Day Trading Talk

Kelly Price asked:


Before you attempt to day trade or buy a day trading system, there are 3 facts that you need to know, as they are critical for your day trading success so let’s look at them.

1. The Logic Of Day Trading Is Flawed

The logic of day trading is flawed and doesn’t work.

Sure you see lots of people claim to make money at forex day trading but they don’t and you will never find a real time track record of gains – we will come back to this point in a moment, for now lets look at why day trading cannot work.

The answer is simple:

FACT:

All short term volatility is random and prices can and do go anywhere in a day, so if this is true – it’s impossible to win.

Of course its common sense, there is no order to the markets in a just a few hours.

Think about it:

Millions of traders trade trillions of dollars and to say that you tell what this mass of people is going to do in a few hours is laughable.

You can never win longer term day trading so let’s look at all those wonderful track records, that tell you to give up the day job and trade for a living..

2. Where is The Track Record?

You will see people present track records in day trading and they all have hypothetical or simulated written on them – which means yep you guessed it there done in hindsight knowing the closing prices – How hard is that?

A child could do it and these track records are not worth the paper their written on.

You never see a real one!

The vendor knows it doesn’t work so he is not going to risk his money trading – he can sell the system to you, make a guaranteed profit and you take the loss in the market. The above is what happens as these vendors trick traders with simulated track records and clever marketing copy.

Scams on the net

The internet has bought lots of great information to forex traders – but also a lot of scams and cons and the biggest con of all is anyone who tells you day trading works – it doesn’t.

Try and find a track record if you dont believe me – you wont find a real one if you do tell me about it, I have been searching for 20 years.

Finally…

If you want to make money forex trading, you need to trade in time frames that mean you can get the odds on your side and this means trading longer term – leave day trading to investors who are naive, lazy or just dreamers. If you want to win – get the odds on your side and do your homework and avoid forex myths such as day trading.



Gregory

Sacha Tarkovsky asked:


Day trading systems are everywhere, but it is impossible to make money from them – for 2 main reasons which are outlined below.

If you think you can make money day trading, you need to think again and read the facts below.

If you are thinking of buying a day trading system ask any vendor to show you a real track record of profits and you won’t get one.

The reason?

Day trading by its very nature is flawed and does not produce consistent profits over the longer term.

1. How Currencies trend

On a short term daily basis trying to guess the action in a day is similar to flipping a coin. – All short term daily movements are random.

Currency markets reflect the health of the economy overall and trend longer term.

If you look at long term trend following you have reliable data to work with over a period of time but this is not so in day trading.

If you are a technical trader (and most day trading systems are) if you don’t have enough reliable data you cannot attempt to put the odds in your favour.

2. Day trading breaks the fundamental rule of trading:

You have heard it many times: “cut your losses and run your profits” You need to have far bigger profits than losses to make profits longer term.

Sure you can cut your losses but you can’t run your profits.

Generally most readers have more losing trades than winners and if you cut a winning trade in a day session how can you ever make money? – You can’t.

You will simply lose your equity quickly day trading.

So why do traders do it?

Because they believe vendors who make claims and produce hypothetical track records.

Check with these vendors and ask for a track record you won’t get one.

They make money selling you the system and then making more money on kickbacks from brokers (remember transaction costs are higher) on day trading systems.

So broker and vendor win you lose your money that’s the real story of most day traders.

If you want to make money trade longer term and also never buy a system from a vendor unless you get a real-time track record, over at least 3 years – however you will wait a long time for one of those on a day trading system



Carol

Sacha Tarkovsky asked:


Not a day goes by without me seeing yet another day trading system with claims that it can make me huge gains. I normally for fun ask for the real track record and of course don’t receive one.

Fact is day trading systems will lose you money as by their very nature they can’t work here’s why.

Firstly

If you are ever considering buying a day trading system ask for the real time track record over the long term ( this means 2 years + ) don’t accept a hypothetical track record!

Let’s see we know the prices in hindsight can we make a profit?

Of course we can!

Anyone can win with a hypothetical track record, they’re worthless, so ask for the real time record and you won’t get one here’s why.

1. Short term moves are random

The currency markets trade trillions of dollars per day and short term moves within any daily period are random.

You could flip a coin or use a day trading system your odds of winning are the same.

2. Volatility

Is random in short time frames and prices can simply go anywhere.

As most day trading systems bang on about keeping losses small, stops are normally taken out creating a loss.

