Why Do You Trade? | Forex Factory

Why Do You Trade? | Forex Factory

Why Do You Trade?

From fxtechstrategy.com

Why Do You Trade? I believe that a prime ingredient for success in any endeavor is the right motivation. One question I like to ask new students early on in class is why they want to trade. This question is very important because so many people fail in this business partly because they lack the drive to persist through the inevitable tough times that are derived from trading. The obvious answer to this question of why someone would want to trade is to make a lot of money. My experience with traders that focus all their attention on money, however, is that their drive to make money causes them to be lax in their risk ... (full story)

Comments / Top
Subscribe
Expand Replies
Collapse Replies

Jun 3, 2012 7:13am

Quoting ryknowtrade

Disliked

The simply goal of making money is finding the most *objective* trade that is available and rolling your stash all on the line. Yes, putting it all on the line. Risk management is still involved however the odds are in your favor.

For ego purposes, people try and *beat* the markets. They feel that X asset is going to go up or down and make their bets in that direction. Sometimes it works, but for many (risk management or not) it does not and/or is not profitable in the long run.

We always look away from what the simplest trade is.

Ignored

I couldn't disagree with someone more. You talk about 'objectivity' but everything you discuss, including EUR/CHF is SUBJECTIVE.

Loading all you eggs into one basket is NOT the OBJECTIVE method to trading but more of a GAMBLE, one that most traders would find draining on their account.

I'm a technical trader and I can tell you that I've made loads of pips this past month shorting the EUR/JPY and EUR/USD. Why? Because the charts are in daily downtrends and anyone who didn't make money on these pairs in the past 30 days is not objective at all.

Jun 3, 2012 4:51pm

Quoting ryknowtrade

Disliked

I am sorry you disagree. Truth is, this market is a gamble. Coming from someone who consistently plays poker and walks away 3 to 4x more than I walked in with, I can tell you that trading (fx, stocks, etc) has very little skill involved. We like to think it does. We like to tell ourselves it is a hard business, but relative to other professions where money is made from money, it isn't.

I am glad you followed the trend on EUR and made some money, but in the long run, most traders burn up. Of course, like your "trend" trading technique, there...

Ignored

So as someone who plays a lot of blackjack I know what you're talking about - the house has the edge - but not ALWAYS. There are times when I have that slight edge and I bet 10x more than base. Do I lose more times than I win? ABSOLUTELY.

But when I win I win more than when I lose

As a poker player do you go all in with 2 pair? Do you always raise when you have big slick? If you do then YOU need the luck.

What I disagreed with your comments is your explaination. You were giving SUBJECTIVE examples and saying the key is to be OBJECTIVE.

BTW - Forex is a lot like poker. You have to have patience, you have to stay in the game and you need to know when to close a position/walk away

Jun 3, 2012 4:52pm

Quoting ryknowtrade

Disliked

BTW, the winners in markets are no different than the winners in Vegas. The casino always wins when playing house games. To think you are smarter or more risk tolerant than them is simple ignorance.

Ignored

In the long run yes but I know many, many card counters who make a good living.

Jun 3, 2012 6:35pm

Quoting ledobedo

Disliked

...and go long eurchf, EVERYONE so we can all make money

Ignored

I been long EurChf for 3 months now, waiting for SNB to decide they prefer 1.25 more than 1.20. I have this feeling that this could be a long wait....

Jun 3, 2012 7:51pm

Quoting ryknowtrade

Disliked

Forex is nothing like poker. I won't even begin to waste the time explaining. For poker players around, the game is so much richer and diverse than trading.

Second - I never said that eur chf trade was not subjective but rather the most objective trade out there right now and that's the goal is to find that.

Finally poker and 21 are not even remotely the same game. Poker (NL hold em is this case) is not a mathematical game like 21. It is a game of reads. The market is not like that one bit minus being in the pits in chi town.

Ignored

Wow you and I really are on different pages. You state the the EUR/CHF trade is objective because of statement made by SNB? Do you fold in hold 'em because the person across from you says he has 4 Aces?

That's where the talent comes in Forex trading - wading thru all the 'comments' and disecting what the real intentions are; assuming that you use fundaments for trading. As a technical trader I use charts and indicators tell me where to enter and exit.

