Episode 280: Two Things I Wish I Had Done at the Beginning of My Trading Career

by robbooker on August 13, 2014

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Welcome to Episode 280 of The Traders Podcast with your host, Rob Booker. In this show Rob begins by asking, “What if you were beginning your trading career today? What if your neighbor began trading today and asked you for advice on what she should do?” These questions position Rob for his topic: Two Things I Wish I Had Done at the Beginning of My Trading Career.

After giving these two tidbits, Rob reads some feedback from traders who recently reported on how they’re doing with their trading. Rob also explains why it’s difficult to find information about successful traders and their performance results. Then Rob tells a story about the most successful trader he ever met and considers this person the greatest currency trader he has ever known. Join us for an inspiring and motivating episode of The Traders Podcast. Thanks for listening.

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{ 15 comments… read them below or add one }

Pablo August 13, 2014 at 11:28 am

MAGNIFICENT EPISODE!!!!!!

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Scott August 13, 2014 at 11:31 am

Hi Rob,

Wouldn’t it be great to be starting again today with the things we know now;
I would do a couple of things different being the things that I do today;
I would start tracking my trades publicly from day one, to help keep me accountable to myself, knowing that other people are watching and could call me on my bad trades.
Focus on a maximum of three pairs only.
Take smaller positions.
These three things would have helped me greatly!

I’m impressed with your trifecta 3 “no stop loss” concept of sizing down on your trade size
Keep up the good work!

Scott

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ryan, the heated debater August 13, 2014 at 12:08 pm

It is amazing how this trader made so much money n a short amount of time. It is also amazing to see how doing something you are not used to can wipe you out. Great episode!

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Brian F. August 14, 2014 at 9:39 am

This rousing pep talk kind of overpowered the message about maintaining a consistent trade size in one market. The central issue here is journaling. If your journal is full of apples, you can compare apples to apples and improve upon the exact thing that you do to make money. However, if you keep jumping between currency pairs, entry techniques, indicators, and exit strategies, your journal is not going to have anything meaningful to say, or worse, it will give you bad advice because of randomness.

After hearing Shonn and Matt discuss their approaches to trading in Episode #179, I’m not surprised he’s posting those kinds of results.

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Robert August 14, 2014 at 2:59 pm

Hi Rob and everyone
I feel like right now write a book on this episode subject, which I may do in the future. LOL So now I will try to keep it short……..
I started learn forex year and few months ago, demo trading for year and live trading about 3 months in total from that time. Few months I’m on transformation mode, I stopped trading at all when I evaluated my trading approach and way I learned about the market. I starting over. If you learn online you have to filtered all the crap – scams, holy grail, marketers and web pages where promise you to teach you how to trade, but till you get some experiences, aha moment and come across someone honest like you, there is no way to filter out and you end up learn and belief lot of nonsense…… Now I going through book “Trading in the zone” – the trading bible I would say and in the half of the book I started think how I will do by now if I had read the book as a 1st thing when I started learn and demo trading. That time I didn’t want losing time read some trading book from somebody I don’t know I just wanted become trader. The point I wanna make is, would I be able to percieve the wisdom of the book the same way as I do now without the own experience in trading? For sure, it would not hurt me, but not sure if would realy help me.(I’m not studying type, I’m use to learn through experiences in my life) Even english language I never took one lesson so I’m apologizing if my english confuse you. So I think we shouldn’t beat out ourselfs for something we think now we wish we had done at the beginning of our trading career because we see it from different perspective now. I thing I only wish if I could get hands on some honest guide “must read before learning and opening trading account” to point traders to reliable resources, education and where to start. My biggest mistake was that I have been obsessed with trading systems – 80% of my trading approach. Also I agree with Scott and Brian and it comes to when we starting we don’t know that we don’t know…………………….
Thanks for reading to who got reading to the end.
Happy trading, Robert.

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Scott August 15, 2014 at 1:03 pm

Looking for opinion on the broker Oanda. Please let me know if anyone has any experience with them and if they are a good broker for a newbie to the forex market.

