Hello, Steemit community. My name is Bulent, from Istanbul/Turkey. I'm an Elliott wave analyst and trader in forex, option and cryptocurrency markets. My goal is sharing my best trade setups daily basis, thus I hope I will be able to help some of you to make more money in trading. But in this post, I like to share the beginning part of my trading story and some lessons I’ve learned.
I started to trade 4 years ago in the forex market and at the beginning, my story was the same as almost everyone else's... I lost all money in my account. Then I deposited again and lost it as well. In time, I realized that the forex market is not something which was created to give me some free money and I definitely was doing something wrong. It took a lot of time and cost a lot of money to understand what was my biggest mistake in trading; my focus point. My aim was making money. I know, it sounds quite normal, no one wishes to lose money after all, and making money is the only logical reason for trading. But my aim was wrong. When I took a trade, I calculated how much money I could make. For example, when I bought 1 lot gold with $1000 potential profit, I asked myself a very simple question, why shouldn't I take 2 lot gold and increase my potential profit to $2000. Because of the focusing on only winning side, I had forgotten to look at what I left behind, what I was putting in the risk exactly. And this is the basic explanation of why almost all new traders are overtrading. This is the biggest problem of all newbies. You must focus on protecting your capital in the first place instead of making money. Only that way you can stay in the market for a long time, and staying in the market is the only way of making money in this (actually in any kind of) business. That's why the essential part of trading is risk management.
Lesson 1: Don't put any money into risk for one single trade more than you can afford to lose. Generally speaking, 1% of capital is good risk limit for each trade.
But of course, I didn't have any idea about risk management. So, I took some trades with big lot sizes according to my capital. Sad to say, some of them went extremely wrong. Then suddenly, I had a great idea. I should have added one more trade on my losing trade to bring closer the average entry price to the spot price. It's called Average Down strategy. Let's say my first trade's entry was 10 and the spot price was 12 at that moment. If I sold it one more time in same lot size, my average entry would be 11. So, why not, it was obviously the best thing I could do... But, of course, it wasn't. I like to explain what was the reason for taking such a bad trade. I took it because of my ridiculously high self-confidence of ignorance. Think about it, I looked at the chart and all my fancy indicators, I read the newspapers and listened to all experts and I knew it would go down. So, up moves should have been temporary. That was the self-confidence of ignorance. The market doesn't have to go anywhere just because I believe so. But this wasn't the only reason for taking this trade, there was one more, which was not being able to deal with losses. When I took the second short trade, my first trade's loss was about $500 (5% of my capital) and I didn't want to close it. Why? Because up moves should be temporary and simply I didn't want to give my money away. I want to keep it, it was my money and it was more money than I could accept to lose. This was a huge mistake.
Lesson 2: Calculate the possible loss of the trade in the first place, deal with that you can lose this money and only then you can pull the trigger. Don't try to recover. Close the trade and look for the new opportunities.
After adding 5 more trades, my total loss became about $6000 (60% of my capital). I could only sit in front of the computer and look at the gold chart and news desperately. Even sleeping was very hard. Basically, the pain was unbearable. Suddenly, I had another great idea. It just came to my mind. I should have taken a trade to cover all my current positions. I took a long trade in same lot size with my short trades. It's called hedging and it is a very attractive idea but only if you don't know anything about what you are doing. Thanks to hedging, I had a chance to look at everything again and decide what should I have done. But of course this idea was just good on the paper, in reality, it was extremely wrong as well. Because I was still believing that I could fix the problem. I could not. I lost my account at the end. But I’ve learned my lesson and never ever have repeated the same mistakes again.
Lesson 3: Don't hedge your trades. If you are such a bad trader, who put yourself such a desperate situation, you cannot be good enough trader, who can fix the problem.
Of course, these 3 lessons are not the whole story. There are many others, but these are the essential ones to stay in the market. As long as you can stay in the market, you have enough chance to learn more and make money. I was lucky, because I had enough money in my bank account, so I deposited again and I have stayed in the market.
Thank you for reading.
Until next time, stay in the market.
Welcome to Steemit platform, from all of us in promo-nigeria. Steemit is a beautiful place to be and we are sure you will be happy here. Get to know more by blogging consistently. Never be discouraged, seek for assistant when necessary. Cheers!
Thanks. Glad to be here.
Welcome in steemit my freind ❤️
Thank you.
You are welcome my freind ❤️
Hi Thank you for #introducingyourself. Im myself quite new in steemit community but I realized that there are few things you could do to have a better start:
Mostly I invested a little bit in STEEM in order to purchase STEEM POWER and STEEM DOLLARS. Why? Its simply important. Without initial investment it will be very hard for you to build reach here and be noticed.
