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PipC Jul 27, 2015 7:04pm | Post# 1

90% of traders fail...
 
I know that most have heard this saying before. "90% of traders fail." It is given that most traders lose money. Anyone that has ever traded can see why. However, I think it is important to distinguish between traders and day traders. I would challenge that the statistics are different. If 90% of traders lose money, then I would venture to say 99.9% of day traders lose money. In other words, your chances of success are far lower as a day trader than as a swing trader or long term trader. All the scalpers and day traders lose far more money than people that hold positions overnight. Personally, I have found some success being profitable trading the daily chart. I would almost say it is easy. Of course it is not actually easy, but compared to my intraday track record, it definitely is. I find that with intra day trading, most of the traditional rules about trends etc. go out the window. Strong intraday trends are rare and when they do occur, they usually do in short bursts and turn around quickly. They don't trend the whole day in one direction typically, considering if they even trend at all that day. Ranging is far more common on an intra day level than on an overnight level. Signals and patterns are less reliable and profits evaporate as rapidly as they come. I think trend trading on an intra day level is a losing proposition. I believe it is possible to profit day trading, but not using the same rules as overnight trading or long term trading. What do you guys think?

Darryl Jul 27, 2015 10:49pm | Post# 2

Greetings from Houston TX. I agree with you 100%. Since I started trading using a weekly chart and round numbers, my trading experience has changed so much for the better. Trading using a weekly chart is not for the faint of heart.
Those pull backs are scary, but its worth it when the profit is in hundreds of pips.

PipC Jul 27, 2015 11:10pm | Post# 3

Greetings! Hello there. I haven't tried the weekly charts yet, but I can imagine how huge the moves must be on those charts! Stop loss levels must be thousands of pips. On the daily charts I employ a more set it and forget it strategy. It's pretty hands off. The price either hits my stop or take profit level. The only thing I do now is move my stop to break even once the move is well in my favor in order to virtually eliminate the possibility of a loss if it fails to reach my target. The benefits I have found with large time frames is:
1. much more time to calculate risk and position size
2. very low leverage required to trade a single position (this also means that one large move won't take you out of the trade)
3. longer trends
4. More reliable singals (probably due in part to longer trends and less noise)
5. More hands off approach and less time consuming

With intra day trading I have found the opposite to all of these in my experience. The playing field is so much harder. Especially when it comes to taking profits, since there are barely any trends to ride. Trends are so fleeting and fickle. The price will often trend less than an hour and then pull back into a range. Unless you are an extremely nimble daytrader or scalper, catching intra day moves is very tricky in my experience.

The benefits I have found using an intra day approach I would have to say are:
1. Instant gratification (you know where you stand by the end of the day)
2. Potential for very frequent compounding of returns, which could mean more profit (or losses unfortunately)
3. Less position risk (flat and in cash at the end of the day and no need to worry about the weekend gaps)

I am still trying to become profitable on an intra day level, but it is most definitely a work in progress.

AnilLonely Jul 28, 2015 3:56am | Post# 4

Greeting. Thanks a lot for sharing your views. I usually look into 4hrs and daily charts for trading. Earlier i used to do trading as a scalper. Yes i agree that most of the day traders fail to earn money. Now only i am learning new things and i would like to try this weekly charts on my demo account before applying on real accouts.

cakrajaya Jul 28, 2015 4:46am | Post# 5

I know that most have heard this saying before. "90% of traders fail." It is given that most traders lose money. Anyone that has ever traded can see why. However, I think it is important to distinguish between traders and day traders. I would challenge that the statistics are different. If 90% of traders lose money, then I would venture to say 99.9% of day traders lose money. In other words, your chances of success are far lower as a day trader than as a swing trader or long term trader. All the scalpers and day traders lose far more money than...
if we know ourself and know what we dealing, than profit its about a consequencies. profit or loss is a matter a result of from our action. yes of course daytraders surely different from swing or longtrend traders.
I am a day traders, and I called myself as a thief or pickpocket. as a thief I must know when is the best time and the best circumstance to steal. also as a thief I must know when I stop and run away.
that I thought is the core philosophy of the thief daytraders

