Hi, in yesterday’s live training session we looked at potential trade setups for the week as usual.
I also explained how I had used my trading skills to double a spread betting account in just 20 days (on football- I will explain)!
New member Dallas explained how he had managed to take an account from $200 to $75,000, then promptly managed to lose it all!
He is now in therapy (I made that bit up) and doing remedial work with ourselves at FMP. Imagine the wild ride and the emotional roller coaster he must have gone through. I will email him today and see if he wouldn’t mind writing a blog post for us, explaining what he did, where it went wrong and how he handled the highs and lows.
One of our founder members, Omar came to me with a similar story back in 2009.
Omar started trading and managed to double his account, then treble it.
He quit his job.
Invested his own money (all of it), recruited family and friends who all put money in.
As he started to tell me the story, I knew there was only going to be one outcome.
Yep, he managed to lose it all 🙁
It took him over a year to deal with the emotional upset and shock and having to deal with family and friends. He came to me for private mentorship & guidance. We analysed what he had done right and where he had gone wrong.
He acknowledged that he had been on a lucky streak. That, in retrospect he was gambling, not trading. He had no clear rules. No fixed strategy. Little or no concept of risk management. All the things that we go on about here, every day!
He did not really understand what is going on in the forex markets, most newbies do not in my experience. He did not have clear rules.
If you do not risk a controlled % of your account. Not have too much exposure at any time. Do not reduce the amount staked if your account balance is reducing, etc, etc etc, then there is a 99% chance you will blow your account, or at the very least, lose a substantial part of it.
One of the things I discovered with Omar was that he “loved to trade.” He was hooked on the excitement of trading shorter time frames and the adrenalin rush.
I taught him how to trade from longer timeframes and take the emotion out of it and find something else to satisfy the need for excitement. Omar likes to play poker, so I told him to take that up online and keep the trading completely separate. Over a period of 12 months he turned out to be quite a good poker player and was also well on the way to doubling his account again, but this time in a controlled disciplined, rules-based way and with me looking over his shoulder ready to jump on him if he broke said rules! He went on to become a full-time trader, so he proved that it can be done, even for those who have suffered along the way.
When I started trading back in 2002/3 I developed all the bad habits of an unsuccessful gambler. I didn’t manage to treble an account like Omar or the HUGE gain that Dallas’ made, BUT I did make all the mistakes and more and blew up more accounts than I care to remember. It was ironic as I have never been interested in gambling. I did not bet on anything.
I had no clear rules and those I did have I would break all the time. I over-leveraged, revenge traded (trying to win it back). Eventually, when I had lost a significant part of the account, I would in effect “risk it all on the black” and blow the account.
My gambling habit 2019
For the last few years, my wife has had a small account to bet on football (only a few €100’s a year). She is very knowledgeable and passionate about it, but not a good gambler as she manages to lose it all most years! What is interesting with her performance is that when she has more than half of the money in her account she often takes too many bets (over trading) but when she has very little she is a lot more disciplined and strategic. A few weeks ago she was down to less than €5 in her account, but then managed to get it back above €40 and then went on a down run again.
At that point, I said, “if you apply the same rules and structure and research when you do have money in your account, then it is more likely to grow”.
I have explained to her how to use a more rule-based approach, but she is more stubborn than me and completely ignored me.
SO to prove a point I opened a €100 sports betting account- big spender I know 🙂 in November and have grown it to €237 + I got the signing on bonus which she never managed to do. It’s not been easy time in the Walton household as she HATES to lose and I have been referred to as a smartars* on more than one occasion, but she is now starting to pay attention.
What does this have to do with trading? I have rules & stick to them. I only risk a maximum % of my account per trade and limit how many bets/ risk I have at any one time. This is much too high for trading forex, but its a small account. I study the form of the teams (to give me a bias) and which players might be playing, injured or rested (fundamental research) and then look at the odds (risk-reward). I have been placing accumulator bets (more than one team or outcome) per bet to increase the potential profit.
If you would like some help then remember that lifetime members have a complimentary hour (annual members get 30 minutes) where we can review your current performance and I can give you a personalised plan to follow so that you start 2020 the right way!
Email me if you would like a chat: [email protected]
New members, please note: If I am looking to take a trade long, for example, 1.5000, I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
We are NOT a “tipping service” our aim is to teach you how to trade for yourself.
For more up to the minute, updates do not forget to drop by the forum in Pierre’s corner.
Watch the video for more detailed explanations of this week’s detailed analysis and trade plan.
Click on the square button bottom right to watch in full-screen mode