About four years ago…

I decided it was time to start trading with real money. My paper demo account was overall at a small profit, but that was because I had a few terrible trades early in that slowed me down (or so I thought).

Regardless, I was trading the foreign currency market using a day trading/scalping method. My plan was to trade with the trend and capture small movements throughout the course of the evening/morning. I was trading the British pound (GBP/USD) and the Euro (EUR/USD).

After the first few successful paper trades I immediately funded my broker. However, I did force myself to wait two more weeks until I could prove the method to myself. During those two weeks every trade I took brought me closer to success. I remember sitting there already imagining myself walk out the door of my day job, driving my new BMW, building a new house, that look of pure peace/pride on my wife’s face knowing I could take care of her, the complete and utter freedom, no more boss, no one telling me what to do or when to do it, and most of all no more worrying about money!

So here I am, I have traded for four weeks and I’m a pro… It’s time to start making real money – forget this paper stuff! I had already funded my account with $10,000. I would be lying to say this was money I could afford to lose, but it was money I was willing to risk for what I thought was my one shot at greatness.

After watching the charts for a while, the signals set up perfectly. I decided to take the trade however instead of one lot; I decided to use 2 lots! After all, I was in it to make BIG money FAST. My heart’s pumping, I’m more nervous/excited/anxious than I have ever been in my life. I did the only thing I could do…hit the buy button.

Every pip was $20 and since the spread was 3 pips I was already down $60. A few seconds later it came to break even, then back down to -$100, and then it kept shooting up. It hit $700, and then started to go back down. At $560 I felt like my heart was going to explode out of my chest and I did not want to let the market take my profit so I closed the trade. I could not believe it $560 on my first trade! My account was up 5.6% on one trade.

Here I am thinking to myself, “I really can do this”! 20 minutes later after emailing my close friends the victory report, I calmed down and decided I needed to watch for the next move. About an hour later I had my setup again. I bought the GBP/USD again. I decide to use 3 full lots this time. Maybe it could break $1,000 profit this time. I clicked the buy button again…

Instantly my account is at -$90, okay that’s the spread. 5 Seconds later it was at -$270, then 10 seconds later - $540 (I could not believe my eyes), and finally -$810….. I closed the trade. It only took 45 seconds to lose $810. I felt like I was going to hurl and literally curled up on the couch, and shut my laptop. My dreams disappeared. All I saw was failure in my future.

This was my first trading experience I went from an ultimate high to what I felt like was rock bottom. I have since learned that my first trading experience was not uncommon for new Forex traders. I learned that your emotions can make you act incredibly irrational during trades, and that they can keep you from developing a proper trading system as well.

Over the next several weeks I’ll be covering different aspects of trading psychology. I’ll be showing you the silent killer of many a traders and how you can learn from their mistakes to improve your trading performance.

Please post your personal experiences below. I want to know how your first real money trading experience worked out. Did you start off making money immediately? Did you have a major loss? How did you feel? How do you think you emotions played a role in your early trading?