The Formula 1 driver’s environment has changed considerably over the decades. The cockpit of a 21st century F1 car is now a high sided, high tech survival cell in which the driver has almost all the controls close to hand, on the steering wheel.
Drivers call it their office, and indeed a Formula 1 cockpit is their place of work. Space is limited, but it’s crammed full of features that enable them to master these ultimate racing machines through violent acceleration and braking as well as 5G lateral loads when cornering. Because the controls are so comprehensive, the cockpit environment would prove a mystery for any F1 fan should they get behind the wheel. An F1 driver from the 1960s would be shocked by how many buttons, switches and toggles there are, and by the fact that there is not a single dial or gauge. Even a driver from the 1980s would be wondering where the gear lever and clutch pedal had gone. Ayrton Senna’s 1988 title winning McLaren MP4/4 had a cockpit so simple that the steering wheel had no other purpose than for turning the car, so nothing stands still in F1.
F1 driving and managing a F1 steering wheel, is very similar like learning how to trade forex, gold and indices. It is seen as dangerous and something you simply can’t do. Of course you can make a million excuses for not starting something but I believe anyone can learn this. Would you jump in a F1 car and start driving on the race track ? Would you start trading real money without any strategy or practice ? Forex trading or F1 driving is something you have to practice by doing in a simulator first before doing your first REAL race on the track or your Real Money trades. So time for another update in our Smartphone Challenge !
Forex trading skills is part of my EARLY Retirement plan. I hope you read my (EARLY) Retirement Plan blogpost.
Today I am informing you about the progress of our forex trading skills.
Our Key Learnings from trading a 400$ Demo Account 3
The consistently profitable forex trader is an expert. just as an expert farmer understands seeds and soil, and the expert F1 driver knows the difference between each chicane he has to take in relation to his car…Where does this expertise come from ? How does the novice forex trader become an expert ? This is the million dollar question.
Make no mistake about it, when you step into any market, including the forex market, you have decided you will outwit and outperform some of the most determined, intelligent, and well-resourced people in the world. All those impressive people have one goal : to take your (or my) money. How can you make money in the markets, knowing who you are up against ? The answer is much simpler than you would believe. YOU MUST PRACTICE !
Practice your craft. Practice your trading. This is the simple way to become an expert. Simple does not mean easy, because many traders expect to become experts without practice, and sadly they never achieve expertise. Consistently profitable trading is yours if you practice trading and become an expert.
You now have the secret formula to achieve consistently profitable trading. Will you use this secret? The best estimates suggest as many as 74.8 percent of traders do not use the secret. This is because 74.8 percent of forex traders do not consistently make money trading (Forex Magnates U.S. Forex Brokers Profitability Report for Quarter 2, 2011). The 25.2 percent of consistently profitable traders practice trading to get better at it.
Only 25.2 percent of all of the traders reading this will decide to practice trading to become an expert. It is no coincidence that about 25.2 percent of all traders are consistently profitable. Practice helps achieve expertise in nearly every sport and vocation. Did you think Tiger Woods became expert in golf without practice ? How about Roger Federer in tennis ? It is interesting to see how the vast majority of aspiring traders expect to immediately become successful without putting the effort into becoming an expert. Some traders rely on trading tools to spit out trade ideas without understanding the mechanics or fundamentals. Expert traders put the effort into becoming an expert. It is ironic that many traders are attracted to the trading lifestyle, thinking that trading will allow passive income to accumulate. This is certainly true, any trader can make money while sleeping, but expert traders are much more likely to achieve consistent, passive income from trading. Trading is like any other job: Practice and effort must be well-placed in order to reap the rewards.
The expert trader may be able to quickly make trading decisions and place trades, but these decisions are the fruits of many hours of practice, in nearly every instance. Traders must earn their pips through practice. Practice means confidence. Practicing your trading system will enable you to keep trading your system, and avoid all distractions and excuses (e.g., terrible-system traders and bad-market traders) along the way. Practicing your trading system will allow you to enjoy the confidence of knowing when you place a trade how likely you are to be successful with that particular trade.
Would you enjoy trading more if you had a quiet, unshakable confidence in your trading system? Would you find it easier to walk away from your computer if you knew the precise likelihood that your trade would be a winner? Would it be nice to know that you will avoid the excuses bad-market traders and terrible-system traders make? What would happen if, from today onward, you maintained confidence in your ability to extract profits from the market even through the ups and downs that are inevitable in any trader’s life? Consistently profitable traders, otherwise known as expert traders, have one thing in common: They test their trading systems and practice it a MILLION TIMES. These traders practice their trading systems over and over again until they are a robot in execution.
Today I am 11 month learning how to trade forex, gold and indices. In February I started with a 500$ account and traded that account until 1,4 Million $ at the mid of July 2019. Key objectives of the demo account 1 was to test my strategy and optimize it with every losing trade. Finding out my correct lot size for my account was the biggest challenge in the beginning. Managing risk and identifying the correct quality setup was another challenge. Finding that correct entry and controlling emotions were other topics I had to work on.
