Build Up to Consistent Results
He was showing the right amount of patience in waiting for the solid setups. The risk:reward ratio used was acceptable for his style of trading and all of the trades were in the direction of the daily trend. He was keeping a log of his thoughts as he entered and exited a trade and was also just trading one lot at a time. So after six months of trading, he emailed to say that he was frustrated in that he was only a breakeven trader.
In response, I emailed back congratulating him on his excellent results. After six months of live trading, this trader had not made any money and I was congratulating him. What was I thinking? I think that in any field it takes time to become a professional. Nobody would think that you could become a professional golfer or a doctor after six months of preparation and trading is no different. It is difficult to become a consistently profitable trader and most new traders will quit before they reach that status. Whether they quit because of a lack of interest, running out of money to play with or just that they didn’t realize how much work it was to become a trader, you have to pay proper respect to what it is you are trying to do. You are competing against traders who have been profitable for years and work all day to maintain their edge. Becoming profitable is achievable, but we have to earn that right. We want to start out easy by getting a feel for trading and that means practicing in a demo account first. However, the real lessons start when you open a live account and begin to trade your own money. When there is real money on the line, a 10 pip move against you feels different than it would in a demo account. This is why we should start out small, trading one lot at a time until we feel comfortable about what we are doing. With time, you will find that trading with real money becomes easier. Then after six months of live trading, if you find yourself at breakeven, pat yourself on the back as you may well be on your way to becoming a profitable trader.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.