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RE: How trading changed my life (A story)(featuring @rules169 as author)
Thanks for the info! My goal is to gather $2.5 million to reach financial freedom. Forex isn't the only way I want to go. Real estate, futures and the stock market look interesting as well for me. Maybe a business if I find a good idea.
But please tell me why you think forex isn't the best way to spend my time.
The way I see it, all kinds of trading - whether it be forex or stocks, can be broken down into two aspects: Speculation and whales. Whales do what they want when they want, they jump or dive - cash out, cash in, randomly and these cause big price movements. The speculators are like the waves, they try to make the ocean smooth again to find the balance... so a whale can be a high net worth country, company or individual, and they might cash in or out slowly over time, rigging a market in their favor or in line with their goals. Some of this you can see coming, but most of it you can't, unless you're working for the whale. If you are a speculator, you can get taken by surprise by these movements at any time and it is mostly completely random, so in a way all the money you make is pure luck. You can only chip away at luck with good data, but in the end it's still luck.
Add to this that most of the biggest scam artists and greedy lying thieves are in financial services, you need a think skin and sharp wits to survive - AND YOU NEED TO KNOW WHEN YOU'VE MADE ENOUGH.
$2.5m for financial freedom... that's a lot, that's more than 99.999% of the world has. Think about it long and hard if you really need to aim that high. In most countries you can achieve financial freedom with less than $500k... in many even less than $200k - and from there you might be reach for that goal from a position of relative safety, without having to risk the freedom you've already achieved.
I've played around with Forex and trading for a few years, as well as copy trading and algo trading. To put it simply, I've only really seen two kinds of traders/algos: those good at following a trend - but when market conditions change, they fall off the end of the trend and lose everything they made during the trend (because they didn't know when they made enough!) - some of these trends lasted for months. I have not come across anyone who could spot a changing trend 3 times in a row.
The other one - and the only way that I've seen people recover from big losses is by going Martingdale. That means you're just risking more and more to make up for past mistakes. 4 or 5 wrong guesses and you're out.
Why beat around the bush, if you're going to gamble like this, why not just make one big bet, either win, or lose, once, and save yourself a lot of time?
The vast majority of people lose, and the ones who don't are either the ones who were already the richest, or the handful of lucky ones, or some upstream broker, LP or bank that took advantage of everyone else's ignorance.
You might trade up to $2m, and congratulate yourself on how well you did... and then lose everything back down to $100k or less, wasting a few years of your life doing this. Whatever you do, is going to take time - do you like sitting in front of a screen? Maybe it is for you. The thing is, just knowing the positions and movements aren't enough, you need to stay pinned to the screen and time it perfectly if you want to beat the algo's that the broker uses to game you, that his liquidity provider uses to game him, that his bank uses to game him... you're at the end of a long chain of getting gamed, and at the end the only way to really beat this is to work for the guy with the biggest stick, and good luck getting in there. Property bubbles come and go. If you find one, get in early and get out early, you're good. Do you like driving around checking out properties, dealing with people, micro managing paperwork?
Business? You don't need a good idea - there are literally thousands and people throw them at you 24/7. It's more about the market... you need to do market research and find things people need, want and use every day. People test business models by selling stuff they don't have just to see if people will buy it. Most businesses just do something cheaper than another. Many businesses protect their interests through dirty tactics and you need to be either invisible or ready to fight back. Some businesses are easier than others... most businesses are just there to keep people busy.
Employment is underrated, especially if you're an entrepreneur. You know, some jobs can be heaven on earth... you don't have to worry about where your employees' next paycheck is coming from, who is going to try and squash you. You can stay in the suburbs, in a beautiful house, raise a beautiful family, have a beautiful social life and plenty of time for yourself... most people running a business give up at least one of the above if not all.
If you're an employee you can set your boundaries and do only what you committed to, so your boss won't expect more and more from you, and you can get paid to do what you're already good at. In most jobs if you stuff up, you will seldom have to deal with it yourself. Some work environments are toxic... but you're free to shop around and find one you love.
Haha, you asked for it. I type as fast as I think, problem of mine. Got to get to work now... I'm going on holiday soon... will put some thought into making all of this more palatable! :-)
Wow again such an amazing answer. Thanks for putting all the work in this.
I'm sorry that you didn't succeed in the forex markets. I agree that the big players control price. That shouldn't be a problem though. I just piggyback their moves. I've seen a lot of people succeed (most failed though), so it is doable. Btw if you play it smart then you can avoid losses like your 2 million to a 100k (aka stoplosses).
I know 2.5 mil is a lot, but that's actually my ultimate goal. The goal before that is 750k. It would give me just enough to pay for my food, rent, etc. 2.5 mil would give me extra luxury.
I've been employed and it's indeed easy. Most of the time is too easy for me. It's not challenging at all. Going to work, doing the same work everyday and going home. The security is the good thing about it.
Anyways ill figure it out. Thanks for your perspective on the things. It helps me to improve :)
Haha, thanks! I didn't say that I didn't succeed. I turned $100 into $5000 just learning the ropes. I think anyone who is sharp will be luckier than most, but me just saying that will probably cause another 50 people to each lose $100 to one other person who may make the same, so I'm not proud of it, and I know it was just luck.
I would probably do okay doing the same with $10k. But would I make it up to $500k? Would it work the same if I started with $100k? Is it the same amount of effort turning $100k into $5m?
I doubt it, because now you're a lucrative target for those who know even more than you do. I've heard of too many people who lost $10k+.
The problem is, that the more you have, the easier it is to risk even more getting debt and leverage and it's tempting.
What if the broker borks your stop loss? Do you have the means to get it out of him? Probably not, and he knows it.
Business is cut-throat and you only realize this once your very life has been threatened by business rivals.
I just sold a share in one of my companies for $100k. I'm not trading Forex with it, or putting it in these insanely overvalued markets - I've put half of it in property and I'm setting up businesses and buying and selling goods and services that people need with the rest, it's not easy money but it's honest business and if hyperinflation or some other crisis hits, I'll be able to add value. Rather than investing, I go to local startup-events and hackathons to see what people are working on and to see if I can team up and help.
And with the $5k I made in forex?! That's my upcoming holiday! Quit while you're ahead!!!