How I beat the forex market. Or any game.

Image

519190164

Plan, reflect, and know the game

When I first started dabbling in forex, the singular assumption to make money in the game of forex was a simple one: Be right.

If you have that assumption, dump it.

I play games. Computer games, sports mainly.

In games, the goal is to win. To beat as many enemies as you can. Beat more than your opponent. Score more than the opposing team. Follow the strategy.

If you watch soccer, you’d know that it’s entertaining simply because there’s no “sure win”.  Through luck, a goal can be scored. An injury can happen. Bad umpiring.

Computer games, you can lose (or cheat) when there’s a bug to exploit.

Same with trading.

I beat the forex market be reflecting on my edge. By changing my perspective on what exactly is “winning”.

And here I am telling you, to beat the forex market, which consists of small time retailers and big banks, central banks, and cheaters, you’re set up to lose.

That’s the first thing you need to realize: You are set up to lose.

Embrace that fact. And find out why. What are the exploits others are using against you? Who are your opponents?

You don’t know, don’t you?

Acknowledge that.

Acknowledge what you don’t know.

And sharpen your own edge. Your own personal edge that no one knows except you.

When I play a computer game, I want to win, of course.

And pro gamers don’t just “git good”. Yes. Skill is important. But so is patience, deep understanding of their own weaknesses, as well as their opponents’.

Without knowing your opponents in the forex market, and acknowledging you are set up to lose, you need to change the rules your way.

You’re not going to beat the winners if you don’t know what the game is. You’re not going to beat the winners if you don’t know what you don’t know.

You’re not going to “win”, if your idea of winning is making money.

Winning in forex is about sharpening your edge, knowing your own personality, and thinking deeply what the other side of the trade has against you.

Being on the defensive is an option. Trade small. And through many, many trades, start to get a feel of how market action works.

Know what edge the others have against you. Speed of execution. Stop runs. Information you don’t have.

Just like computer games, I aim to win  by understanding how the game is designed. For example, if there’s a mechanic in the game to cook materials or build materials, you simply must know it’s there for a reason. Use it. Don’t say “I’m gonna just ignore it.”

If there’s a way to reduce electrical damage,  find out how to, because there’s a reason why the mechanic is there. Because clearly if you don’t make use of the mechanic, you will lose to enemies who attack with electricity.

ThinkstockPhotos-514070332-300x211

Yup. No electrical resistance=death

So what are the mechanics in the forex market available that you can utilize to sharpen your edge?

Here’s a handful.

  1. You can control lot size. Use it. Brokers want you to maximize your margin. Don’t do it. It’s like going in without “margin calls”, which can kill you.
  2. You can trade 24/5. At different timeframes. Brokers want you to trade quickly, trade more, so they earn commisions and from spreads. So don’t. Trade larger timeframes that are comfortable for you.
  3. News are sentasionalized to stir emotions in you to trade. Recognize it. Ignore it. Read the fine print and realize the ambiguous language analysts use that don’t tell you anything. Don’t trade on emotions. This is a powerful edge you can develop.
  4. There are only few important instruments that matter. The rest are just “made up”, tempting you to make more trades. But don’t forget co-relation and exposure. You’re just being dragged to think the more things to trade, the higher chances you can “hit the jackpot”. No. Focus on the very few that matter. Ignore the rest.
  5. Losing is part of any system or strategy. Remember you are set up to lose. But there are strategies that include “losing” as part of a long term winning strategy. So stop thinking beating the forex market is about winning every trade you take. And when you lose, jump to the next strategy. No.

There are many more. Just like computer game design, understand how the game is designed, and reflect on how to achieve “winning” in an efficient manner.

Know what you don’t know. Know what you don’t have. Know what edge you can never have against those who have privileged access to.

And finally, realize the market does not give you what you want from it.

Instead, take what it offers. And be happy with it.

 

Happy trading.

Be your own Boss with The Smart Casual Trading Method.

