My forex journey started in 2018. It was born after listening to a radio advertisement by FXTM, a broker in Nigeria. The ad promised listeners financial freedom by trading the foreign exchange market with as little as 10,000 naira ($20). So I arranged my affairs and went to the Ikeja office of FXTM to attend the seminar on forex trading as advertised.
After the two-day seminar, after listening to fast-talking salespeople who promised huge returns from forex if I only use the strategy taught at the workshop, I quickly registered an FXTM account and deposited $100 into my account. As promised at the seminar, I had already dreamed of transforming the $100 into $1000 in two weeks. There were lots of proofs others had done it, and I was not braindead.
Unfortunately, after a week, after watching prices move up and down on the MT4 platform provided by the forex broker for trading, and after buying and selling all sorts of currency pairs with the taught strategy, I lost my $100.
Bitten By The Forex Bug
The loss did not deter me. The forex trading bug and the allure of quickly getting rich had already bitten me. After all, this was a market where $6.6 trillion was traded daily. The foreign exchange market was bigger than the GDP of Nigeria. So why should I not be involved?
I decided I had lost my money because I was not well educated about forex. A two days education was not enough for the amount of money I wanted. So I researched forex education on Google and discovered Babypips.com. I spent my days reading through the forex courses on Babypips. I hardly slept as I explored the possibilities of forex trading. I learned about pips, spreads, and technical indicators, as well as newbie traps and how to avoid them. My head was brimming with ideas.
The strategy taught me at the forex seminar by FXTM was said to have a winning rate of 65%. I didn’t want any of that. I wanted a strategy that won 100% of the time. I wanted a perfect trading strategy. So, I began researching forex strategies like a cookie monster. I went to the Babypips forum and asked for a strategy. I was surprised when forum members inundated me with replies.
They threw a million methods at me to try out, all promising me instant wealth. The forum taught me that economic analytical skills were essential in forex trading. So, I began learning that also, which brought me to another platform called forex factory, which had an economic calendar of newsworthy events in the foreign exchange market.
I started by choosing three strategies. But now, it was not with a live account. I had to back-test the strategies and decide which was better, so I opened a demo account. First, I tried them out with currencies pairs that had the largest spreads.
I thought having large spreads meant more considerable money. A trader called ForexHorn told me on Babypips that the strategy I had chosen should go with pairs that had smaller spreads. I was now back to the drawing board. He said I was scalping, and scalping needed smaller spreads.
My chosen strategy required my staring at the screen for extended periods. I was a forex gunner, waiting to shoot at the smallest pip. Honestly, my eyes suffered a strain. My back also became painful as I was sitting for a long time. My family life suffered. I wanted to make quick money, and I neglected all other aspects of my life.
Members of the forum at the factory told me that trading the news could make significant gains. Still, with a caveat emptor – I needed to have bought or sold at least thirty minutes before the news and close the position immediately the market had started reacting against my decision. So, I was constantly at the economic news forum searching for news events and what currencies would have opportunities for the day. This decision put more strain on me.
Newbie Expectations Are Always False
Honestly, my life suffered. Going out for even leisure time was out of the question. The money had to be made, and the charts held the secrets. One lesson I learned is that forex trading is not a get-rich-quick scheme. If anyone thinks it is, then you would face the truth the same way I did.
While I scanned the charts, this was my thought process - if I could trade one currency and make five pips, then by trading ten currencies with five pips for each, I could make 50 pips. I set a daily target of 50 pips. Achieving it would give me satisfaction, and I would close the terminal for the day. But that minimum amount never came. The more trades I made, the more I became strained, and my health began to suffer. The more trades I was making, the more mistakes were creeping in.
For instance, I would want to go long and, unfortunately, find myself clicking the button to go short. I forgot even to set stop losses for some trades I took, and it seemed like I would make some pips each time. Instead of closing the transaction for the little pips, I would hesitate and wait for more pips. Down the drain would go that gain.
After a month of scalping and losing trades, I realized that I could not predict the market. It wasn't very reasonable doing so. There were so many forex prophets on the Internet promising me they could. I sneered whenever I read such accounts. No one can predict the market. Not even with a humongous account.
That was what my demo account was. I started with a demo account of $100,000 and at the end of 3 months of scalping, what was left was $320. So I went back to the forex forums and asked them what the problem was. What was lacking in my execution of these strategies that others had acclaimed to be good?
The Key To Forex Trading
They told me the truth that changed my fortunes. The key to forex trading was not how much you made on the market or how efficient your strategy was but money management and self-discipline. They told me to read books like "Trading In The Zone: Master The Market With Confidence, Discipline, And A Winning Attitude" by Mark Douglas, "Market Wizards" by Jack D. Schwager, and "How To Make A Living Trading Foreign Exchange" by Courtney D. Smith.
I devoured those books like a hungry trader, and they changed the game for me. Those books taught me money management, the psychology of trading, and that I have been losing because I was greedy. They taught me that a good strategy was not the answer. A perfect strategy was a fallacy: the simpler the strategy, the better my trading and health.
So, I did away with all the silly gimmicks called oscillators and indicators that were cluttering my charts. I stopped believing the big banks were rigging the market. I started looking inwards. One thing those books recommended was a trading journal. I started a trading journal on Babypips and asked other traders to evaluate the trades I was taking. Slowly, it changed my fortunes. I began to see positivity in my account. I started gaining pips and making profits.
Eventually, I decided I didn't want to make forex trading a full-time job. Creativity was my first love, and I was devoted to writing which forex trading had somewhat pushed to the background. So I decided to start copy trading and allow other traders to trade on my behalf.
Once in a while, I log into my account on FXTM to watch the trades going on. Of course, I can not say the daily profits will make me a millionaire as I expected when I started the forex trading journey, but they pay the bills and keep me happy that I have some returns from my capital.
Recapping the Lessons Learned While Trading
So let me do a recap of the lessons I learned from my forex trading journey.
- You don’t need a financial background to trade forex.
- Don’t beat yourself if you lose some trades. You will always lose. Just make sure you win more than you lose.
- Exercise diligent money management and self-discipline so that your losses don't overwhelm your gains.
- Don't be in a rush to trade often. Instead, trade according to your strategy.
- Have a trading journal. A trading journal helps you understand what you are doing. It helped change the game for me.
- Never believe fast-talkers that tell you to subscribe to their signals that they can predict the market. No one can predict the market.
- You don't need a large account to start trading forex. What you need is a good return on investment (ROI), no matter the size of your capital.
- Lastly, go for simple strategies, and avoid the complex ones. You don’t need a thousand indicators on your screen to trade well.