Forex Trading Software

Posts Tagged ‘Reality’

How Singapore turned improbable into reality
Dear MM Lee, I refer to your speech at the Tanjong Pagar National Day celebrations last night as reported by Straits Times on 16 Aug 2010. You said, as you often say, that a strong government underpinned Singapore’s survival and progress over 45 years. Many third world nations like Myanmar, North Korea and Zimbabwe are helmed by [...]

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FOREX day trading is more popular than ever and online you can get a huge amount of e-books and FOREX day trading systems, which promise you regular income and huge capital gains.

Here we will look at how to separate out the myth and see the reality in relation to day trading and how to win in the markets.

Myth – Day Traders Have Profitable Real Time Track Records

Reality

FOREX day traders don’t make money and the proof is that of all the e-books and systems for sale, you never see a real track record of real profits made in the market over the longer term.

What you do get is a hypothetical track record, but these are not worth the paper their written on.

Why?

Quite simply because their devised in hindsight – knowing the closing prices.

Well, if we all knew tomorrow’s prices today we would all be millionaires!

Hypothetical track records are simply made up and have no bearing on how successful you will be trading the system.

Myth – Day traders trade their own systems

Reality

Most FOREX day trading systems are sold by failed brokers, or marketing people who have the sense not to trade the system themselves.

They don’t need to, as they make money anyway.

They can simply rely on writing some marketing copy to appeal to the greed of investors, then sell them the system.

They get their fee and the FOREX trader gets the loses – fair deal for them!

Myth – You can predict short term volatility

Reality

This is of course why day trading does not work.

Trillions of dollars are traded each day by millions of participants and to say you can predict where prices will go in a matter of hours is laughable.

The only people who take notice of support and resistance are losing day traders.

Volatility can and does, take prices anywhere in a day and levels of resistance and support are constantly broken handing day traders loses.

Myth – Day trading restricts losses and runs profits

Reality

As day traders work with meaningless data they can’t win of course but many think that day trading restricts risk, but it actually creates it.

Losses are small, as they are near daily support or resistance ( which get broken frequently as the data is meaningless) which simply ensures they get stopped out with a loss albeit a small one.

Running profits?

Forget this with day trading!

They are looking to scalp a few ticks or close positions out quickly.

The result is they can never run profits to cover the huge amount of small losses they get.

The biggest myth of currency trading is that day traders make money they don’t.

They lose and system sellers laugh all the way to the bank.

The proof of the above is:

If you ever ask a day trader for a long term track record of real profits – Try it and see if you get one.

If you want FOREX education avoid day trading and learn FOREX Trading methods that actually give you a chance of winning.

Day trading is simply one of the best ways to lose your money in online FOREX trading, so don’t fall for the myth understand the reality.

More novice traders try forex day trading than any other method and while you will hear people telling you it makes money and see gurus selling courses, the fact is you never see a real track record of profits – Why? Because – it doesn’t work.

The Illusion

Forex day trading doesn’t work in the real world – because all daily volatility is random.

The net result is that support and resistance levels (and any technical tool you try) have no chance of working, therefore you have no chance of winning.

Millions of traders, trade trillions of dollars and to say that you can tell what this huge mass all driven by different motivations, experience and emotion will do in a few hours is laughable.

The illusion day trading makes money is just that – an illusion.

Traders back test data and bend their systems to make them fit the data.

Of course, when these systems are traded the data never replicates itself EXACTLY the same way again and they lose.

This is known as “curve fitting” i.e. bending the system to fit the data.

One trader I know likened this to shooting at a barn door and then afterwards drawing a circle around everyone, to show it as a bulls-eye.

If we all knew tomorrow’s price today, we would all be rich – shame it’s not that easy in forex trading – we have to trade not knowing the prices!

Vendors feed on this naivety and greed, by making up track records based upon hypothetical simulations done knowing the closing data, put a disclaimer on and forex traders think it will work in the real world.

They don’t – ask for a real time track record and you simply won’t get one.

The vendor makes a guaranteed profit from selling the myth and the trader gets the reality of a loss.

The Reality Is..

If you can’t trade with the odds in your favour, you’re going to lose and we have already told you why.

Another reality is that forex trading involves risk.

Day traders think their restricting risk and will have small losses – sure they do but over time they get a lot of them!

Of course one of the well known phrases of trading is “cut your losses and let your profits run” this totally alien to forex day traders – what do they do when they get a profit?

They snatch it!

So they have lots of small losses and a few marginal profits (even day traders get lucky ) and the result is the demise of their account equity – PERIOD.

If you want to win at forex trading – forget forex day trading and either try forex swing trading or long term trend following, where support and resistance levels can be used to generate high odds trades.

Today, most traders are looking for an easy buck and forex trading is not easy, they buy day trading systems with the illusion of low risk, regular profits and that’s all it is an illusion.

The reality is a wipe out of equity.

Avoid forex day trading, if you want to win at FX Trading.