What Your Future Trading Self Would Tell You 10 Years From Now
I hate to open with a cliché, but it’s an important one: The reality of trading is that over 90% of retail traders who start trading a live account will ultimately fail; losing money and suffering emotionally all in a short space of time. The typical trader will start live trading way before they are ready, they risk money they shouldn’t, have no clear capital management strategy, they are not mentally prepared and lack discipline in all areas.
To make a simple analogy, would you put a tennis player in his first few years on the circuit into the top seed professional tournaments? Sounds crazy, right? Well as a trader, when you dive in with all your optimism and enthusiasm to beat the market and make money, you’re doing something equally as crazy, yet the mainstream accepts it as normal. This is why the cliché is unfortunately very true; because so many people start trading before they’re ready.
Jumping into the market and trading live before you’re ready, almost certainly ends in you losing money. In the end, the only thing that keeps you in the game is your bankroll, and if you burn through it before you know how to trade properly, you’re going to fail, obviously. You must properly prepare yourself and arm yourself with knowledge and experience, before risking real money. This way, you will give yourself the best shot at not ending up like most traders, who fail. Trading is about staying afloat long enough to be able to take advantage of big moves in the market, and if you trade away your capital too fast, you won’t be able to do this.
However, there can be a different trading reality for you, it doesn’t have to be this way!
What if your future self (10 years from now), could sit down and have a conversation and give your current self advice on all the mistakes that ultimately led to your failure? What do you think you would say?
In writing this article, I imagined that I was sitting down with myself as a beginner, 15 years ago, sharing all my experiences, highs and lows, traps and pitfalls, triumphs and tribulations and the wisdom and insight I’ve learned from all of that. Here is what I would say…
A message from yourself 10 years from now…
– “Dude, don’t trade so much, slow it the hell down!”
The very first thing I would say to my former trading self is to slow it the hell down. Not to be crude, but honestly, I have seen more people blow trading accounts from simply trading too much than I care to admit. I too was guilty of over-trading in my early days, and I know how quickly it can destroy your trading account, your mindset and potentially even your life.
The lesson that the market will always be there, can be an expensive one to learn. But, it doesn’t have to be for you. If you heed my advice here and listen to what I’m saying and implement it, you can largely avoid all the pain and suffering that goes with over-trading. The point is, the market isn’t going anywhere! Markets have been around since the 1700’s when people first started using candlesticks charts in Japan to track rice prices. Barring the end of the world, markets will be here tomorrow and forever. Don’t get your pants in a bunch, slow down and realize if you miss a trade, it’s not a big deal, if you have to wait a few months to trade live, it’s not a big deal. Whatever you do, don’t be in a rush to make money, because that will be the thing that prevents you from making money!
I have an excellent article that shows in detail why low-frequency trading is far more lucrative than high-frequency trading. As the old saying goes, “All good things come to those who wait”. It’s not just a general saying, it’s also a fact of trading. Let the market come to you, meaning, let those obvious trades develop, don’t force a trade that simply isn’t there. The market will show you its hand, so to speak, if you simply wait for it to do so. The last thing you want to happen is not having any money to trade with when the market does finally show you its hand!
– “Dude, trade smaller position size!!!”
The next thing I would say to my former trading self is to respect and protect your bankroll because it’s the only thing keeping you in the game. In trading, your bankroll, or trading capital, is your tool and your equipment, it’s the supplies you need to make your money. Just like a doctor needs his or her medical supplies and equipment, you need your bankroll. The thing that most beginning traders underestimate or don’t understand, is capital preservation. Preserving your capital so that you can take advantage of the big moves in the market when they come along, is one of the keys to long-term trading success. Your trading capital is your life-line in the market, treat it like oxygen, without it, you cannot ‘breath’ in the trading world, and so you will die if you don’t preserve it.
When you start trading live, you must start smaller and build up to larger amounts over time as your skill and confidence improve. You will not achieve success as trader staring out trading large position sizes. So, you need to understand capital preservation as discussed above and position sizing. Most beginning traders know little about these topics or they ignore them and erroneously assume they are less important than they are or that they will “figure them out later”, HUGE mistake, HUGE (Donald Trump voice).
– “Dude, let trades play out and master patience. Please.”
Don’t interfere with your trades Nial, have patience, please. That is the next thing I would tell my former trading self. I would stress the low-frequency approach I discussed above and to avoid day trading.
As beginning traders, it’s hard to even realize, let alone accept the fact that trades take time to play out, often longer than we desire or expect. So, it’s very easy to get into a game of constantly closing perfectly good trades early, before they have a chance to move in your favor and hit your target. This is called getting “shaken out” of a trade. You must avoid this. You have to let the market take you out most of the time, rather than taking yourself out.
