10. Expert educators
Feb.12. Before I signed up for this forex trading course, a friend told me that we would be able to watch expert educators live. We could make trades with them as they made trades. To get a job as an educator, they had to be making their trades successfully at least 70% of the time.
I signed up for this course and was told that there are lots of Facebook groups made up of course students. I joined one of the local groups and found out the ethos of the group. We all like to help each other succeed. We go out of our way to help each other.
One evening I went to a group member’s house to watch an educator called Matty. People were following Matty live and making the same trades he made.
Matty had an interesting backstory. He had enrolled in the school about 3 years previous, set up an account with a forex broker, deposited $500 in the account and lost it all. Then he deposited another $500 in his account and lost it all.
He decided he was doing something terribly wrong and he had to change his ways. He deposited another $500 and began to develop a system of rules to guide his investing. They eventually expanded into the list you see below.
The expert educator’s list of trading rules
I may not be listing these rules exactly. It’s what I gathered from watching a number of recordings of Matty’s teaching sessions.
- NEVER invest more than 3% of his account in any one trade.
- If he has increased his account by 8% in one day, stop trading until tomorrow.
- If his account has decreased by 5% in one day, stop trading until tomorrow.
- Do not trade more than 2 hours in a day. Even then, separate that into 2 one-hour segments with an hour in between. Each trade he makes will be only 3 minutes long unless he decides to rollover. (That’s a subject too complicated for this blog post.) That’s lots of candles & indicators to examine. So, after so much concentration, the probability of making mistakes is too high. Just expect your brain to shut off for a few seconds once in a while.
- Start each trade shortly after a new candle forms. Never wait more than 2 minutes. He wants to finish his trade before a new candle is formed.
- NEVER trade on weekends (2 pm Friday – 2 pm Sunday Pacific time).
- If he loses 2 trades in a row, he stops trading that currency pair until he get strong signals of at least 4 points to buy again.
- There are various very good trading strategies. Find a good one that suits you. Stick to it. Have lots of patience & discipline. Take good notes of what you are doing and record your system.
Compound interest, the secret sauce
Note this phrase in the first rule above: 3% of his account. That’s an incredibly important phrase to remember. If he is investing 3% of his entire account, he is using compound interest.
What if he had $1000 in his account. If he traded 3% of his account, he would be investing $30. Now he would have $1030 in his account. If he traded 3% of his account, he would be investing $1030.90. Each times he wins a trade, his next investment will be larger.
This concept is so profound that Albert Einstein called it the 8th wonder of the world. That’s the name of a YouTube video I created. You should take the three minutes required to watch it right now.
You can watch it at this web address: https://www.youtube.com/watch?v=BqfGtNZM7H0. For the sake of helping people remember that web address, I’ve shortened it to bit.ly/compoundinterest8. Watch it now.
Matty & compound interest
Let me tell you a quick story about an IM Academy student called Matty. About 3 years ago he enrolled in the school. He deposited $500 in his account and lost it all. Then he deposited another $500 and lost it all. He decided to change his strategy big time. His strategy included compound interest. Each time he traded, the amount of money in his account would change. Each time he traded, he would invest 3% of the amount in his account.
Matty began trading using his newly acquired wisdom that included compound interest. He soon had compounded his initial $500 to around $50,000. (I hope you watched the video.)
The school contacted him and asked him if he wanted to teach for them. The rest is history.
Getting back to expert educators
Let’s talk about those expert educators again. I wanted to start watching them from the beginning.
What I soon learned is that they go so fast sometimes and use such esoteric language that I was not ready to watch. I had to study the course much more.
It was not until around a week ago that I watched some of Matty’s recordings and finally decided that I was ready to trade with him using a demo account.
I really wanted to trade as I watch Matty live. But, he’s been sick this week.
Feb.12 Just in case Matty will be sick again next week, I decided to find a new educator. I went to the schedules for all the HFX brokers. I clicked on one who will be trading live this evening. His name is Luis I went to his list of videos and clicked on favourites.
The video was from one his teaching sessions I found the it easy to watch. I like his teaching style. He said that in his teaching session last night, he had won 5 of the 6 trades.
His trading style is different from Matty’s. He uses one minute candles and one minute trades. His trades are not based on supports & resistance. They are based on trends. He will trade on weekends.
When he types hfx in the chat box for the sake of the students, that means he will take the trade. He puts lots of notes in the chat box.
Now I’m going to go and listen to another one of his sessions.