As far as poker being only about 'reading' an opponent well I'll take your word for that but I will disagree that the Forex market is a gamble but rather it is a calculated risk

Jun 4, 2012 6:20am

Quoting Manipulator

Disliked

Trading is a skill and a skill unfortunately only intellectually accessible to very few - that is why only those with a real angle make it, hence the 1/20. I know because I have seen the two sides of play. It is however a gamble for the rest - no different than throwing dice.

Ignored

If you directed this comment at me, I will just say that I believe the Swiss economy is/was suffering due to rampant buying of CHF, and I therefore believe that SNB will hold their peg.

At the moment the Euro is in persistent decline so I expect the Swiss are quite happy to float down with the Euro. The result may be that the 1.20 peg is not revised up - and that could be the weakness in any plan waiting for some change. The other facet to watch is that as the Euro sinks the Swiss may re-base their CHF-peg on a currency index, in other words a stoploss is necessary on a long trade.

Jun 3, 2012 11:21pm

Quoting clockwork71

Disliked

I trade to feed my crack addiction, but I suppose we all come from different backgrounds.....

Ignored

Yeah but I grew up near Haynes Colony in Delaware, .... What's your excuse?? !!

Jun 3, 2012 4:37am

To lose more money, I am billionaire looking for fastest way to waste my fortune.

Jun 3, 2012 7:11am

Quoting moaf

Disliked

To lose more money, I am billionaire looking for fastest way to waste my fortune.

Ignored

send me some?

View 0 more replies to moaf

Hide replies to moaf

Jun 3, 2012 12:28pm

nice discussion..in the end i think it all comes down to herd behaviour...it is no coincidence that the best traders always say just to do the simple things, coz every single trader can see the simple hammer, the resistance under pressure. Yet some choose to ignore it (like me this week buying eurjpy at 99,6 holding till NFP) that was very bad but i will continue to buy it near those before mentioned intervention levels...and go long eurchf, EVERYONE so we can all make money

Jun 2, 2012 8:22pm

The simply goal of making money is finding the most *objective* trade that is available and rolling your stash all on the line. Yes, putting it all on the line. Risk management is still involved however the odds are in your favor.

For ego purposes, people try and *beat* the markets. They feel that X asset is going to go up or down and make their bets in that direction. Sometimes it works, but for many (risk management or not) it does not and/or is not profitable in the long run.

We always look away from what the simplest trade is. Take for instance, right now. Anyone who is not rolling the dice on long EUR/CHF is silly.

The SNB has said to no extent will they let the floor be broken. Could it still happen? Of course it can, however your stop is obvious and your risk is very low. Do I think the SNB will hold it for a while? Yes I do and therefore I am betting with the bank and not against.

Tell me one other trade in the FX market that is more objective than that?

We know what the implied floor is in the USD/JPY and we are nearing that. Will it hold? Maybe. Maybe not. But we know where the BoJ has stepped in before so why wouldn't they do it again?

Stop trying to feed your ego by beating markets. You can't. A majority of traders lose money and go broke. We (the collective) like to think we can beat that crowd and stand above the rest but many cannot and fail like their fellow traders.

Jun 3, 2012 9:04am

Quoting fxsport

Disliked

I couldn't disagree with someone more. You talk about 'objectivity' but everything you discuss, including EUR/CHF is SUBJECTIVE.

Loading all you eggs into one basket is NOT the OBJECTIVE method to trading but more of a GAMBLE, one that most traders would find draining on their account.

I'm a technical trader and I can tell you that I've made loads of pips this past month shorting the EUR/JPY and EUR/USD. Why? Because the charts are in daily downtrends and anyone who didn't make money on these pairs in the past 30 days is not objective at...

Ignored

I am sorry you disagree. Truth is, this market is a gamble. Coming from someone who consistently plays poker and walks away 3 to 4x more than I walked in with, I can tell you that trading (fx, stocks, etc) has very little skill involved. We like to think it does. We like to tell ourselves it is a hard business, but relative to other professions where money is made from money, it isn't.

I am glad you followed the trend on EUR and made some money, but in the long run, most traders burn up. Of course, like your "trend" trading technique, there will ALWAYS be a reason why you were burned on some other trade that costs you money. Always easy to talk about the winners but no one ever wants to talk about their losers.

Good luck... you're gonna need it.

Jun 3, 2012 5:31pm

Quoting fxsport

Disliked

So as someone who plays a lot of blackjack I know what you're talking about - the house has the edge - but not ALWAYS. There are times when I have that slight edge and I bet 10x more than base. Do I lose more times than I win? ABSOLUTELY.

