Forex Trading Software

Posts Tagged ‘Quickly’

There is no better way to wipe out your equity quickly than FOREX day trading.

I read all the time about how great FOREX day trading is, but never seen anyone able to give me a real time long term track record.

The reason of course is:

FOREX day trading is based upon logic that is simply ridiculous and dooms it to failure.

So why do day traders lose?

Consider this:

Day traders think they can predict movements in short time frames, but all short term moves are random and volatility can (and does) take prices anywhere.

If all the moves in a day are random you have no chance of making money as support and resistance points are meaningless.

Trillions of dollars are traded daily by millions of participants and to try and predict where prices will go in short time frames is laughable.

Support and resistance levels are NOT valid

Day traders try and work off support and resistance levels and continually get stopped out as volatility can and does take prices anywhere.

So you have a high probability of being stopped out and day trader’s pile up a huge number of small losses.

Occasionally they get a winning trade (more by luck than judgement) but of course they snatch any profit they can get as running profits is totally alien to day traders.

The result is a wipe out of equity and it normally happens quickly.

What about all the day trading systems promising gains?

Most of these are sold by people who have never traded and rely on enticing copy to sell their systems, or failed brokers looking to appeal to the greed and ignorance of buyers.

These day trading systems NEVER come with real time track records they come with hypothetical track records.

If you don’t know a hypothetical track record is one those us done in hindsight knowing the closing prices!

Well that’s hard; my seven year old daughter could do that.

The fact is day trading is simply a great way to lose money quickly and it is surprising how many traders fall into the trap of trying to win at it

Don’t make the same mistake, unless you want to lose your account equity quickly.

I read a lot of material from e-book sellers and others about forex day trading and how easy it is, but these guys have probably never traded in their lives.

The fact is if you want to make money don’t day trade, you will lose your equity. Here we will look at why.

The Odds & Data

The longer and more data you have, the easier it is to calculate the odds.

Currencies represent the overall health of the economy and it’s a fact that the longer term trends last for months or years – These are the trends that make money.

Day trading is doomed to failure, as you have no reliable data to work with as the time span is to short.

If you have no data to work with then how can you day trade?

You may as well toss a coin.

Day trading sounds appealing, scalping the market, getting in and out quickly – but you won’t win.

CONSIDER THIS FACT TOO:

Let’s assume you don’t believe me and you think the data is reliable enough.

Well, how about this to consider:

To make money trading “Run Your Profits and cut your losses”

All professional traders know this is the way to make money.

You need to make sure that your profits are big enough to cover your inevitable losses.

In day trading you can cut your losses but running your profit is a contradiction in terms!

You can’t, because even if you have a winning trade you close it too soon.

This would seem common sense, but day traders don’t believe it but they should, it’s a fundamental rule of investing.

I know long term traders who win maybe 20% of the time and make huge profits.

Why?

Quite simply, their profits are far bigger than their losses, on the other hand, I have seen day traders win 50% of the time and get wiped out.

If you want a thrill then forex day trading is exciting but you will lose your money.

If you don’t mind losing money, go ahead but if it were me, I would play roulette it’s just as exciting and more fun.

Fact is those e-books and brokers peddling day trading systems normally have never traded and rely on persuasive copy and greed to sell their systems.

Normally they have their eye on the commission they can make.

Forex day trading is great for that but that won’t help you make money.

If you still don’t believe me then when you get a broker or e-bookseller who wants you to day trade ask them for the following:

A real time audited track record (minimum 3 years) net of all fees showing a profit.

Try it and see if you get one for a forex day trading system.

FOREX day trading is big business and there are plenty of FOREX day trading systems tip sheets and guru’s who will promise you they can make you rich.

The problem is odds are you won’t make money and ask anyone selling to you to show you a real time track record chances is are you won’t get one!

FOREX day trading sounds good in theory but doesn’t work in practice. Here’s why.

Currency movements tend to reflect the underlying economic climate and interest rate outlook of the countries currency and they trade long term. Short term movements within a day are random and are the same as flipping a coin.

Even if you think you can day trade FOREX, consider one of the fundamental laws of trading:

Run your profits and cut your loses

Well in day trading, a short trading session is all you have to make money in before you close your position.

You will never be able to run your profits long enough and make enough money to cover your inevitable losses.

When you add transaction costs to losses and subtract them from profits, FOREX day trading will soon empty your account of money and leave you with losses.

It would seem fairly obvious that FOREX day trading on the whole stacks the odds against you, but investors still buy day trading courses and systems through greed and ignorance.

So why is day trading so popular?

Simply people think it restricts risk, but on the flip side it restricts profit as well – and you need to take risk to make a profit – there is no free lunch.

If you can’t run profits enough to cover your losses you will lose pre and simple.

Day traders think they are restricting risk but really they are creating it and stacking the odds firmly against them.

Many people who sell the concept of FOREX day trading are also linked to brokers, who pay commission to them on each transation and there is no better commission earner than someone trading every day.

Fact is, if you want to make money in FOREX Don’t day trade – Do what the pro’s do, catch the bigger profits from the longer term moves.

Have a day trading system on my computer, says its 91% accurate and will cost me just $99.00!

Wonder if I should buy it?

On second thoughts, Let’s give it the benefit of the doubt and ask for the real time track record.

Wonder if I will get one?