I would tell my former self that the market often moves further and stays over-extended in one direction longer than most people ever expect or think is possible. How many times have you thought or said to yourself “The market can’t possibly keep going!”, only to see it do exactly that? This is a common beginner mistake. You cannot assume anything about a market. Let the market and the price action guide you rather than making up stories in your head about what ‘should happen’. The market doesn’t care what you think should happen, it’s going to do what it wants regardless of you or anyone else.
In my early trading years, I cannot tell you how many times I have closed a trade out too soon, only to see it go on to be a winner, without me on board. There is perhaps nothing more excruciatingly maddening in life than ALMOST making a lot of money but because you weren’t disciplined or patient, letting it slip right through your fingers!!!
I would tell myself: Patience and its ‘brother’ self-discipline, are your greatest allies in this game we call trading. In addition to mastering your trading strategy, you need to become a master of yourself, which means mastering the ability to stay disciplined and patient. You must master these via whatever ways possible. This is largely something that cannot be taught. You just have to dig-deep and do it!
“Dude, just stick with the one strategy”
Master one strategy first, then add if required. Build your trading arsenal one ‘weapon’ at a time. But, don’t deviate outside of your core trading philosophy and beliefs.
Often, one concept or trading pattern / setup is enough to make you a fortune. You learn to trade a concept, it makes you money, you run with it and you ‘strike while the iron is hot’, pyramiding into positions especially during your winning streaks. What you don’t want to do is get overly-confident and start bolting on new tricks and toys right after you find something that’s working (many traders make this mistake), go with what works. If you try adding too many things too soon, you will end up over-trading and become over-whelmed and frustrated. Remember, as I always say, Keep It Simple Stupid!
You need to avoid temptation, difficult to do in trading, but necessary if you want to succeed…
There are logical ideas and there are ‘hocus pocus’ ideas, so don’t be lured astray. Remove clutter from decision making in all forms. The news or fundamentals will rarely serve a short-term trader positively so believe in the technical analysis, the price action.
The world is a simpler place than most believe, as are the financial markets, so stick to reading the price action of the charts and anticipating trades based on that price action, whilst always managing risk appropriately.
“Stick with a good thing if you’re lucky to find it, kid.”
Take a deep breath, life and trading are marathons, not sprints…
Finally, the most important thing I would say to myself 15 years ago, is something applicable to both trading and life in general. As we get older, we learn, we gain wisdom and insight, indeed this is the silver-lining to aging. Whilst I am still relatively young, at 33 I have learned a lot. The one thing I can honestly say more than anything else is that life and trading are both won by thinking of them as and treating them as a marathon, not a sprint.
Good things seldom happen by acting before you think. We are told as kids to “think before we speak”, yet it’s so hard for a kid to do that because kids are largely operating on impulse and feeling, with very little planning, forward-thinking or recognition of the consequences of their behavior. It is no different in trading really; those traders who simply act (start trading live) without a trading education and without planning ahead are the approximate 90% cliché who lose money.
So, former Nial self, my parting words of wisdom to you are:
“Take a deep breath kid, it will all work out in the end if you just slow-down, learn from others and think about the future consequences of your actions. Don’t rush, the market isn’t going away, but your bank account just might if you don’t heed this wisdom.
2017 – Nial Fuller“
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55 Comments Leave a Comment
No better words of wisdom. This is what every trader needs to know and with this kind of wisdom, trading success has no choice, but to bow down to you.
Seriously, love reading these gems. Thanks so much.
delightful article! even goosebumps have gone. thanks
Holly grail !
Just come across this article Nial, an excellent one. Really thanks for the sharing!!
Nothing else but the pure truth… I would say to myself…… Find Nial ASAP!!
Thanks for every word you shared with us … I was trading everyday and too many positions that is why I lost my money… really good advises THANKS
Awesome Inputs, Yes I have to slow down. My drawbacks are, I keep trading whole day and I don;t let the market run behind me..
Now on, I will be doing low trading and Let the market extend hands to me to set a right trade.
Thank you very much Nial.
How so true. I.ve been caught by the action bug more then once. After a couple profitable trades, a feeling of confidence takes over, and the feeling that your’re in control. Then wham, your profits erode away.
I have no words here, mine is to meditate on this and do right.
Nial, thank you very much to keep us on track! Very great article mate!