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If you will reply to this message (that would allow me to believe that we may develop mutual engagement and help each other) then I will follow you and upvote some of your future posts.
Cheers and good luck.
Hi Thank you for #introducingyourself. Im myself quite new in steemit community but I realized that there are few things you could do to have a better start:
Mostly I invested a little bit in STEEM in order to purchase STEEM POWER and STEEM DOLLARS. Why? Its simply important. Without initial investment it will be very hard for you to build reach here and be noticed.
Im not sure if you ever heard about this site:
http://steemd.com/@your_username
Example: https://goo.gl/3mquu1
Perhaps you know it already :)
If you will reply to this message (that would allow me to believe that we may develop mutual engagement and help each other) then I will follow you and upvote some of your future posts.
Cheers and good luck.
Welcome to steemit
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Hi Thank you for #introducingyourself. Im myself quite new in steemit community but I realized that there are few things you could do to have a better start:
Mostly I invested a little bit in STEEM in order to purchase STEEM POWER and STEEM DOLLARS. Why? Its simply important. Without initial investment it will be very hard for you to build reach here and be noticed.
Im not sure if you ever heard about this site:
http://steemd.com/@your_username
Example: https://goo.gl/3mquu1
Perhaps you know it already :)
If you will reply to this message (that would allow me to believe that we may develop mutual engagement and help each other) then I will follow you and upvote some of your future posts.
Cheers and good luck.
Hi Thank you for #introducingyourself. Im myself quite new in steemit community but I realized that there are few things you could do to have a better start:
Mostly I invested a little bit in STEEM in order to purchase STEEM POWER and STEEM DOLLARS. Why? Its simply important. Without initial investment it will be very hard for you to build reach here and be noticed.
Im not sure if you ever heard about this site:
http://steemd.com/@your_username
Example: https://goo.gl/3mquu1
Perhaps you know it already :)
If you will reply to this message (that would allow me to believe that we may develop mutual engagement and help each other) then I will follow you and upvote some of your future posts.
Cheers and good luck.
Hi Thank you for #introducingyourself. Im myself quite new in steemit community but I realized that there are few things you could do to have a better start:
Mostly I invested a little bit in STEEM in order to purchase STEEM POWER and STEEM DOLLARS. Why? Its simply important. Without initial investment it will be very hard for you to build reach here and be noticed.
Im not sure if you ever heard about this site:
http://steemd.com/@your_username
Example: https://goo.gl/3mquu1
Perhaps you know it already :)
If you will reply to this message (that would allow me to believe that we may develop mutual engagement and help each other) then I will follow you and upvote some of your future posts.
Cheers and good luck.
welcome.. good to have you here. :)
Thank you. Glad to be here.
Welcome to Steemit and good luck :)
Thank you Hanen.
Welcome aboard Bulent, happy to see you here.
We need some experts here to make sense with all the market craze.
Hope you will enjoy you time here and share with us some of your valuable knowledge.
If you have any questions about steemit I will be happy to assist!
Welcome :)
Thank you. I hope I will share some helpful contents.
Knowing that I can ask your assistance means a lot, thanks.
hi waveanalysis, it’s nice to see new face on steemit, hope you will spread positive vibes in steemit.and keep up the good work on steemit...;-) and be regular on steemit it will make grow you faster... ;-)
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Thanks @adityajainxds
Thank you. I will try to give my best. I will check your posts. I'm sure they will be helpful.
Thanks for talking about Forex here. Hey man, I'm Oatmeal Joey Arnold, and welcome and I love Bitcoin and trading too.
Hi Oatmeal. Nice to hear that you love them. I hope you are making money by trading.
Which is better, day-trading, or decade-investments?
In terms of cryptocurrencies, I believe that investing is better, but "decade" is a very long period of time. You should have a couple 10 million dollars in order to make enough money by investing for such a long time (if decade-investment doesn't mean anything else, I'm not sure). But, I think there is no such thing as better. Which one is fitting you better, this is important. It depends on your capital, your lifestyle, your habits, your daily occupations, your risk appetite etc.
Good, agreed, it depends maybe. Like, it is better to invest long enough, and maybe ten years is too long. And invest in different things and only in what you can lose.
Investing in different things is the best idea.
Welcome to the community.
Great introduction post.
Will follow you and look forward to reading some great information.
You also made some excellent points about trading and using points.
I do this in crypto, matched betting and other bits I do, always split the bank down into points and commit on a MAX of 5 points per trade/bet.
You may not make as much but you are never risking your entire position.
Good luck on your journey
Thank you very much. Glad to hear that you have some risk management rules. I'm not sure what means 5 points exactly, but limiting risk like you do is always best thing can be done in trading.