Everything You Always Wanted To Know

..but never dared to ask about trading.

What is risk in trading?

Number one: you die without ever making any money.
Number two: you loose all the money on the account.

What do you need to speed up money making?
Leverage. A broker can give you leverage on your money (500:1 is accessible). If you want the most volume of fish, you’d better be fishing with dynamite.
You can get leverage on your time by making the computer trade for you part time (automatization).

Why do you trade Forex?
Because the ability to hedge at no extra cost means the possibility to take losses on your own terms.
Why do you trade EUR/USD?
Because you can make 1.5 pip net from a 2.2-pip move in your favor.
The second cheapest instrument would cost you twice as much in commission and spread (GBP/USD).

It is possible to make 50%-100% gains in a week. In 2 weeks the account can be doubled.
High leverage means that you can keep your own risk low.
If you put up 1% of your net worth, and you would take this money back 2 weeks later, your risk from then on would be 0. You see, everything is relative. The only money that is yours, is what you have taken out of the trading account. If you loose one time a 1% account, and by then you would have multiple one percents lined up ready to open a new account, your loss would merely be time: a couple weeks of no productivity.

This wasn’t the risk management the academics were pushing on you?
Nobody would become the richest person in the world by doing everything the same way others do.

Which part of this is not sustainable?
Well you do need a good understanding of what is happening.
There are only two fundamental things in trading: people want to make money, and fear is stronger than greed.
I do not follow any of the news. To make 2.2 pips on a trade they have 0 relevance.

Of course you can also speed things up by gaining proper understanding and read on what is happening.
For instance, knowing where the spark zone is, where the Bull Zone1 starts and what is happening there is already more than all the “knowledge” you managed to obtain to date.

If you learn mean reversion well, you can be the king of the traders.

Math.

If you want to use a mathematical formula in trading, here it is: if you make $100 ten times, you just made $1000.

Pips.

You cannot express gains in pips: it is meaningless if you do not disclose your multiplier (position size).
On the trading floor there was Sebastian sitting behind me (the only other older guy). He said: 10 pips a day will make you rich – and he spent all his efforts seeking out the smallest bodied candle up to a year back – like this was what trading was about.
How about 70 pips a day then out of 2-pip trades and virtually no losses. Could that make you rich? (EUR/USD does not even move 60 pips on most days.)

As you can see the lump sum if I was to cash in after 2 weeks is 200% gains.

The pips division is a bit off: you should not factor in the days when there was no trading; the 746 pips total has to be divided by 10, not 14.

I have done 415% before in 3 weeks (475% not factoring in the open positions), and now you know, if anyone would crack 1000% gains trading Forex in a month, that would be me.

Here is a video about what a difference the right person can make.

The original title of this post was intended to be Clubbed to Death

& another video to put our insignificance in perspective.

Oh yeah, if I haven’t mentioned yet, I am furnishing these numbers while holding a full time job.