Thanx for the great article, I really look up to you and can’t wait for another article :-)
thanks Mr Nial .. this will help a lot as im still a beginner
This is the article everybody should read, everybody I mean beginner traders, like me, but those who have been trading for a longer time, too. Patience is what I lack, searching and seeing trades that don’t exist, too. I will definitely keep this article close at hand, especially when finding a new position.
you are indeed a blessing to this world. if this not true then the truth does not exist in this world
Great article Nial. You are a trading gem
Excellent words of trading wisdom as always. I remember doing all of those things! And even to this day I sometimes need to tell myself slow down. Wait like a crocidile to get the BIG ONE and not be tempted to waste energy on the little fish that will suck up my energy i.e. capital, as they wander and shift aimlessly.
Its my pleasure that i am reading this article.
thnx sir it will be realyy helpful for new bees
Great article, trading pearls !
Brilliant Article Nial. Thank you so much.
Nial – One of the best – i.e., wisest – articles on trading that I’ve ever read. I pray that your readers take heed.
I made all the mistake you stated above. I have now decided to trade only on 4hours and daily. With that it would reduce my frequency automatically. Hoping to share good news soon.
Great article Nial’s gets you thinking about where you are in your trading journey!
thanks Nial’s always look forward to your articles.
Great wisdom for 33 year old, you could be ahead of your time Nial’s ….lol
Vancouver, BC Canada
You Just addressed d real Issue in forex. Thanks
Thank you Nial. Well written ! How many tricks or how much learning will help if we may not forecast the market trend? Why to learn the technical analysis if we cannot predict the market? I was learning chart shapes are very important to predict the direction of the market. That sometimes does not work as well. Then what the point of learning all the tech analysis or tricks?
Thanks & look forward to your comments please. Best regards, Dr. Altaf
This is a very helpful article especially to starting traders, or even to tenured ones yet still struggling like me. Honestly, your articles are my “daily bread” now. I never finish my day without reading one or two articles, its part of my daily plan and routine now. Thanks for sharing your expertise. I would really do the same if I have an ample of results.
Thank you Nial. you are great. I have been reading some of your article for last two day. whatever I read is 100% true.
WISDOM IN APPLE SIZE OF GOLD, ITS A SIN FORM ME TO READ THINGS LIKE THIS WITHOUT AT LEAST SAY THANKS FOR THE HEART OF LOVE , ” the market is not going anywhere ” THANKS SIR
Please keep drilling this wisdom into our heads….suddenly it’ll pay off for us all!!
Great article again!!
This is a great article.
Best article you have ever written Nial. Work in = results out. People think that it is easy but it is quite the reverse. If you cannot prove to yourself that you can make money before you start trading live, why start and lose?
Thanks Niall for the piece.greatone
Thanks for the piece.great one
We must NAIL what older NIAL said to younger NIAL in order not to FAIL when we SAIL the market.
Alot of great points for people to heed in one article..
As a new kid on the block in trading land, I value and appreciate these articles as much as all your knowledge, experience and insights you provide on strategy. You can provide me with all the knowhow and a solid strategy, but if I do not deal with my own behaviour, emotions or whatever, my probability of succeeding in trading will be very low.
Thanks for sharing Nial. It is all most valuable stuff and I am glad i came on board.
Thank you so much I have learned a lot from your article
“You need to avoid temptation, difficult to do in trading, but necessary if you want to succeed”
Its part of the article, it sums up what our ‘brain’ works at and with while we are trading.
But,Nial, you have done us a whole lot good.
many thanks for your awesome article, cool
Words of wisdom my friend
Inspiring and worth-learning Coach. Thank you. God bless.
Thanks for sharing your experience.
Many thanks Nial. Such good advice!
While reading your piece, I begun thinking where I might be in 10 years, and this showed me exactly what I should do right now ! … Thank you Nial for all the details, and for calling a cat a cat ! …
Thanks Nial…. Great advice.
Thanks Nial… Great advice.
Been trading now for 5 year. Last two years pritty much broke even before then lost. I’m getting better but as they say there is a difference between knowing the path and walking the path
Hi, Dear Nial, Thanks for weekend postre, valuable article. Your every article is road-map to success.This article is unique and cover all basic aspects of forex market. Thanks and happy weekend.
stated wisely! Thanks for Your sharings, Nial. Invaluable advices…
Im hearing ya Neil. Some trading Zen from the master. :)
Wisdom is the hardest thing to convey. Especially to the inexperienced.
Its profundity is obscured by its simplicity because the logic of our intellect has predetermined that greatness is complex and lies beyond great effort.
Im sure that if i embrace the wisdom of your experience, that my great effort shall be reduced.
Thank you Nial. I Love You.
Sir Nial Fuller I really love and try to imagine your every prediction. Your every analysis really changed my trading mind. A future plan is the most effective for anything. In the case of forex trading is so much important because, If you have no plan about your trading then you must be balanced less of your trade guaranteed.
Thanks for your valuable sharing story.