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Just a note about learning to trade.

I’ve known a lot of traders over the last ten years. I have been a fellow student and a fellow trader in many different arenas. I can’t think of one person (including me) who avoided the pitfalls of random trading, random gains and random losses; of thinking they had the perfect system or they had the market completely figured out, only to find themselves devastated one day when their friend, the EUR/USD, (or what have you), has taken you for a fool.

I have watched educators too, (and I won’t name names here) who speak as if they are the chosen ones who have uncovered the secrets of the markets. I have heard comments like these:

“If you’re a smart trader, you won’t have losses.”

“My traders [my students who pay me money] are living the life, trading these wild markets without any problems. We are not afraid of any market conditions, we trade them all, holding onto our winners for thousands of pips.” [And not speaking about our tragic losses, because we have excuses for those.]

“Forex equals Financial Freedom.”  ”You don’t even have to tell your friends or neighbors where all your money comes from.” [Says a man who I paid $8,000 for training who, as it turns out, never traded a day in his life).

“I can’t believe you’re only making 10% per month. I expected something on the order of 40-60%” .

“My trading system is working, but it’s only making 30% per month. We think we can make it better….” (Famous last words before you ruin everything you had that was good).

You’ve heard me talk before about random trading. Random trading is trading without a plan, so that all your gains and all your losses are random. You never arrive at a goal, and you never have to account for a loss. Winning 30% is no different than losing 30%, on the endless chasing after something better. My question is… Better than what? It’s random and never reached a point of completion, so trying to improve “it” is a false endeavor.  Everything gets changed up so often that there is no distinction of accomplishment. It’s all chasing after something, searching for greener grass in some new non-existent sure-fire cocky-ass system. If the system makes 30%, then stop and look at it, and make sure you understand why it did. Identify the part of your report that can be attributed to “luck”. If your losses were just bad luck, then so were your gains.(If you can improve your luck and make it repeatable, then please disregard, and plan out your next trip to Vegas…)  Make sure it’s repeatable, meaning, make sure you can repeat it!  (No, I mean every month. I mean, do it again and again and again. Now you have something to talk about.)  If you lose 30% and you give yourself a pass, then you haven’t made any progress towards your goal. Wait, did you have a goal?

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