Having been a forex trader for 25 years it amuses me when I see writers defend day trading. They say it really can make money! - Of course they have no track record to back it up just empty words. Fact is you are guaranteed to lose in day trading for one simple reason:
All Movements in Short Time Frames Are Random
Trillions of dollars trade hands each day and million of trader’s trade, all with different objectives and opinions and to say that you can predict what they do in a few hours or a day, is ridiculous. You can’t.
Volatility takes prices anywhere in a day and support and resistance levels are meaningless, so you would have the same success rate flipping a coin.
It’s absolutely impossible to get the odds on your side – PERIOD
This is of course why you NEVER see any of the vendors selling these systems give you a real time track record – Why?
Because they don’t dare trade it!
They would rather write some enticing copy and appeal to the greed and naivety of traders and make their money selling you the system – they win you lose – period.
But I have seen a track record you may say and yes will have, but it’s NOT real.
If you check the disclaimer on it you will see there all hypothetical!
What does that mean?
It means done in hindsight knowing the closing prices!
Now who can’t do that it’s not exactly hard.
If we all knew tomorrows price today we would all be millionaires but we don’t – and neither do we know what will happen tomorrow, so there not worth the paper their written on.
Day trading is a good story but the logic doesn’t add up and the biggest lie about day trading is you can make money at it longer term.
If you could you would see a track record or the vendor would shut up and trade it himself and not need your few hundred dollars.
If you want to win
Appreciate that trading is an odds game and to trade the odds you need to trade over longer periods ,where the data is valid and you can have a chance of getting the odds on your side.
Finally
Don’t day trade, get real and trade with the odds on your side.
Wednesday, December 5, 2007
Forex Day Trading – a 100% Way to lose ALL Your Money Quickly
Through the method of Forex trading the dealers can earn quick profits and with the changes in the economic conditions the investors get attractive opportunities to invest. Although there are no fixed guidelines for the Forex trading but the specialists have their own views and observations at the same time not deviating from the main objective. In simple terms it can be said with the method of Forex trading it regularizes the doubts and queries of the investors to invest more. Every entry is exclusively administrated with some set of guidelines which is only affected by any changes in the market.
It is no different from other methods of trading, as here also there are risks and rewards. The only thing that really matters is that how much capital you put at risk to receive significant rewards. Before investing you should also make a survey of the prices prevalent in the market, various market behaviors.
Experts are of the opinion that Forex trading is a combination of both science and art. It is an art because it includes a defined practice, set guidelines and theories. Having appropriate knowledge and with the assistance of the technology is very important for every individual life, as you have to take important decisions in your life.
Mechanical trading methods are a part of Forex trading and which assists you in making significant judgment. With the input of any data the system makes provides you with the suitable solution for it.
With the advancement of the technology the advanced computer editions of these mechanical methods are known as ‘black box’ processes. They are very smart that is the reason these are known as mechanical methods. With this just switch on your computer and it will revise all the trading suggestions and will straightaway make an order to the dealers.
Even a nanosecond matters a lot in the trading of five minute charts, so no doubt conducting fast operations is a must in the Forex trading. The base of the Forex trading relies on moving averages. The major and the most superior systems employ the mixture of the cost and the volume. Stochastic is put into use by the most efficient systems these are mathematical methods for non-linear science.
Forex trading systems are reactive in nature as under the changes in the market the system presumes that it will stay like this only. It takes these decisions through the systems that are planned in the system. There are Black Boxes that calculate a major collection of markers in accordance to increase the confidence of the action proposal.
In the stock market the dealers those who purchase and sell breakouts they are known as momentum players. Does that system will be successful or not or will produce a loss, the formulas of the investors think that this will be continue.
It is no different from other methods of trading, as here also there are risks and rewards. The only thing that really matters is that how much capital you put at risk to receive significant rewards. Before investing you should also make a survey of the prices prevalent in the market, various market behaviors.
Experts are of the opinion that Forex trading is a combination of both science and art. It is an art because it includes a defined practice, set guidelines and theories. Having appropriate knowledge and with the assistance of the technology is very important for every individual life, as you have to take important decisions in your life.
Mechanical trading methods are a part of Forex trading and which assists you in making significant judgment. With the input of any data the system makes provides you with the suitable solution for it.
With the advancement of the technology the advanced computer editions of these mechanical methods are known as ‘black box’ processes. They are very smart that is the reason these are known as mechanical methods. With this just switch on your computer and it will revise all the trading suggestions and will straightaway make an order to the dealers.
Even a nanosecond matters a lot in the trading of five minute charts, so no doubt conducting fast operations is a must in the Forex trading. The base of the Forex trading relies on moving averages. The major and the most superior systems employ the mixture of the cost and the volume. Stochastic is put into use by the most efficient systems these are mathematical methods for non-linear science.
