In this episode of Truth About FX, Walter talks about probably one of the biggest myths in trading: that you’re going to “perfect” your trading once you quit your job.
Walter shares his personal experience on this and his take on whether or not this would actually help you step up your game. According to him, choosing the right broker is critical… But, aside from this, do you know what is the most important point to remember? You’ll fnd out in this episode of Truth About FX…
Download (Duration: 05:05 / 5.82 MB)
In This Episode:
00:17 – misconception
01:18 – tiny account
02:14 – cushion of money
03:14 – bump up
04:13 – trades in your pocket
Choosing the right broker is critical [Click To Tweet].
Build your confidence up [Click To Tweet].
Add more markets [Click To Tweet].
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter. Where do you find the time to manage your trades when you have a full time job?
Walter: This is a great question and I think there’s a little bit of a misconception because I thought the same thing when I was working. I thought, “Well, if I’m able to get out of my job then I will have all of my focus on my trading. My trading will get so much better. I can trade the H1 chart or the H4 chart” — or whatever that I find difficult doing while I’m working and it was actually the opposite was true.
My trading stepped back when I focused on it. I think the reason why is because when you’re trading the D1 charts — obviously, if you’re trading and working, the easiest way to do it is to trade the D1 and W1 charts.
If you’re thinking, “Oh no, my account’s too small. I can’t have 375 pips stop losses,” then you need to move to a broker — and we’ll put the brokers in the show notes for this episode.
There are brokers out there that allow you to trade nano lots, micro lots — or whatever they call them, these little, tiny lots — so that it doesn’t really matter if you’re risking 379 pips or you’re risking 37 pips. You can still risk the same amount even if you have a really tiny account.
That’s critical. Choosing the right broker is critical. Once you’ve done that, you can do the D1 charts. You can sit down for 15 minutes a day whether it’s in your morning or in your evening and you can use that time to make your trading decisions.
That means putting in your entry prices and your stop losses so that your orders are setup to go. Whether that means moving to break even or even if your using a trailing stop every day, you can go ahead and adjust that stop, assuming the market is going in your favor.
All of that stuff can be done in 15 minutes a day, trading the D1 charts. Even if your watching 25 different D1 charts, that’s really easy to do. I would suggest that you switch to the D1 charts and the W1 of course. In that way you can still trade, build your confidence up and you’ll may be surprise.
You might find that when you do quit your job eventually after you’ve built up say 9 months worth of a cushion of money to live off of so that you’re not under the gun to make money because that’s the key.
If you quit your job and you’ve got to make money every single month from your trading, that’s where a lot of traders fall apart from that pressure. I would just say, focus on the D1, add the W1 in if you’ll get a weekly signals and just do that.
Just build that up and build your confidence up. If you need to add more trades, add more markets rather than trying to add more time frames. Add more markets, expand out to 40 markets. Add coffee, natural gas and bitcoin and S&P 500 and all that. Do all of that stuff if you can get a broker that has all those CFTs. That’s the way to do it. Not trying to add the H4, and the H1, and the H8 and all that, that’s not going to really do you very well.
The other thing to do is you could add H12 charts. In theory, you could add the H12 charts if they were set up right so that you could take some of that trades as well. That might also bump… It will bump up the number of trades you’re able to take, too.
That’s another way to do it but I would definitely focus on finding the right broker, focusing on that 15 minutes a day and then from there, just let it roll, build up that confidence. That’s the main thing.
You can advance your trading by focusing on just the execution, by having this 15 minutes a day and by expanding the markets. If you’re worried about missing out and not taking enough trades, expand the number of markets and that will only increase… Let’s say it takes you 15 minutes a day to look at 25 markets, if you expand that to 40 markets, maybe it takes you 20 minutes a day.
It’s not going to take that much time to scroll to the charts, manage the trades, and find those setups. And then from there, you can build your confidence. And then if you want to still add the H12 charts or H8 chart or whatever, you can do that but I think it’s a slippery slope when people get in.
I’m speaking from experience when people get into this idea that, “Oh, soon as I quit my job, I can do so much more. I can take so many more trades.” It’s a bad idea to carry your trades in your pocket.
I found that out. I’ve got the smart phone — they came out before the iPhone and all that. I had all these MetaTrader and platforms on my phone. I was like worried about these trades.
I was managing my D1 chart trades on the H1 chart from my phone and it’s ridiculous. It was so stupid. I would just recommend spending a little bit of time everyday, that’s the way to do it.
Hugh: That’s a great advice. Thanks, Walter.
Walter: Thank you, Hugh. Oh! There’s a whale outside my window.
Hugh: Oh, yeah?
Walter: Oh, woah!
Walter: Hold on a sec, I’m going to get my picture.
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