My trading story in a nutshell

Hi, I want to write down a different story today.

As I've been getting into Cryptocurrencies I was very sceptical. I switched from total doubt to complete hype almost every day, and that was 4 months ago.

I'm trading the markets for almost 4 years now. It started with forex. I can remember my friend who was doing research about how to make money online in March 2014. He found out about online trading and opened a Forex Account at a CFD Broker and told me about it. I was very sceptical but a few days later I opened my own account. I put 100€ in the account and started trading some Forex pairs on 1:100 leverage. And the first trade I executed ended up with about 1€ profit. Since this moment I was hooked. I could make money online with ease, I thought.

The first thing I was having success with was trading the XAUUSD (Gold). But one day I forgot to cancel a stop order and when I came back to my computer after lunch my account had a margin call because the price rushed down in 2 hours.

It was just 100 bucks. I don't know how I got started again. I remember selling a lot of things in eBay with the goal of refilling my account. The next account was around 350€. And I got started again. I learned about candle sticks, exponential moving averages all that technical analysis stuff. I was reading a lot of forum posts on forex-factory and copied their systems.

And so I was evolving into a real trading alchemist, looking for the holy grail trading system. Months after months I wasn't happy with my results, I got into emotional trades. Overtrading, revenge trading were just a few of the bad behaviours that always ended up in the next margin call. Then I tried the next best system, I was doing automated trading, learned coding so that I could write my own robots. Spend months just programming robots. Then I got into penny stocks somehow. Started again with 1000$ on Sure Trader, a sketchy stock broker in the bahamas. The fees just ate up my account. Failure after failure.

I realized that there was something wrong. My knowledge kept increasing and my behaviour got worse and worse. I read a book about trading psychology and discipline. The next day I was so undisciplined to risk all in one trade. How was that all possible? At this moment I was visiting seminars, read book after book, watched video after video about trading. But nothing was improving my performance really.

Then there came a day that changed everything: The 15th of february 2015. The day where the Swiss National Bank suddenly gave up the fixed 1.20 ratio to the Euro. I was trading the GBP/JPY and I was almost falling asleep when the volatility that was caused by the EUR/CHF pair kicked in. I was making 200€ in just a few seconds and took the profit immediately. Attracted by the volatility like a moth to the light I began trading high risk trades in EUR/USD. Scalp after scalp I was making 50€ and another 50€ and so on. Of course one position had to end badly and killed my margin again.

That's it, I thought, I will never touch a Buy or Sell button again in my life. I took a one month break. I saw that I was impatient and that this was my main problem. Getting in a trade, often with reason and getting out way to soon. In loss I hoped it was coming back and in profit I feared I could loose my gains. This behaviour is normal for human beings. I tried to turn it around by adding more rules for exiting my trades with a small loss and letting my trade run, trailing my stops etc.

I practiced on demo account and got better. But when I started with real money again, the emotions came back and it shouldn't be my last account wipe.

Another thing I slowly realized was that my dreams were too high. I was just a student without any income. And I was reaching out for the stars, dreaming of an easy life on some small island. Expecting to become millionaire after just one year. Stupid, of course and yet this emotion of immense greed meets me and I guess all of us when entering a trade.

This is all behind me now and I keep building on these experiences. But it's not the experiences that improved my behaviour it's an exercise I do every day. You can read about it in another article I posted here.

My performance keeps improving. I don't have the opportunity to start with thousands of dollars to risk in the market. I have a small account. But I know now that I can grow it exponentially with just enough patience and willpower to stick to my trading strategy.

Back to cryptocurrencies. You see I was having a lot of doubt at first. But remembering my past experiences I stopped getting too hyped or sceptical about cryptocurrencies. They are just another form of prices moving around. May it be on fundamentals, hype or whatever.

One thing I'm avoiding is to jump this sort of "hype-state-of-the-mind". Why? Because then I have the problems that I experienced in the past. I'm really obsessed with having entry and exit strategies nowadays because it keeps out bad behaviour like revenge or overtrading. It lets me enter at good prices, the losses are cut quickly and the profits are 1:2 more than the losses at least. One easy strategy on the daily chart you can read here from Fred, a very experienced trader.

What I personally use is a portfolio, which I re-evaluate every week and also I have some bitcoins in Poloniex to catch swing moves from time to time when the setup is right. But notice: I have a setup. I would never ever jump in a trade without knowing where to exit and where to cut my losses. The details of a trading system are not important. It's your own behaviour that makes or kills it.

There is no holy grail in finding good opportunities in the market. What I can just recommend is to learn something, stick to it, journal it in an excel sheet. This way it is easy to improve objectively.

P.S.: Excuse me for my imperfect english. My native language is german but I don't wear Lederhosen at the Oktoberfest or eat sausage everyday. I'm more of a non-alcohlic person and a vegetarian too ;)

Cheers,
Niclas