…or can we generate some active/passive income by trading the right strategy?
I’ve been trading FOREX(or at least tried….or I thought I did) since February 2013. I’ve started when I found a broker that was offering a free stock (Facebook, Google and something else that I forgot). At that time they were around 20 USD each. That was the deal, sign-in, get a stock and start trading.
For the ones that don’t know, FOREX comes from the foreign exchange market and it’s basically the exchange of one currency to another (from USD to EUR).
The road to Profit
Imagine how hard the time can pass. After signing in, I waited exactly 3 days to sell the stock (as mentioned, my plan was to trade FOREX not stocks). That three days were like one month. One month of checking each 2-3 minutes the mobile app to see the price of Facebook (I chose FB because it was almost poetic to select the stock of the website that advertised the broker I was going to work with). In that 3 days I saw a profit of 11 cents. I was on the road to self sustaining from trading.
After selling the stock I’ve started trading directly. I had the option to use a leverage of 500 and a high risk (what are those???) so each transaction I open was exactly 2.5 USD. I had enough money to open multiple transactions and I was already on profit ( BINGO, cha-ching, jackpot – and many more money sounds, you and me know, plus the usual dollar signs instead of eyes).
Of course I burnt the money in 2 days. And it’s normal, I did not have any proper training, I did not look at the chart, I was opening high risk transactions and so on. All the bad things you can think about, I did them all (I remember I even hid on the hallways to open the next transaction). I can remember the fear I was loosing that 2.5 USD on a bad movement.
Learning from mistakes
Did I learn from mistakes? Did I start to listen to reason?
Well, the purpose of the post content is to share the personal experience and what I learnt, so the answer is: Yes, I did. Of course it took me a while to learn from mistakes.
I’ve started to deposit 50 USD each month into my trading account, money that I kept loosing in the next 2 weeks. I started to read some information here, some information there and even bought a book about trading (‘The first steps as a stock market investor‘ – Ileana Vrejba), but the most added value came from a trading guru, Rob Booker and the website babypips.com.
I took me almost 4 years to be ‘prepared’ (and I wrote it in quotes because you can never be ready) to invest in FOREX. During this 4 years I burnt around 1400 USD, I changed 3 brokers and spent around 400 USD on education. I think I had about 3 or 4 breakdowns when I decided FOREX is not for me (and by breakdown I refer to a period of 4 months or more I did not want to hear about trading). But I can say I learn from the mistakes I made and even decided to follow a payed course of 3 weeks where I consolidated the gained knowledge.
I’ve learn about fundamental analysis and how the market reacts to news, I’ve learn about technical analysis and the important zones of the market. Do not forget the catchy phrase (which by the way is 100% true) the history repeats itself. Another important topic I saw (and battled) in this 4 years, is that the size of your trading account really matters (so the 5 USD nano account it’s not a good idea). The same principle was enforced during the course. Maybe if I had a bigger account and saved the money instead of burning them each month, maybe it would have been better.
Now, as FOREX is a high risk investment, what remains to see is the Unknown Unknowns (what I don’t know I don’t know) and today I made the first deposit (the biggest in my trading history) – 500 USD .
Just to sum them up:
- trading without a proper education or the basic principals of technical and fundamental analysis is a big NONO
- you need a proper trading account ( the ads with: “you can start from 5USD and get rich“…well they are not ok for me)
Thank you for reading this!
Disclaimer: I am not a financial consultant, all the information you find here are my decisions, I taken in that moment, on my own analysis. I am open to any type of discussion about money. If you want to replicate my portfolio take into consideration that it is your money.