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 donâ??t receive one.
Fact is day trading systems will lose you money as by their very nature they canâ??t work hereâ??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 + ) donâ??t accept a hypothetical track record!
Letâ??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, there worthless, so ask for the real time record and you wonâ??t get one hereâ??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 thatâ??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 wouldnâ??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 donâ??t fall for the hype of day trading systems.
If you do get ready to lose your equity and lose it quickly.
Sacha Tarkovsky
http://www.articlesbase.com/investing-articles/day-trading-systems-why-you-will-never-win-day-trading-108791.html
#1 by suferdude67 on May 8th, 2009
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Dont understand Currency Trading?
I understand stocks and i want to learn currency trading. i read a lot articles. i used the forex demo trading system. For some reason i do very well. I started out with 50k and in 20 days had 100k. and i have never had a negative trade. Every trade i did had positive return out of it. I dont know if im ready. i made over 1200 pip gain over 20 days and i only did this part-time. Like 2 hours a day. Somebody told me (trading is an art) i guess my purpose in life is to trading currency but i dont understand. Im a hvac tech. Do you think i should start to use real money?
#2 by Alvie on May 8th, 2009
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No, I suggest that you keep trading in your Demo account until you loose a few times substantial amounts of your play money.
You need to experience the real risks of trading as well as the benefits. Or else you'll end up being overconfident, take excessive risks, and loose a lot of money when you start trading with real money.
References :
#3 by Rabbit on May 8th, 2009
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Please don't.
Long ago, there was a book someone loaned me, The Richest Man in Babylon. The concept was to save money (10% was their figure) and invest it. Well, the student character in the story passed his lessons on to someone else and together they pooled their cash and bought some pearls or gems (I forget which). It turns out that they were worthless. The advice then given was "stick to what you know".
Your purpose in life is not trading currency and playing a simulator is not the same. Unlike stocks, where you really don't lose more than you put in, futures can be extremely vicious. It can bite you. If the price suddenly goes against you, limit up (or down) for several days in a row, you could get a margin call for you to put up still more money. You could actually owe far more than you may have been prepared to put in. This is something that happened to me several years ago. My broker teased me with that old line, "There are bold traders, there are old traders, but there are no old, bold traders."
References :
#4 by Suzane P on May 8th, 2009
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Forex traders are placed through a broker or a market maker either directly or through an online platform. Trades are based upon currency pairs, with a trader generating profit or gains when the currencies move in a positive direction. One of the attractions for traders seeking to learn how to trade Forex is that traders can be placed in small dollar amounts. And, many trading firms offer the ability to trade on margin, giving the typically trader even more leverage to create personal wealth.
How to Trade Forex- The Next Steps
Once you are ready to trade Forex, you need to take the next steps:
1. Choose a Forex Broker- With so many Forex brokers available to select from, it is important to review the features and benefits that each firm offers to its traders. Select a firm that you feel offers you the most advantages alongside affordable trading schedules.
2. Set up a Demo Account- A demo account allows traders to practice trades while learning how to use the systems while not risking their own personal capital.
3. Learn how to Read Charts- Take time to learn how to read currency charts as well as the information provided by your chosen broker. If you have questions as you learn how to trader Forex, ask your broker.
4. Execute your First Trade- Once you have mastered the basics by practicing within your demo account, you are ready to execute your first trade.
Learning a new market is not as challenging or as intimidating as it may initially appear to be. Take the time to learn the basics and to work through the steps to that you can properly learn how to trade Forex.
References :
Broker I recommend: http://www.finexo.com/
My Blogs: http://forextradingguru.blogspot.com/
http://forexmoneymaker.blog.com/