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Scott (FTB) August 15, 2014 at 11:21 pm

Their spread kinda goes crazy during news but for the most part oanda is ok,
Check out robs why brokers fail http://vimeo.com/55489372 and how to pick a broker.

And also check out forex peace army if your looking for user reviews on brokers.
but bear in mind when reading these types of forums that most losing traders blame their broker for their own idiotic mistakes.

Having dealt with MFGlobal in the past thing I’d be most concerned about is being able to get your capital back.

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Vali August 20, 2014 at 3:03 am

Come on. I hate to be the critical jerk in the comment section but claiming someone made 100 000 pips in a month is just ludicrous. Just no way in hell.

Back in 2009 GBP/JPY was fairly volatile and probably had a daily average move of 150-200 pips. (Just check the ATR back then). So say 21 trading days in a month and 200 pip move a day is 4200 pips in a month. Obviously theoretically you could make more then the full days move by trading the swings up and down etc. But to make 100 000 a month is 4761 pips.. in ONE day! Every day! For a month! That’s almost 24 times the whole average daily move. That is also over a 24 hour time period as its the currency market. Yep that sounds totally plausible to me..

What was this guy trading as well? Nano lots? He makes a couple of hundred thousand pips yet his equity peak was at around 80 000?

How anyone with the slightest of market knowledge can confidently claim that someone made a 100 000 pips in a month is just beyond me.

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robbooker August 20, 2014 at 3:15 pm

Vali, you are a complete nitwit. OF COURSE HE WAS TRADING SMALL LOTS. And yes, leave it to you to find a reason to criticize someone who did something great. Wow, you just made the world a better place. Congratulations. We all can live better now, since you have helped us to not believe in greatness. We owe you a debt of gratitude, say 100,000 pips worth, for your wisdom.

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Vali August 21, 2014 at 3:11 am

Rob, a 100,000 pips in a month on one pair is not even theoretically possible. Not criticizing simply stating a fact.

Im sorry to poopoo on your party but you are just way off on this one. He might be a superb trader and yes he might have traded super ultra conservatively risk wise, and that’s fine. But saying he made 100,000 pips in a month is absolutely not possible and ridiculous. The market simply wouldn’t move enough for him to be able to do that. You just can’t brush that away.

When you said it on the podcast I actually had to listen to it again to see if I misheard you. As I mentioned in the other post he would have to make 24 times more then the average daily move of the pair, every day.

I just went and counted the pip movement on 8 hours worth of swings from yesterday on a 1 minute chart on GBP/JPY. Ie if you caught every little swing up and down, some swings were less then 3 pips which in practice would be tough to get given the impact by spread/commission, but for argument sake say you caught absolutely every move. What would you have gained pip wise over that time period? Roughly 436 pips.

Now the average full daily move of GBP/JPY these days is around 90 pips, so lets take into account the volatility in 2009 and lets double it to 180. You would now be looking at a 872 pip gain if you caught every small one minute swing up and down for 8 hours.

How about this guy is an absolute machine and trades for 24 hours a day? Based on the average pr hour pip gain he would be looking at around 2616 pips. So he would still miss his needed 4761 daily pip target to 100,000 by over 50%.

Oh and that is also of course if he could catch every single one minute swing, for 24 hours straight with no losing trade and not counting commission or spread. He then of course would have to get started right away again to reach his next daily target and would still not be able to reach even half of his 100, 000 pips.

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TraderHARM August 22, 2014 at 7:12 am

Vali, It seems you did your homework on the volatility of the market back then but you forgot to look at the bigger picture. Back it 2009 we had 400:1 trading leverage along with being able to open trades in the opposite direction without having to close already open trade. Now, by listening to your uneducated rant, let me tell you what you don’t know. Back in 2009 with 400:1 leverage Rob Booker was using and teaching his students the use of stacking trades. I can remember people had 15-20 trades open on one pair at a time. They would have a trade open every 5pips in the direction of profit. Now do you math and see for yourself how it is possible to be a believer.
Knowledge is a scary thing, the lack of knowledge is even worse.