But when I win I win more than when I lose

As a poker player do you go all in with 2 pair? Do you always raise when you have big slick? If you do then YOU need the luck.

What I disagreed with your comments is your explaination. You were giving SUBJECTIVE examples and saying the key is to be OBJECTIVE....

Ignored

Forex is nothing like poker. I won't even begin to waste the time explaining. For poker players around, the game is so much richer and diverse than trading.

Second - I never said that eur chf trade was not subjective but rather the most objective trade out there right now and that's the goal is to find that.

Finally poker and 21 are not even remotely the same game. Poker (NL hold em is this case) is not a mathematical game like 21. It is a game of reads. The market is not like that one bit minus being in the pits in chi town.

Jun 3, 2012 8:15pm — Edited

Quoting fxsport

Disliked

Wow you and I really are on different pages. You state the the EUR/CHF trade is objective because of statement made by SNB? Do you fold in hold 'em because the person across from you says he has 4 Aces?

That's where the talent comes in Forex trading - wading thru all the 'comments' and disecting what the real intentions are; assuming that you use fundaments for trading. As a technical trader I use charts and indicators tell me where to enter and exit.

As far as poker being only about 'reading' an opponent well I'll take your word for that...

Ignored

To say what I would do in the situation of 4 aces is unknown all depending on how we got their in the first place. In poker, you give give action to no one who you know plays quality hands particularly hard or if they catch a part of the flop, and you know their betting pattern, you don't stay in trying to chase it down to the river. On the opposite, you give action to those who cannot lay down subpar hands or those who are scared to put in the big money (bluff them).

This could be the same for forex. Instead of trying to read a chart and determine where price is going to go (more importantly, when it is going to get there and how), I can make a bet with the SNB at these levels at risk nearly nothing. To bet against them is to call Jordan's bluff.

Based on their economic position in Europe and the strict dialogue that comes from him, would I want to be on the opposite side of that trade? Absolutely not.

If he is lying, what are the advantages? If he does not throw in the kitchen sink, what happens? You assume that they cannot or will not hold the floor and just because he said it, he may not mean it. Okay, so what happens if he doesn't and it gets tested? What does your dissection of his comments tell you? What happens to their economy if he is caught "bluffing"?

The calculated risk as you call it, or just fancy words for gambling but knowing when to quit, is so small on a long EURCHF at these levels versus and other trade out there. There is nothing subjective about that.

Jun 4, 2012 12:12pm

Quoting Manipulator

Disliked

Trading is a skill and a skill unfortunately only intellectually accessible to very few - that is why only those with a real angle make it, hence the 1/20. I know because I have seen the two sides of play. It is however a gamble for the rest - no different than throwing dice.

Ignored

Trading is the wrong business. Market making is the way to go in this industry.

Jun 4, 2012 3:24pm

Quoting Exodus

Disliked

I been long EurChf for 3 months now, waiting for SNB to decide they prefer 1.25 more than 1.20. I have this feeling that this could be a long wait....

Ignored

Yes, it probably will be unless the SNB balance sheet explodes and they must relent or some type of short-term resolution for the struggling euro countries occurs.

It's a cheap call option without the issue of expiration and time decay. How can you go wrong there?

Jun 3, 2012 7:16am

BTW listening to what Bank officials are talking about is NOT OBJECTIVE but very SUBJECTIVE, especially when most of the time they lie.

Jun 2, 2012 9:55pm

The market is efficient, if you take money from it, then you found an inefficiency. Inefficiencies get arb'ed over time espeically as they become apparent. With the way the Forex market is setup, brokers can quickly identify inefficiencies from their own clients performance and arb them.

A retail S/L and for that matter retail S/R is well and truly part of market efficency. Look elsewhere.

Jun 3, 2012 10:09am

[quote=Jak;5723120]Well said dude![/quote

]I'll second that.

Jun 3, 2012 1:48am

Trading baseball cards as a kid was so much easier.

Jun 3, 2012 7:20am

Quoting moaf

Disliked

To lose more money, I am billionaire looking for fastest way to waste my fortune.

Ignored

LOL .. LOL .. i like this guy ..

Jun 4, 2012 12:25pm

Broker will always win. If you win, they get the spread. You lose they get your money.

Jun 2, 2012 7:41pm

Right on the money! (pun intended) I learned this lesson last year. I had a history of 90+% winners to losers, but it eventually bit me hard, wiping out 3 weeks of hard-earned profit in 1 week. I eventually closed the trade, got back in going short and made some of it back, but to date, that is still my biggest loss even with a larger account now.