PipC Jul 28, 2015 1:17pm | Post# 6

{quote} if we know ourself and know what we dealing, than profit its about a consequencies. profit or loss is a matter a result of from our action. yes of course daytraders surely different from swing or longtrend traders. I am a day traders, and I called myself as a thief or pickpocket. as a thief I must know when is the best time and the best circumstance to steal. also as a thief I must know when I stop and run away. that I thought is the core philosophy of the thief daytraders
I really like that thief analogy! I think that's exactly how it is for day traders. Day traders have to be nimble and quick with their positions. The whole concept of trend following just doesn't work on a micro time frame. Taking profits is not an option, but a must. If you let the winner run any further it will turn into a loss quicker than you think. So you have to be in and out like a pick pocket. On larger time frames such as daily and weekly, where time is less of a factor, you can afford to sit on your "winner" because the trend will not just change at break neck speed like it does on lower time frames.

Imaketrades Jul 28, 2015 3:58pm | Post# 7

It's a small world, I'm from Houston TX also. I agree, the day trading thing is very difficult if not almost impossible for the average Joe. I have been trading since 2002. I have learned a few things along the way. The simple fact is commissions will eat you alive on day trading. For example, you day trade forex, and your goals are 30 pips in an intraday trade. My broker takes $6.00 per round trip on a full lot of certain currencies, other is can be $12.00. On a 30 pip gain in the EURUSD I make $400.00 per lot. Great, now my broker gets to take $6.00 from me plus the spread so let say it averages to $6.50. That's 2.16% of your profit, and don't forget to add 2.16% to your losers. Even if 6 out of 10 trades you pick are winners the broker fees will get 11% of your earnings. Now trade for the long term and make 300 or more pips on a trade then that number drops to 1.1%. By going long term it a least gives you a fighting chance to win. I have never understood why guys are so worried about holding positions overnight, while most continue to day trade and blow through account after account. Some of my biggest winners have come from trades I enter at night and hold for several days even weeks.

MisterWhite Jul 28, 2015 5:05pm | Post# 8

Greetings from Houston TX. I agree with you 100%. Since I started trading using a weekly chart and round numbers, my trading experience has changed so much for the better. Trading using a weekly chart is not for the faint of heart. Those pull backs are scary, but its worth it when the profit is in hundreds of pips.
Darryl, I agree. I trade the Daily and Weekly charts exclusively, with Monthly as a very-long-term indicator. It really makes you put your risk/reward into perspective. Smaller position sizes are a must here. When you are underwater in trades, it can be nerve-wracking. Also, interest can add up, with larger position sizes.

MisterWhite Jul 28, 2015 5:43pm | Post# 9

Some of my biggest winners have come from trades I enter at night and hold for several days even weeks.
Yep, I typically hold for around a day, sometimes several days, depending on the trade. I'll usually take positions during Asia, go to bed, and let them play out during London/New York.

gazoop Jul 29, 2015 1:02am | Post# 10

{quote} Yep, I typically hold for around a day, sometimes several days, depending on the trade. I'll usually take positions during Asia, go to bed, and let them play out during London/New York.
Doing the same, but vice versa. It's a bit risky, but usually I get more profit than loss. Plus, when you open, go to bed and let them roll, you will avoid making some unnecessary moves.

grrbear Jul 29, 2015 7:35am | Post# 11

i'm still learning but it is my understanding that when the higher time frames are in a strong trend, the majority of the movement of that trend happens during volatile market hours. at those times i would expect the volatility to be directional

cakrajaya Jul 29, 2015 10:04am | Post# 12

1000 pips profit. how to achieve 1000 pips profit? it can be done in generally in 2 way. first, single blow 1000 pips. second, 1000 times strike 1 pip.
learn and conquer one style, that I thought is the key to success.

PipC Jul 29, 2015 11:38am | Post# 13

{quote} Yep, I typically hold for around a day, sometimes several days, depending on the trade. I'll usually take positions during Asia, go to bed, and let them play out during London/New York.
Do you find a lot of setups during the Asia session? What time frame do you trade and how long do you spend in front of the computer looking for setups each day?

