DALL-E 3 | bing.com
I recently started trading in the futures market for the first time in my trading career. I also started trading on a shorter time-frame. My execution time-frame dropped from the daily chart down to the hourly chart.
This learning curve was more challenging than I initially thought. I decided to trade currency futures using the Dollar Rand pairing. I do my technical analysis of the pair using the spot price, but the trouble is that the spot price and the futures price are not the same. The futures price is typically higher than the spot price as it factors in interest charges to expiry. This made it difficult to place and adjust my stop losses.
Coming from trading equities to trading forex, I underestimated how wide a R1 gap actually is. Especially as one zooms into the shorter time-frame.
It took some time to readjust and adapt to these changes in my trading. I’m still learning and I’m continuing to readjust and change my trading process to fit this new market environment.
This process reminded me of the importance of adapting to change and being willing to take on and accept new challenges. More importantly, it also highlighted the importance of (willingly) becoming a lifelong learner.
In navigating these changes I remained true to my trading principles and trading rules. This is mainly to ensure that stops are always in and positions are sized properly – and to remain patient for the right setup.
To me, this also emphasized the importance of having a strong base of principles as a trader – and using these principles to learn and adapt to new environments.
Traders share a peculiar characteristic: they’re fiercely competitive, but only with themselves. In practice this means that they see every outcome as an opportunity to learn, and they’re brutally honest about both their failures and successes. This also means that they’re hungry for knowledge. They don’t sleep easy with unanswered questions. And they’re seldom satisfied with just one answer.
Njabulo Nsibande is a founder of Village Trader, and Sakha Ingcebo investment club. His interest in trading began in 2016, alongside a rash of Instagram ‘fx traders’…
Find him on Twitter: @njabulo_goje.