You need to treat trading as a business and diligently work to better yourself in every way. One of the biggest reasons people fail at this business is the psychological aspect, pure and simple. Position sizing is important as you can set S/L and T/P appropriately, applying sound and reasonable trading principles from all the experts that have proven how to be successful.

I have been told to cut your losses short and let your winners ride. This is true, but it means that you have to apply those S/L with sound reasons behind them. One of the turning points for me was after that loss I had to really understand how to set the S/L and yes sometimes there will be stop runners taking you out, but the majority of the time, if you set S/L properly and do your homework on a technical analysis point of view you will be far better off.

For reference, read Van K Tharp position sizing strategy, Frost and Prechter's Elliot Wave Principles and get some sound coaching from someone who has proven how to succeed in this business. If you can manage to get a good coach like I have, that will shorten the time to profitability, just like in any other business.

Good luck all you traders out there!

Jun 2, 2012 9:12pm

Well said dude!

Quoting ryknowtrade

Disliked

The simply goal of making money is finding the most *objective* trade that is available and rolling your stash all on the line. Yes, putting it all on the line. Risk management is still involved however the odds are in your favor.

For ego purposes, people try and *beat* the markets. They feel that X asset is going to go up or down and make their bets in that direction. Sometimes it works, but for many (risk management or not) it does not and/or is not profitable in the long run.

We always look away from what the simplest trade is. Take for...

Ignored

Jun 3, 2012 9:13am

BTW, the winners in markets are no different than the winners in Vegas. The casino always wins when playing house games. To think you are smarter or more risk tolerant than them is simple ignorance.

Jun 3, 2012 12:33pm

Some tried to make money with pips, these are the ones that read charts n pay attention to what's happening in the market around them. The rest loves to have a brand new yellow submarine, arrogant traders who keep shouting their entries based on their "expert" experience. Or this group of traders simply follows blindly......

All in all, if one wants to trade - they really ought to keep on learning each day. What comes after pride is usually a big fall!

Jun 3, 2012 7:33pm

Trading is a skill and a skill unfortunately only intellectually accessible to very few - that is why only those with a real angle make it, hence the 1/20. I know because I have seen the two sides of play. It is however a gamble for the rest - no different than throwing dice.

Jun 4, 2012 10:38am

Quoting Exodus

Disliked

If you directed this comment at me,

Ignored

I am sure if the manipulator meant you he would have addressed you directly. I know and work with him in the team that is developing a full dynamic response to trading. He like me pays little active attention to news and eco analysis - (though we are both MBA's). Our approach is focused on price analysis. For instance I have 13 pairs in direction (with only two marginally negative due late entry) and grossing for time to date 8k at last check without as much looking at whats going on. Was surprised to see stock prices down in the USA when I looked. Do not let anything confuse you you must trade to win or lose. We will all make it regardless of style.

Jun 2, 2012 11:59pm

for money

Trader#9135

Jun 3, 2012 5:28pm

Quoting fxsport

Disliked

So as someone who plays a lot of blackjack I know what you're talking about - the house has the edge - but not ALWAYS. There are times when I have that slight edge and I bet 10x more than base. Do I lose more times than I win? ABSOLUTELY.

But when I win I win more than when I lose

As a poker player do you go all in with 2 pair? Do you always raise when you have big slick? If you do then YOU need the luck.

What I disagreed with your comments is your explaination. You were giving SUBJECTIVE examples and saying the key is to be OBJECTIVE....

Ignored

Forex is nothing like poker. I won't even begin to waste the time explaining. For poker players around, the game is so much richer and diverse than trading.

Second - I never said that eur chf trade was not subjective but rather the most objective trade out there right now and that's the goal is to find that.

Finally poker and 21 are not even remotely the same game. Poker (NL hold me is this case) is not a mathematical game like 21. It is a game of reads. The market is not like that one bit minus being in the pits in chi town.

Jun 3, 2012 9:07pm

I trade to feed my crack addiction, but I suppose we all come from different backgrounds.....

Jun 4, 2012 8:39am

Because I like to gamble.

Trader#B3D6

Jun 3, 2012 2:04am

just for fun

))

Related Stories

There are no posts to display for these settings.

Story Stats

Jun 2, 2012 7:20pm
Posted by
Mohammed Isah

Educational

33

6,821