Can You Become A Great Trader
May 22nd, 2009
Let me tell you about a great experiment in history. This experiment is a perfect example of developing and then implementing a winning trading plan. This experiment was known as Turtle Traders Experiment.
Richard Dennis and Bill Eckhardt were two great traders and partners who were arguing one day on whether great traders are born or made. This was the year 1983. Both were commodities speculators.
Richard had the opinion that great traders could be made through good training while Bill argued that great traders were only born. They could never be made. To clinch the argument, Richard suggested that they select and train a few traders to see how they perform after the training.
The Great Turtle Trading Experiment in history was born that day. An ad was placed in the Barrons, Wall Street Journal and the New York Times. 1000 people applied for the experiment.
After short listing only 80 were called for interviews. In the end only 13 traders were selected for the training. The students were called Turtles.
The students were given a complete trading plan that contained exact rules how to trade. Richard used to say that he could teach his rules to anyone. But as long as someone was not consistent in applying those rules and sticking with them during rough stormy water, they were useless.
So, the actual success in forex trading lies in having a good trading plan; You need to have a trading plan that is exact, mechanical and ruled based and does not depend on your emotions. Learn to control your emotions in trading by depending on a forex system based on rules.
Then you need to apply those rules with discipline and consistency. Without discipline and consistency, you can never become a great trader!
How many times, you must have heard this oft quoted statistic that more than 90% of new traders fail and give up trading in a few months. Only a few lucky ones survive in the long run.
Yet, still millions of ordinary people around the globe wake up everyday in the morning, turn on their computers and try to make a living trading the financial markets electronically. Have you ever thought why?
Still the possibility of hitting big never deters people from starting new businesses. The same applies to forex trading.
Kathy Lien is a professional forex trader. She is a great teacher and writer too and has written many best selling books on forex trading. In one of her books, Millionaire Traders, she relates the story of 12 ordinary people who beat the Wall Street at its own games and made it big.
The rag to riches story of Hoosain Harneker is remarkable. He had lost almost all his saving in a failed business venture.
He had no money. He was heavily in debt. One of his friends told him to trade forex. His friend emailed him the forex system that he used to trade forex daily. The forex system was based on simple moving averages. Hoosain did not have even a few hundred dollars to open an account with a forex broker.
Hoosain took six months to save $1000 to open an account so that he could trade forex. But during those six months, he practiced and practiced the forex system on the demo account.
He promised his wife that he would never trade forex again if he blew up that $1000. All the 12 people in the Millionaire Traders blew up their accounts in the beginning except Hoosain.
Hoosains only advice to beginning forex traders: First learn forex nitty gritty. Practice on your demo account and double your amount three times in a row. Dont take up live trading before that. Paper trading will make you confident to face the daily emotional turmoil of the forex trading.
Now, most of the new traders jump straight into live trading without practicing much on their demo accounts. After a few consecutive losses, they give up, considering forex trading to be difficult.
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