on that....
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Thanks for your kind and elaborate response; I am happy you found this topic worthwhile. The reason I put that 6th point in, is because I, much like you, believe trading is a craft. I agree it requires a lot of self discipline, on a daily basis, to improve your skillset and ultimately your decisions and trading results. Fact is that there are aspiring traders who are not willing or able to do that with the intense focus it requires over a longer period of time. The fact that success is totally self-dependent means there is nowhere to hide or point your finger to: you need to have certain personal skills to be able to do it well and to increase your chance on success. This is just my opinion, I could be wrong offcourse.
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EmmyTrades JasperForex
I agree with you jasper
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great post, all I new, but good to reinforce my thoughts. Cheers mate
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JasperForex PRO toninvestor
Thank you for saying so!
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Great pointers. I sure made my mistakes but if you don't learn from them then you wasted an opportunity.
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JasperForex PRO burleysavage
Very well put. Truer words have never been spoken!
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Thanks for your advice, I'm starting to learn how to become a swing trader.
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JasperForex PRO richardnguyen09
Hope this helps! Make sure to also check out the great topic by Technician under Related Ideas. Thank you for taking the time to leave a response.
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Great post Jasper. The only thing I'd add, from my own experience, is that the psychological/emotional part played a determining role in my case. Emotional instability and/or financial desperation (meaning trading might make or break your current situation) will lead you to make hasty decisions that, in most cases, will work against you.

I learned this the hard way, the problem is not the situation you might be in, is how you react to it what makes the difference. I know its much easier said than done, but that's what changed trading from very stressful to decently successful for me.

Handle your mind and your emotions or nothing else will work. At least nothing did for me until then.

Good luck people!!
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Thank you for adding this valuable point. These things are sometimes difficult to talk about because as traders we like to show our confident everything-under-control side. But its true: having the right psychology is absolutely key to becoming a successful trader and its one of the most difficult things to control. I am not yet where I want to be myself with this. Its good to hear you found a way to handle the emotions / psychology effectively. No doubt you came out stronger in the end!
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Technician TOP JasperForex
We are all human, have emotions and it controls us, this is how we are created. Everyone has this problem but it varies in magnitude from one to one. I still struggle with psychology as well.
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Bill45a PRO Technician
Its a constant struggle and a permanent job. You can be your own worst enemy when it comes to trading.

One other point that I heard in one of the very many webinars I attended really caught my attention, and it is that when you're starting to trade FOREX, learn first how to make PIPs, money will follow after you learn to make PIPs, which translates to start trading micro-lots, the smallest possible unit your broker allows, once you get the PIPs consistently positive, then move to mini and regular lots. This will make learning to trade a whole lot cheaper... :-)
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Agreed 100%. That’s why I included point no. 5. The goal should not be to make money. The goal should be to make good trades. Once you have that under control, money will follow from there. That is why I never talk money in the forex chat / via private message, even when I am asked. I only talk about pips.
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Bill45a PRO JasperForex
Agree 200%... :-)
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OzkOzn Bill45a
"You can be your own worst enemy when it comes to trading." this part is very valuable, thanks
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G13Man Bill45a
it is true where we begins makes a difference . starting out with a small account , does involve a bigger risk in sizing of positions . i have taken small amounts up to 2k and did not adjust my thinking , to much risk in the size of position rather then going to a couple more positions for safety .... I have still to get over my emotions with dealing with the people here who do not understand that trading is a 9:30 to 4 :00 job , and that just because I am here now , does not mean I can help u now .
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Amen!
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JasperForex PRO NJSEquities
I hear you brother.
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Good ones! :-)
Especially nr 5. and 8.

Did also like mr Technicians list.

Adding to Nr 5: Focus on percentages, pips or points and the money follows automatically.
Following this rule makes it possible to trade with small amounts without taking too much risk, but also makes it easier when there is a lot of money at stake.
Staring constantly at a floating P/L in money kills you. Turn it into points or hide it on your screen.

Adding to Nr 8: Money management is top 1 priority.
1st level: exposure of your total trading amount. You need at least 3 times of your active exposure on the side line to start again if everything goes wrong (as example the Swiss debacle, brokers going insolvent or a simple blow up)
2nd level: divide your active exposure over multiple brokers/accounts. If one broker has technical problems, you can switch to another. It happens more often than you think.
3rd level: risk per trade.
And be careful with overnight/weekend exposure in today's volatile environment with a lot of geo political and fundamental things going on.

Psychology shouldn't be underestimated, it can ruin a good system.

