Is Trading Really That “Simple”?
Trading is often misconstrued as an endeavor that is easy, but in reality, it’s quite the opposite. In my journey as a beginner trader over the past six months, I’ve come to view trading not as an easy pursuit, but rather as a simple process founded on a set of established rules. If you adhere to these principles, your chances of success increase significantly. However, the true challenge lies in mastering the psychological and disciplinary aspects needed to consistently follow these rules—a testament to the fact that while trading may be simple, it is certainly not easy.
As an aspiring trader, my learning has predominantly stemmed from resources like ChatGPT and YouTube, rather than investing in mentorship programs. By utilizing ChatGPT as a virtual mentor, I have been able to pose tailored questions that have provided valuable insights into the trading landscape.
I embarked on my trading journey by practicing with a demo account, initially starting with €2,000—an amount I felt comfortable risking when I transitioned to live trading. My objective was clear: to make €100 a day, a target that would ensure a comfortable lifestyle.
I started by exploring Smart Money Concepts (SMC) and Inner Circle Trading (ICT) principles. My first experience was with ICT’s Silver Bullet strategy. I dedicated numerous hours to meticulously watching price movements on the 1-minute chart. After a few months, I began to feel disillusioned; while trades occasionally hit 2R or 3R, I struggled to secure profits because exiting trades prematurely conflicted with the strategy. Ultimately, I abandoned Silver Bullet, yet the experience deepened my market understanding and honed my observational skills.
Returning to fundamental principles, I began examining how the market responds to liquidity. I explored both internal and external liquidity, which can be summarized by two key concepts: the market’s tendency to seek external liquidity, and the subsequent movement towards filling internal imbalances. This shift in perspective was pivotal. I started to appreciate the significance of fair value gaps related to internal liquidity and resting liquidity pertaining to external factors.
In my exploration of fair value gaps, I also learned about inverse fair value gaps. By synthesizing these concepts, I developed a strategy anchored in three fundamental principles: daily bias, inverse fair value gaps, and resting liquidity.
Upon implementing this strategy, I initially enjoyed a string of successful trades. However, I soon encountered the issue of overtrading. The rapid pace of trades, although individually profitable,
One response
Your journey through the world of trading is both inspiring and insightful, especially considering the challenges you’ve navigated as a beginner. It’s evident that you’ve been proactive in your learning, leveraging resources like ChatGPT and YouTube to build your foundational knowledge. Here are some additional insights and considerations as you continue your trading journey:
1. Emphasizing the Importance of Risk Management
While you mentioned the importance of your daily goal and the adjustments you’ve made with funded accounts, risk management is crucial in maintaining long-term profitability. It’s critical to establish a solid risk-reward ratio on every trade, typically aiming for at least 1:2 or 1:3. This allows you to withstand a losing streak without severely impacting your capital. Moreover, determining the right position sizing based on your account size and risk tolerance can prevent significant losses, further ensuring that your trading remains sustainable.
2. Keeping a Trading Journal
To secure your continued learning and growth, consider maintaining a detailed trading journal. Record your trades, including entry and exit points, the rationale behind each decision, and your psychological state during the trade. Over time, you’ll be able to identify patterns and areas for improvement. A journal not only helps in analyzing past trades but also serves as a valuable tool for developing discipline, which is essential for responsible trading.
3. Understanding Market Conditions
Trading simplicity can be misleading if you’re not fully aware of market conditions. Markets can behave differently under various economic circumstances, such as high volatility during earnings reports or lower liquidity in holiday seasons. Staying informed about macroeconomic indicators, news releases, and trend forecasts can help inform your trading strategy. Tailoring your methods based on current market conditions can make your approach more adaptable and effective.
4. Continuous Learning and Networking
While you have successfully utilized free resources, exploring other avenues for learning can provide diverse perspectives. Consider joining trading communities—either online forums or local meetups—where you can engage in discussions, share strategies, and seek advice from experienced traders. Networking can provide you with insights that books or videos may not cover. Additionally, if you eventually decide to seek mentorship, finding a reputable mentor who aligns with your trading philosophy can significantly accelerate your learning curve.
5. Managing Expectations and Psychological Resilience
It’s great to hear that you’ve recognized potential issues with overtrading and adjusted your approach. However, it’s important to remain vigilant about your expectations. Trading does involve periods of drawdown, and there may be times