Image

635944741686261514734284120_Success_Failure_direct

I came across this post about young Singaporeans succeeding in pursuing their interests, often at the cost of giving up a great future such as a lawyer. Here’s the post:

https://vulcanpost.com/611813/young-singaporean-bosses-ventured-out-of-comfort-zones/

As a Smart Casual Trader, I have emphasized many times that we live in a society that frowns on failure, despite evidence that failures are part of the path to success. It is mandatory to fail to succeed. Well, of course, depends on what success really means to you.

Failing your exams on purpose doesn’t make you a success because it’s just you being lazy and not giving a care about exams. But go ahead and fail your exams, or quit school, if you have a strong motivation, plan, and the fire to pursue your dreams, and be prepared to fail, again and again.

But in the list of successful stories, something’s missing. How about those who didn’t make it? Is it a case of survivorship bias?

Nonetheless, if you read the article, the common theme is the same: embrace failure. Build resilience. Learn from mistakes. Pick yourself up after every fall.

While the article doesn’t cover those who didn’t succeed in the end, I believe those who are not featured, but went through the same trials, have what it takes to succeed, in whatever they choose.

My story is not exactly the same. I don’t have a passion for forex. I simply got sick of being in a dead end job holding up the ladder for others to cilmb upwards with no promise that I can climb the ladder myself anytime soon.

But the process towards success is still the same. I gave up a comfy, well paying job, to pursue a venture where 90% of people fail. Because there really wasn’t anything else I could do. Or, was interested in doing.

Perhaps I’m just a case study of survivorship bias.

Well, I do consider myself my own boss anyway. I have my own method of trading. I make my own decisions, and I think most importantly, I make my own money. I don’t earn a fixed salary, but there is great pride in knowing the money I make, is through my own work, at my own time, instead of being bench marked and set by another department. There’s power in being your own boss. Even if the pay may be less, you know you worked for it, and you earned it.

As mentioned in the article, there is still bias against “pursuing your dreams”. Even a certain minister was against the idea of stepping out of your comfort zone, and instead encouraged graduates to find jobs and learn to love their jobs and stop complaining. To love the woman you marry, instead of marrying the woman you love.

These youngsters prove that it is possible. I have shown it is possible. And the common theme is a simple one:

Embrace failure as steps towards success. Build resilience. Learn from mistakes.

To those stuck in a moment you can’t get out off, be encouraged, be empowered, stop making excuses, make the first step, and stop blaming external factors. Make the choice. We only have one life, and sometimes, only one opportunity.

A Smart Casual Trader is a Reflective Learner

Image

refelctive learnign

I not only keep records of my trades, but use them reflectively to improve my own trading

In the snip above, I reveal my own personal records of my own trades this past week in June and how much I have made so far (bottom right “Sum: 4631)”. You notice some are highlighted in red.

It’s a practice I only just started last week. Green highlights were for trades made good and well, basically trades that were entered and exited as planned. Those in red, even with profit, were trades where I “lost” money. Even if it seemed I made profit, I actually lost on them because I interfered with them, got greedy, or for some other reason, such as setting trailing stops at the wrong time, etc. What ever it was, I deemed those trades to be “bad” trades, as they would have reaped me more profit, if I had just left them alone.

To quote from University of Sheffield’s definition of reflective learning:

As part of the attributes of the Sheffield Graduate, our students should be able to demonstrate that they are: “well rounded, reflective, self aware and self motivated.”

It is also my aim as a coach to others who wish the trade forex on their own to have such attributes, because it is through reflective learning you adapt resilience to an ever-changing market environment.

Simply put, I will never consider myself to be successful because week after week, on reflection on my own trades, I am always discovering how imperfect my trading is, the constant mistakes I’ve made over and over, but also review how to reduce mistakes.

This is how I believe the Smart Casual Trader is the trader who has the resilience to survive through even the craziest of events, because he/she is constantly learning through reflection, and thus able to be nimble in today’s unpredictable market environment. (It has always been unpredictable, except on hindsight, only.)

If you’re trading without keeping records, you might just be playing or gambling, just like a student who comes to class and doesn’t take notes vs the student who takes notes, goes back, and reflects on the learning, which has evidence to prove it is the best way to learn.

So if you’re really keen to be making side income or even a full income from Smart Casual Trading, you need to be a reflective learner.

Happy trading!