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Matt LaCoco August 22, 2014 at 5:06 pm

Hi Vali, It seems you are misunderstanding compounding pips, a method by which many very successful traders count their progress towards a goal. You can achieve (theoretically), any number of pips, regardless of the ATR (which is just a stupid irrelevant concept anyway), as long as price moves.

With a constant lot size on trades, the “pips captured” becomes the focus and measurement of progress. For the sake of example, let’s assume EVERY trade taken is one standard lot. Now we can’t spend pips, so now let’s just replace the concept of a pip with a ten-dollar bill, since that’s pretty much what a pip represents at standard lot. With me so far? Good.

Now, let’s say you open a sell trade with a ten pip limit order and walked away to go do something else. You’re good, so it’s a winner. You just made 10 pips. You also just made 10 ten-dollar bills.

What if you did this twice in one month. Two trades, each with a 10 pip take-profit. How many pips did you make that month? My math says 20.

What if, instead of walking away, you stayed, because, well maybe walking away is not what you do. Maybe instead of leaving, you stack an entry order every 2 pips, all the way to your original take profit. Your original trade idea works. One 10 pip move races through your entry orders, opening a new trade ever two pips. They all have the same take-profit price, so they all close at the same time. The market just moved 10 pips. How many $10 bills did you make? Let’s see, the first trade made 10, the second made 8, the third banked 6, the fourth brings in 4 and the very last trade earns you 2 bills, for a grand total of 30 $10 bills, or $300.

This is simply a way of measuring progress, and it’s commonly used by many successful traders, especially scalpers. The market moved 10 pips, but each of those pips can be captured by multiple trades. We are not measuring how far the price moves, we’re measuring pips captured in this example. Movement was limited to 10, but 30 were captured. It’s an alternate perception.

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Vali August 23, 2014 at 6:51 am

Hey whats up Matt,
whether you think ATR is a viable trading method or not doesnt really matter. It just an easy way to check the average move a currency pair makes.

Compounding pips or scaling into trades could increase the pips captured in a trade, but to what extent? You’re still not breaking those numbers down into how he could reach that daily goal of 4761 pips.

If we take the example you had, an example you probably just picked to show how compounding pips could affect the end result, but it will still serve as a decent way of measuring what theoretically could be done. Getting 30 pips out of a 10 pip move by adding on every 2 pips would obviously be a kick ass trade, especially if it can be done trade after trade.

Now first off let’s deduct the cost of trading from those trades, which is at the very minimum going to be 1 pip per trade. So from your 30 pip gain over 5 trades you would have to deduct 5 pips and he would have a net result of 25 pips. Now remember he needs 4761 pips to reach his daily goal if he is to get 100 000 in 21 trading days. How many of those trades would he need? 190.

For him to be able to get 190 trades, the market would obviously have to have at least 190 10 pip swings throughout the day which just doesnt happen. Now of course you could play around with bigger targets which will have a good compounding effect in itself on the overall pip amount and could be even more aggressive with adding trades, but still how someone is going to end up 100,000 pips at the end up of the month is not just and alternate perception, but it would be in an alternate reality.

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TraderHARM August 24, 2014 at 4:36 pm

Matt, We tried. Some people are blind because they refuse to open their eyes (You can lead a horse to water). Good luck Vali, I truly wish you well.

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Matt lacoco August 25, 2014 at 1:15 pm

Vali, open your mind a little, you’re refusing to acknowledge what is possible, and so you’ll never enjoy the possibilities. Yes, my example was just for the same of example, but it illustrates accurately a common method of positioning among very profitable traders. I stack trades like this all the time. It’s not a “kick ass trade”, it’s simply a more efficient way to extract profit from a certain range of travel, in this case 10 pips. Rob has even done some courses on stacking.

No, the market would not need 190 ten pip swings to get 190 ten pip trades. Thinking that is so is simply incorrect. And to many traders, a profitable reality IS an alternate reality. We find profit when we contemplate what can be possible, we find squat when we recite platitudes and obsess about being right.

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