MisterWhite Jul 29, 2015 12:47pm | Post# 14

{quote} Do you find a lot of setups during the Asia session? What time frame do you trade and how long do you spend in front of the computer looking for setups each day?
Not many; I'll usually find 2-3 setups. I trade Daily and Weekly charts exclusively. I'll look for potential 20-30 pip moves and spend a few hours watching the market. If it takes a day or more to materialize after taking the positions, I'm fine with that. I've been digging myself out of a hole this past month, so I've been trading actively during LN/NY. It is not indicative of my usual trading pattern.

pharley Jul 29, 2015 6:14pm | Post# 15

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I mostly agree with the opening argument. It's the same story with me. Previously I would day trade on the 5 min, 15 min or 1 hour charts. Sometimes good, many times not!
Now I concentrate on monthly/weekly charts for market structure and major support & resistance levels, then use the daily candles to look for entries.

Along with that, my previous trades used to remain open for minutes to perhaps a day. Now it's more like several days to several weeks.
As a consequence I've learned how to scale in, adding more positions as price action shows good opportunities. If done properly (with good risk/money mgt & moving stops to cover any losses), a good 500 to 800 pip move can get you thousands of pips due to the multiple entries.

Plus it's way less stress and much less screen time required.

Look at the thousands of pips attainable from GBP/JPY below - including from the pin bar at the bottom support area. Once you take a bigger time frame and see the bigger picture, trading becomes less stressful and you can get some huge pips. For those relatively newer traders who think that a massive stop is required, think again. Although larger than on a 15m chart, a huge stop isn't required. If I'm trading off a weekly chart, I might base my stop off action from a daily or 4hr chart. And look at the risk/reward you're getting. Also, with multiple entries to your target area, you're gaining thousands of pips. Thousands. Just learn how to do it and it will completely change your trading results for the better.

Cheers
Pharley

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PipC Jul 29, 2015 9:35pm | Post# 16

{quote} Not many; I'll usually find 2-3 setups. I trade Daily and Weekly charts exclusively. I'll look for potential 20-30 pip moves and spend a few hours watching the market. If it takes a day or more to materialize after taking the positions, I'm fine with that. I've been digging myself out of a hole this past month, so I've been trading actively during LN/NY. It is not indicative of my usual trading pattern.
I see. 2-3 setups isn't bad at all. Especially if they are found every day. What would you say is the holding time frame on average for your trades? I imagine not long at all since you are only going for 20-30 pip moves. I can't imagine finding a move that small on a daily chart, much less a weekly chart. That just goes to show how many different trading styles and holding periods can be derived from the same chart and time frame. When I trade the daily chart, I often go for hundreds to thousands of pip moves. As you can imagine that can take weeks to months. It requires less market monitoring though and doesn't present setups daily. Thus, I am forced to trade many more pairs to make up for the lack of setups. I trade anything except exotic pairs. My price action setups are obviously much larger though and take more time to play out. My stop losses can be as much as 300 pips sometimes, which makes the trade take a lot of time, but of course they rarely get hit too so I guess that is the trade off.

PipC Jul 29, 2015 9:53pm | Post# 17

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I mostly agree with the opening argument. It's the same story with me. Previously I would day trade on the 5 min, 15 min or 1 hour charts. Sometimes good, many times not! Now I concentrate on monthly/weekly charts for market structure and major support & resistance levels, then use the daily candles to look for entries. Along with that, my previous trades used to remain open for minutes to perhaps a day. Now it's more like several days to several weeks. As a consequence I've learned how to scale in, adding more positions as price action shows good...
That trading technique is very interesting. I have not tried scaling into my trades yet, but it wouldn't work well on an intra-day basis for me probably. I could see how you could increase size on each new breakout to a new high. Let me ask you this: Do you also move up your stop each time you add a new position seeing as how you are averaging up your entry price or does your stop remain static? Also, how long would you say you spend each day looking for setups?

By the way, the 5 minute charts are especially difficult. Unfortunately, I would never be in and out of a trade in the same day on any other time frame using my trading style. I trade chart patterns rather than individual candlestick patterns, so my trading view is too macro level to fit in a single day on any other time frame.
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Notice where the trend ends in that screenshot. I underlined it. It develops into a trading range and then continues later. This is what I mean by short trends on small time frames. In this case it is fortunate that the trend continued, but most of the time there would be a sharp reversal instead of the trading range.

lasty Jul 30, 2015 12:24am | Post# 18

I know that most have heard this saying before. "90% of traders fail." It is given that most traders lose money. Anyone that has ever traded can see why. However, I think it is important to distinguish between traders and day traders. I would challenge that the statistics are different. If 90% of traders lose money, then I would venture to say 99.9% of day traders lose money. In other words, your chances of success are far lower as a day trader than as a swing trader or long term trader. All the scalpers and day traders lose far more money than...
90% of people lose money trading .. Are they traders or just gamblers?