Forex trading systems are reactive in nature as under the changes in the market the system presumes that it will stay like this only. It takes these decisions through the systems that are planned in the system. There are Black Boxes that calculate a major collection of markers in accordance to increase the confidence of the action proposal.
In the stock market the dealers those who purchase and sell breakouts they are known as momentum players. Does that system will be successful or not or will produce a loss, the formulas of the investors think that this will be continue.
Forex Education – The 4 Major Mistakes That Cause 90% of Traders to Lose
If you want to trade Forex and win the odds are against you – 95% of traders lose and only 5% succeed. If you want to win at forex trading (and the rewards are huge) then don’t make these 4 trading mistakes.
If you make any of these mistakes you will never achieve long term profitability in forex trading.
1. Predicting Market Movement
This is the one major error almost all new forex traders make and it’s a critical one.
If you try and predict then you are simply hoping or guessing and the market will destroy your equity.
Hoping or guessing is not a way to make money in any business – forex trading included!
For example, traders spot a support level and think it will hold so they buy – what they should do is:
Wait for proof that the level will hold by looking for a change in price momentum that shows prices are moving back up – this is the proof.
Check out and start using momentum indicators in your trading.
2. Using Logic That Does Not Work
Trader’s very often use methods or systems which can never work.
Here are some examples:
Day trading
Is popular but you will NEVER win.
All short term volatility is random - therefore you can’t get the odds in your favour and lose.
The Appliance of Science
Many traders think markets move with scientific accuracy and use cycles or Fibonacci numbers – they don’t work and never will, yet traders still use them.
Obviously they can’t work:
If markets moved to a scientific formula, we could all work out the price in advance and there would be no market.
Two Many Inputs
Many traders try to be too clever and have systems with huge amounts of indicators.
After all, 12 indicators must be better than 2 or 3 – Wrong!
Too many indicators, simply means the system simply breaks in real time trading and are not as robust as simple systems.
The above are just a few examples and there are many more – look them up in our other articles.
3. Poor Money Management
Most novice traders are paranoid about losing - they place stops so close their guaranteed to get stopped out.
On the other hand, when they have a profit they get so excited, they bank it early by moving their stop too quickly!
If you want to make money you have to take meaningful risks to make big rewards.
To do this you must keep your stops outside of normal volatility - if you want to hang onto the big trends, that make the big profits.
4. Lack of Confidence and Discipline
The reason most traders lack this is because they try and buy success.
They think someone can give them success for a few hundred dollars and buy an e-book or system from a vendor.
When the system starts to lose, they have no confidence in it and throw in the towel.
An important vital part of your forex education is:
Only you can give yourself success.
Most systems sold on the net are junk if they were that good the vendor would trade them himself and not bother you for small amounts of money!
You need to build your own system and know how and why it makes profits, have confidence in it and this will give you the discipline to follow it through inevitable losses in the short term and hold on for long term profitability.
If you make any of these mistakes you will never achieve long term profitability in forex trading.
1. Predicting Market Movement
This is the one major error almost all new forex traders make and it’s a critical one.
If you try and predict then you are simply hoping or guessing and the market will destroy your equity.
Hoping or guessing is not a way to make money in any business – forex trading included!
For example, traders spot a support level and think it will hold so they buy – what they should do is:
Wait for proof that the level will hold by looking for a change in price momentum that shows prices are moving back up – this is the proof.
Check out and start using momentum indicators in your trading.
2. Using Logic That Does Not Work
Trader’s very often use methods or systems which can never work.
Here are some examples:
Day trading
Is popular but you will NEVER win.
All short term volatility is random - therefore you can’t get the odds in your favour and lose.
The Appliance of Science
Many traders think markets move with scientific accuracy and use cycles or Fibonacci numbers – they don’t work and never will, yet traders still use them.
Obviously they can’t work:
If markets moved to a scientific formula, we could all work out the price in advance and there would be no market.
Two Many Inputs
Many traders try to be too clever and have systems with huge amounts of indicators.
After all, 12 indicators must be better than 2 or 3 – Wrong!
Too many indicators, simply means the system simply breaks in real time trading and are not as robust as simple systems.
The above are just a few examples and there are many more – look them up in our other articles.
3. Poor Money Management
Most novice traders are paranoid about losing - they place stops so close their guaranteed to get stopped out.
On the other hand, when they have a profit they get so excited, they bank it early by moving their stop too quickly!
If you want to make money you have to take meaningful risks to make big rewards.
To do this you must keep your stops outside of normal volatility - if you want to hang onto the big trends, that make the big profits.
4. Lack of Confidence and Discipline
The reason most traders lack this is because they try and buy success.
They think someone can give them success for a few hundred dollars and buy an e-book or system from a vendor.
When the system starts to lose, they have no confidence in it and throw in the towel.
An important vital part of your forex education is:
Only you can give yourself success.
Most systems sold on the net are junk if they were that good the vendor would trade them himself and not bother you for small amounts of money!