Trading systems are overestimated and most of times overcomplicated.
A system should be robust and fully parameterized (when trading with algo's). Market behavior is constantly changing and you must adapt.
There are lot's of plain and simple systems/strategies that work, but they only work if you have the discipline to follow it through (Psychology)

This is my experience after two years of trading, also a little bit novice too and a (calculated) risk taker by nature ;-)
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Technician TOP Biff_Tannen
Great input , i loved the idea of multiple accounts.
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Biff_Tannen Technician
Imagine the extra possibilities you can add to your strategies with multiple accounts, like using different risk profiles, advanced hedging techniques with different kinds of stop-loss, etc. ;-)
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JasperForex PRO Biff_Tannen
Good tip on how not to be distracted by the P&L information! I know traders who put Post-it notes over that part of their screen. Also very good tips on money management. New traders should use a small part of their excess capital that they can afford to loose. And if they don’t have any excess capital, well then they should not be trading live. I sometimes read about traders who want to borrow money to start trading or use their credit card to fill their first trading account. Huge face palm.
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Agree here, number 5 is very important, in other words " Focus on the process not the result"
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JasperForex PRO EagleTrades
That´s a nice way to sum it up. Thanks for taking the time to leave a response. I appreciate it.
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Your 10 tips truly helpful to me.All your tips collectable.I am going to use these tips my trade life.Yes, number 5 is very very important.Jasper,thank you so much for sharing such important knowledge.
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You are very welcome, I am happy they are useful to you. Its all about taking babysteps, improving a little bit each and every day. Make sure to also check out the great topic by Technician under Related Ideas. Good luck!
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I am amazed by the different technical methods to trade with . But i try to take a fundamental view when checking out new stocks to trade . so # 7 is one of my double checks to see the direction and why .
these rules are a great addition to techs .
thanks I
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Thanks for taking the time to respond. When I joined Traidingview I had no idea how many different technical systems people used in trading. The list seems endless, no two traders trade exactly in the same way. But trades where fundamentals and technicals align have the best odds to turn out a winner (unless maybe its a low timeframe scalp).
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Ahmer JasperForex
In the beginning of my trading journey i went to youtube to find out how trading works and there i found that everyone is trying to focus on technical analysis, drawing lines on charts, putting more and more indicators, making me curious about building my own HolyGrail system strategy that work 95% and i start dreaming to be a super rich person in few years. After blowing a couple of accounts using too much leverage i switch back to demo account, Start learning fundamentals with confluence to Price Action and Support and Resistance and never look back.



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A familiar story. Systems don´t have to be complicated to work and we don´t necessarily need 12 indicators giving us information. They only need to make sense and have a positive expectancy over a larger number of trades. The rest is just practice, practise and more practise. Repetition is the mother of skill. Thanks for sharing your experience!
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8. Don’t overemphasize the importance of finding the best trading system. Equally important are psychology and money management.

I would add to this slightly by addressing that you need to find the best trading system for you, there are fantastic systems out there but if you try and trade something that does not fit with your personality then you will have problems being successful, so this really links into psychology as well,

Money management is usually a function of your overall risk tolerance and your strategy, and understanding how your strategy performs over time, i.e. max draw downs in R:R terms and your position sizing strategy - usually the win% of the strategy gives an indication of the maximum R:R drawdown which you can mitigate using good position sizing strategies (i.e. smaller risk per trade)

If trend following and win% of 30% and using 3% risk per trade opens the door to significant drawdowns i.e. you would have 50% chance of having 13x losses in a row which would be ~39% drawdown and 30% chance of having 15x losses in a row which would nearly halve your account

So the real questions are:
a) How much pain can you tolerate? (usually halve the number you initially think)
b) Does the strategy fit the way I think? am I in sync with it and does it make sense to me?

I think you can tell from my comments above that I am against blind % risk per trade recommendations... i.e. 1% or 2% or 3% etc, As usually these numbers are not validated
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JasperForex PRO dionvuletich
Thank you for your elaborate response. I agree with every word, a trading system must fit with your personality or you are doomed to fail in the long run. This has everything to do with confidence and discipline. And mitigating against severe drawdowns or even risk of ruin is an important goal of money management and position sizing is the way to do this. Thanks for sharing your thoughts on this.
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dionvuletich JasperForex
Its a great article you put together so thanks JF, I only added the comment above as I have made the mistake of trading a good system that did not fit my personality for 3 years only to fail... nothing wrong with system - but it did not work for how I think; so validates your point of 'doomed to failure' trading a system that does not fit you - Bright side is it led me to my current system which does work for me; so was not in vain =)
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JasperForex,

Great article so far.
Although I don't find enough time to participate in this community on regular basis, i appreciate your efforts. I would also like to add few points from my own experience in another post.



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Please do, am looking forward to it.
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Sounds like typical cheat-sheet but love to read again and again, don't know why ?
Too inspirational.

Thumbs up :)
Cheers :)
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JasperForex PRO Pricemutation
I appreciate the comment. I actually have cheat sheets with candlestick formations, price patterns, harmonics, meaningful Fibonacci ratios and inter market correlations for quick reference. These 10 key things are not among them, but I agree they are in concise cheat sheet format so I could just print them as well haha
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Pricemutation JasperForex
:P :P :P :P :P
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Pricemutation JasperForex
Adding more, do share those cheat sheets as well with us, if you can, since it would be helpful in learning curve & a win win situation for all rookie learners like me :)


Sorry for spamming :O
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JasperForex PRO Pricemutation
Well they are really not that hard to make, Google is your friend ;-)
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thanks for this post :)
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You are welcome.
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Let's add this to an "educational content" page - Nicely done and good advice. Tim
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Thank you Tim, I appreciate the comment and suggestion.
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Thank you Jasper :)
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JasperForex PRO radovansurlak
Any time :)
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