Forex Day Trading - How 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.
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.
Source...