Furthermore, your chances of losing are greater as the odds of being taken out are high.

3. Day trading systems never run profits

A day trading system keep your losses small (albeit you have massive odds of being stopped out) but they never seem to do the other essential of making money in FOREX and that’s run profits.

Day trading systems normally have short term profit targets and are grateful for any profit they can get.

So what do you have?

Lots of small losses and no real profits to make up for them.

This means you get wiped out and normally wiped out quickly.

The Myth and The Reality

The myth is that day trading systems make money, the reality is day trading is one of the best ways to not only lose your equity, but lose it quickly.

People day trade because they are greedy or simply fools.

When I read a lot of the sales blurb of day trading systems its obvious these vendors have never traded, they make their money selling courses.

They make money from book sales not from trading, so they win you lose.

Saw one promising me 90% successful trades for a few hundred dollars.

Well if I had one of those, would be making millions and certainly wouldn’t sell it I would be to busy enjoying my riches.

Finally

If you want to trade currency markets you can make money, but be realistic and sensible and make sure that you don’t fall for the hype of day trading systems.

If you do get ready to lose your equity and lose it quickly.



Barry

Jason Fielder asked:


You’re staying at the beach house working in your office, calm and collected as you collect the profit from yet another successful day trade is debited to your account.

Your kids rush in and you take a break and head outside to play in the sand since you just made another small and easy fortune while those suckers at the office are working harder for less. It’s a nice picture isn’t it?

If this imaginary scenario sounds familiar, it’s because there are probably half a dozen commercials on the television at all times of the day showing scenes like this to encourage people to get into day trading the Forex market, usually through signing up with a certain company or buying an expensive tutorial that is supposed to make beating the Forex market as easy as getting out of bed in the morning and turning on the computer.

So in danger of making myself unpopular, here’s the stark truth of the matter: most traders should not try day trading. Day trading the Forex might be trendy, but it’s not nearly as easy or profitable as these advertisements would like you to believe.

Day trading is an advanced form of currency trading, and often involves many shorter term trades. In fact, many Forex traders argue that turning a profit on day trading is one of the most difficult things to do in the Forex market.

There are literally hundreds of stories out there of smart, educated, sophisticated traders who went to day trading and proceeded to lose a fortune.

In my opinion, most traders would be better served learning to trade on the longer term trends that the Forex market has to offer. Not only does this allow you more data and time to analyze the developing trends in the market, but there is a lot more money to be made by being on the right side of a huge market breakthrough than by being right on even dozens of day trades.

If you’re good enough to make money day trading, why wouldn’t you learn to trade the parts of the Forex that offer bigger profits and less risk (although let me note, there is always major risk in trading Forex)?

While some traders will undoubtedly want to day trade, for most traders the real chance at making a living at the Forex revolves around the long term trades.

Learn to trade long term. That’s where the money is, and that can help you to avoid many of the scams and heartbreak that’s out there.



Larry

Sacha Tarkovsky asked:


Day trading is popular and you will find more vendors selling day trading systems than any other method.

People buy them yet they don’t work and guarantee you will lose longer term. Why?

Let’s find out.

Successful trading is all about trading the odds and you must have data that’s reliable that enables you to do this.

In day trading you simply don’t have any reliable data to work with and therefore cannot get the odds in your favor and may as well flip a coin.

Trillions of dollars are traded daily by countless millions of traders and daily volatility is random.

Therefore, using support and resistance areas in a day session is useless.

The only people who take any notice of daily support and resistance levels are day traders and their small losing minority.

The net result is:

Day traders place stops behind meaningless levels and are then surprised when they get stopped out.

Of course, even if their lucky enough to get a profit in day trading, they break one of the fundamental rules of investing:

Run your profits

Day traders are normally glad to scalp a few points or want to close out at the end of the day.

They therefore have huge amount of losing trades and their winners are tiny ensuring that their account equity is wiped out quickly.

Still not convinced?

Then try this simple test:

Ask any day trader for a real time track record of profits over the longer term and you simply won’t get one.

Of course, they can produce hypothetical track records (but their done knowing the closing prices!) so they are no use at all.

People selling day trading systems make their money selling a good story and collecting money from greedy or in experienced traders, so they are guaranteed to make money while the trader loses.

Day trading sounds great in theory but although it looks low risk it is not.

You are working with data that is simply unreliable and all day traders eventually end up losing their money.

If you want to make money in online forex trading then avoid day trading.



Nancy