You need to build your own system and know how and why it makes profits, have confidence in it and this will give you the discipline to follow it through inevitable losses in the short term and hold on for long term profitability.
Forex Tips – 5 Simple Ones to Increase Your Profits
The forex tips below are all easy to do and all will help you achieve one aim increasing your overall profitability. So here are 5 forex tips for greater profits.
1. Use the Weekly Chart
I am amazed that most traders never bother looking at weekly charts but if you want to separate out “the wood from the trees” the weekly chart gives you a much clearer perspective.
The big trends are clearly visible on the weekly chart and if you are long term trend follower, start with this chart first and you will have a clearer view of support and resistance levels and entry points.
2. Cut Your Trading Frequency
This Forex tip addresses a major problem that most novice traders have – they trade too much.
They think they have to be in the market all the time and chase profits but the fact is, if you cut your trading frequency, you stand a better chance of success. Keep in mind; you only get paid for being right in forex trading - NOT for your effort and how often you trade!
By cutting your trading back, you can concentrate only on the high reward, high odds trades which give the best potential profits.I know traders who only trade a few times a year yet - they make between 120 – 430%! Annually.
Their simply trading the cream of the trades and ignoring the low odds, high risk ones and there are plenty of those.
If you cut your trading, you will probably see your profits soar.
3. Risk More Per Trade
This is directly related to the above point.
If you have a high odds trade take this tip and risk more.
You will read a lot of nonsense on the net about risking 2% per trade and no more.
Well, that’s fine if you are trading 100k but if you’re a small potato trader, trading 10k or less, that’s a maximum of $200!
If you have a small account you need to load up and risk 10 -20% on the high odds trades. Keep in mind if you don’t risk much you won’t make much!
To make meaningful gains you have to take risks – if you don’t like taking risks don’t trade forex.
4. Don’t Diversify
If you are trading a small account don’t diversify!
You need to load up as we have said above and concentrate on one trade only.
Diversification is simply another word for diluting profit potential and is something a small trader should not engage in.
5. Use an Account Profit Target
What s a realistic target to make per annum in forex trading?
You may have your own ideas - but if you made 100% that puts you up there with the best fund managers in the world.
You will often see people look at risk per trade but looking at your account overall and using a profit target is highly effective.
You will often see trades that give you big profits in short periods of time and if they are a substantial – i.e. more than 25% of your 100% bank them.
Have a break and start again.
If you hit your profit target for the year early - decide whether you should trade again at all or at the very least give yourself a deserved break.
The tips above are really saying:
Focus only on the best trades with the best odds, load them up and have a target -if you do the above, chances are you will make bigger profits.
1. Use the Weekly Chart
I am amazed that most traders never bother looking at weekly charts but if you want to separate out “the wood from the trees” the weekly chart gives you a much clearer perspective.
The big trends are clearly visible on the weekly chart and if you are long term trend follower, start with this chart first and you will have a clearer view of support and resistance levels and entry points.
2. Cut Your Trading Frequency
This Forex tip addresses a major problem that most novice traders have – they trade too much.
They think they have to be in the market all the time and chase profits but the fact is, if you cut your trading frequency, you stand a better chance of success. Keep in mind; you only get paid for being right in forex trading - NOT for your effort and how often you trade!
By cutting your trading back, you can concentrate only on the high reward, high odds trades which give the best potential profits.I know traders who only trade a few times a year yet - they make between 120 – 430%! Annually.
Their simply trading the cream of the trades and ignoring the low odds, high risk ones and there are plenty of those.
If you cut your trading, you will probably see your profits soar.
3. Risk More Per Trade
This is directly related to the above point.
If you have a high odds trade take this tip and risk more.
You will read a lot of nonsense on the net about risking 2% per trade and no more.
Well, that’s fine if you are trading 100k but if you’re a small potato trader, trading 10k or less, that’s a maximum of $200!
If you have a small account you need to load up and risk 10 -20% on the high odds trades. Keep in mind if you don’t risk much you won’t make much!
To make meaningful gains you have to take risks – if you don’t like taking risks don’t trade forex.
4. Don’t Diversify
If you are trading a small account don’t diversify!
You need to load up as we have said above and concentrate on one trade only.
Diversification is simply another word for diluting profit potential and is something a small trader should not engage in.
5. Use an Account Profit Target
What s a realistic target to make per annum in forex trading?
You may have your own ideas - but if you made 100% that puts you up there with the best fund managers in the world.
You will often see people look at risk per trade but looking at your account overall and using a profit target is highly effective.
You will often see trades that give you big profits in short periods of time and if they are a substantial – i.e. more than 25% of your 100% bank them.
Have a break and start again.
If you hit your profit target for the year early - decide whether you should trade again at all or at the very least give yourself a deserved break.
The tips above are really saying:
Focus only on the best trades with the best odds, load them up and have a target -if you do the above, chances are you will make bigger profits.
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