Then comes the analysis.. over what time period did they lose? .. what did they lose? their life savings?

You can probably say that 99.9% of people who have bought a lottery ticket have lost .

There aren't any set rules in trading and most fx educators in this industry are money grabbing leaches who prey on the gullible for a quick buck.

The only major rule I have is keep yourself in the game.
ie dont allow to be taken out by stop loss triggering let the leverage be your friend and trade well within yourself .

Once you start to see patterns developing with out looking at charts or discovering trends without others identifying them for you , then you're on your way to profitablity.

Stay away from the gamblers .. they are the so called 90% of bad trades

LuKa12 Jul 30, 2015 12:58am | Post# 19

well done Darryl. moving to a weekly time frame requires a lot more patience and discipline. Most people including myself would find it very hard to wait upto 10 weeks for a set up.

Good to hear it's working out for u.

Greetings from Houston TX. I agree with you 100%. Since I started trading using a weekly chart and round numbers, my trading experience has changed so much for the better. Trading using a weekly chart is not for the faint of heart. Those pull backs are scary, but its worth it when the profit is in hundreds of pips.

pharley Jul 30, 2015 3:56am | Post# 20

Hi PipC,

In answer to your questions:

1. When I'm entering multiple times, the previous trades stop losses are always moved up to a couple of pips in front of entry. By doing that, my risk on the earlier trades is zero. Then for the new trade, I look at where a logical SL would be, adjust lot size accordingly and trade. I don't work on % of account - I much prefer to work with $ of risk. As price moves up on other multiple trades, all my previous stops move as well, thereby locking in $ profits. After a few trades it gets very interesting - Say by the time I'm entering trade 4, trade 1 might be up $1000, trade 2 by $700, trade 3 by $200 - the risk I can take with the 4th trade can be larger. Say I put the SL for the 4th around 50 pips away from entry, then I move trade 1, 2 and 3, stops up to the same point. I may have locked in profits of $800 in T1, $500 on T2 and Break Even on T3. Even if price goes against me, I still get 800+ 500 = $1300 less the loss from the 4th one if stops are hit. So the lot size I can use for 4th trade can be larger.

2. I only take entries off the 4hr charts based on several set ups I have. It only takes me a couple of seconds every 4 hours when a new candle forms to look at it, and decide if a new entry set up is present. If not, leave and walk away for another 4 hours. If there is, then I go through the motion - look for logical stop location, previous trade stop moved up to new stop area, calculate the lot size, then enter.

I take entries from the 4hr candles and nothing less. Bear in mind, my market structure and bias is primarily take from the weekly charts.
Also, all my trades have a target point again based off major support or resistance (but not at S/R lines - just in the general area). So as the price moves (hopefully) in my favour, I'm waiting for 4 hr price action to let me know there's another opportunity to enter.

Sometimes on a second or third trade, I can't get earlier trade stops to BE, so what's the answer? Well let's say I want my risk to be $1,000 - I make sure that all my trades that are at risk have a total risk of only the $1,000. It's actually easier to do on cTrader than say MT4, as cTrader shows you what your risk is in $ for each trade. But I use my own calculator in Excel, or you can use one of the online lot size calculators (Babypips has one).

Yes, once you grasp the concept of longer term trading and entering multiple times, there's many many pips and $ to be had - IF you do it correctly.

Oh, something else I do - the very first trade of a run, I only risk half of what would do normally. The reason is that I'm not sure yet of a new trend or turnaround forming. Even with a good Daily Pin Bar (one of my set ups), engulfing etc at support/resistance doesn't guarantee price will sail away in the right direction. So trade number 1 is taken at half my normal risk.

Trading this way keeps me in the game. I can take heaps of losses at half my normal risk at trade number 1 and still be able to trade.

Happy to answer any questions and hope this is useful.

Cheers
Phil


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