In this episode of Truth About FX, Walter talks about the 3 things he wished he knew — and so should you! — before he started trading. Is it helpful to ask from other traders the answers to your questions? Walter also talks about the importance of forming the right beliefs and setting your own limitations. He also shares an interesting story about a guy named Steven Bradbury and how this can inspire you in your trading journey.

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In This Episode:

00:53 – guaranteed drawdown 02:05 – stubbornness or determination 04:19 – psychological cage 06:15 – speed skating 08:30 – race as fast as you can

Tweetables:Trading sets you up on a path

@TruthAboutForex http://fxtr.co/ax" rel="noopener noreferrer">[Click To Tweet].The best traders are resilient  [Click To Tweet].Don’t let anyone tell you what to do [Click To Tweet].

Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.

Hugh: Hi, Walter. What are the three things you wish you knew when you first started trading?

Walter: Probably would be number one would be that trading a system, it sets you up on a path that is based on the characteristics of that system and the way that you apply risk to that system, that sets up your equity curve.

Another way of saying that is depending on how you use risk with your trading strategy, you are guaranteed to have certain types of drawdown. I wish that someone should have told me that you are guaranteed that. That really you can change the whole look and feel of your equity curve by the way that you manipulate risk. I wish someone would’ve told me that. I really do. 

Number two is I wish someone would’ve told me that your trading system that you choose is not nearly as important as how you deal with the hard times as a trader, the difficult times.

The other way of saying that is the best traders are resilient traders. Resiliency is, I believe, is the key psychological component to trading. And if you read the interviews of the Market Wizards you’re going to see this over and over again.

They had this determination that no matter what happened, they’re going to make it work. A lot of people don’t do that. They try trading like you know, “The trading thing didn’t work out so I’m gonna go flip houses” or whatever. There’s a lot of that kind of stuff going on. They’re not really set on making the trading thing work.

There’s two pieces to that. There’s the resilience part and then there’s stubbornness or determination. Determination will not get you there as a trader. It is resiliency that you need. You need that other part if you can’t bounce back because the biggest deal in trading is what you do after you run into a losing streak. That’s what works.

Probably the last thing that I wish someone told me is that you really...