Then I started the account again with 10K and blew it up in ONE week when I tried to trade NEWS event. Next week after that disaster I started again DEMO ACCOUNT 2 with 10K and traded this to 400.000$ in two and half months. (Start of September) You can read about my key learnings in the previous blog post.
The 3000$ Smartphone Challenge : Perfect Practice Makes Perfect !
Early September I started again with a 400$ account. I implemented a standard process where I prepared for the week with a charting analysis and weekly news overview. In the mornings at breakfast I reviewed within 20 minutes the trading opportunities and set the necessary alert notifications on my smartphone. For every opportunity, I prepared a trade plan in my head.
Based on the previous two demo accounts, I knew that most pips could be gained with trading gold. The gold price fluctuated from a price point of 1550 to a low of 1460$ which gave major trading opportunities. At the end of September I had a trading balance of 474K and I learned that I could increase my lot size as my account grew.
From the moment I achieved 100K I started trading with a standard lot size of 1, 3 or 5. I quickly learned that I could make 10K a week while managing risk properly. In the second week of October I learned that I could maximize more gains by trading the indices that are co-related to gold. If indices went up, gold went down. I discovered trading GER30, NAS100, US30 and other indices offered great gains when trading the trends. I optimized the strategy for this specific type of asset and made some adjustments on the trading strategy. This resulted in a big gain of 314K in one trade when markets broke out to the upside,bringing the account to 857K. Below you can see the gold XAUUSD chart with my prediction analysis from last sunday 27th.
On the 25th of October the account hit 995K. On the 25th of October at 6 pm CET I got a SELL alert on gold on my smartphone and I did enter with BIG lot size. Lot sizes of 10x and 30x. I was absolutely sure this was going down. I knew there was an imbalance on the gold futures market and I was risking 400-500K to make 2 – 3M. I was SO CONVINCED about this trade setup. The result was an account of 3,8M as I banked 2,9 Million with that ONE trade. It did prove to me that you can execute this in a real money account.
With a 3,8M account size, you can trade with lot sizes that risk 20K per trade. You MUST ignore the numbers but only look at the trade setup. Your mental mind can not grasp this but the goal is to become robotic in execution. A trade of 10$, 2000$ or 20K $ is not different in trade setup. That’s why I always say to new novice traders, HIDE that Profit & Loss bar as it messes up your emotions. The account is now 945K and I also learned it is possible to make 100K per day…. imagine that ! In the past months I have improved my skills from making 10K a week to 100K a day…. things that Citibank, Deutsche Bank and other big international banks do but won’t teach you ! Imagine if everyone would learn this…would they still sell their funds or bank loans if people can generate this kind of money out of the markets? Think…and conclude !
Our Next Milestone
So now we did execute our strategy three times in three different accounts successfully. I have been coaching Mrs DividendCake in learning the strategy. She knew NOTHING about forex and now makes 300 – 400$ per day in her demo account. Once she made 1300$ in a day, she realized that she could do it !
Our first goal is to finish this demo account hopefully by 1st of November with 4 MILLION ! Then we ONLY focus on our real money accounts that we have setup at different brokers. The key is to trade this account to 3.000$ this year. Modest…I know if you have traded 400$ to 4 Million. Let’s see what we can achieve in the next two months.
Final Words
If you have read our Financial and Travel Objectives of 2019, you know that our goal for this year is to earn 15.000$ passive income. In order to achieve this result, forex trading is one of the different strategies to reach that goal. I consider myself still in phase 2 FOREX trader as I have been practicing to become an expert. Now I am ready to drive and enter LEVEL 3 of the FOREX TRADING SKILL SET. I master the buttons of the steering wheel, the strategy has been tested and optimized, the risk has been defined. Now we are ready to take this to the NEXT level. Can we trade a real money account from 400$ to 4 MILLION $? Let’s see. I am definitely a better trader month after month and it doesn’t take me hours. My analysis on Sunday result each week in 3 to 5 potential winners. I prepare myself in the morning at breakfast each day and all trades are already prepared and ready in advance. Whether they will trigger or not, is another question. I sometimes miss a trade or the trade setup never comes… The goal is to trade only QUALITY TRADE SETUPS which lead to 98% gains. The end game is simple… 4 Million $…the sooner the better. Whether I do it or my lovely wife Mrs DividendCake, it doesn’t matter.
The key advantage is that I can do this from my smartphone everywhere where I have WIFI or an Internet DATA connection….
The key is improving continuously our skills, our trading psychology and our risk management. I am not a ROBOT yet, but I am always ONE STEP closer to my goal.
Stay tuned how we progress in coming months…it is definitely an exciting journey.
This is the end of this blog post.
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