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The truth about trading

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  • First Post: Edited Jan 23, 2010 1:31am Jan 17, 2010 12:59am | Edited Jan 23, 2010 1:31am
  •  Mr demark
  • Joined Apr 2007 | Status: Dont get greedy. Dont be too shy | 453 Posts
Well, its been a while since i posted anything here. Been busy with work and trading.

I know there are some greenhorn traders so i got to share a few words to help with their education and confidence: the truths about trading.

1. You will not make any money from Forex unless you understand the architecture of the market (why prices move) and the psychology behind it all. Why does the price change and why this pattern is formed? Why a trend-line break is so powerful? What can pinbars tell us about market sentiment and what the big boys are thinking

2. Once you know the architecture and the psychology of those who make up the "market" you will have to apply some money management strategy to keep your growth (or shrink) consistent/controlled. You do not want to have 5 winning trades and 1 helleva loser that breaks the piggy bank.

3. Trade by looking on weekly, then daily then maybe 4hr chart for now . The weekly and daily have their own patterns and patterns on this magnitude are hard to break by lower time frames. So its a good idea to trade with the bigger waves.

4. IF your expectations are too high it will reflect on your account equity. Trade as frequent as u see fit. Its your money
updated: DONT AIM TO MAKE X% per month. Just trade what you see. Being in the market at all times may not be healthy. There are three positions in the market: Long, Short, Out of trade (sidelines)

5. There are a few good solid trades per month. Those that are A+ trades and God bless when u find them.

6. Dont hope, but its ok to fear. REASON it OUT. IF the market is running out of steam, don't hope and pray u gonna make more pips....GET OUT of the trade, at least partially. If you are wrong, you are wrong. GET OUT. No way the market is gonna say "guys, we made a mistake"
No, YOU made the mistake and must correct yourself by exiting the trade.

7. In the same breath, learn to live out your trades lifetime...dont exit too quickly WITHOUT A REASON. A good question to ask yourself when thinking of exit is this: (if u were selling) ask yourself would you buy here? why would you buy? if u find a reason to buy then you found a reason to exit your sell trade. Reasons may be support/resistance area....or a price pattern forming that is against your trade direction.

8. Remember, that retail traders are only about 2-3% of total trading volume (now i'm hearing 20%). Others are institutional traders who trade for liquidity and some could care less where the price will be next week: some even profit from the spread.

You are only following a herd much bigger than yourself. You are trying to stay alive by not letting the market run you over.
100% of traders are losers. Just that some win more than they lose!
  • Post #2
  • Quote
  • Jan 17, 2010 5:42am Jan 17, 2010 5:42am
  •  Scotty B
  • Joined Dec 2007 | Status: Informed | 1,640 Posts
Quoting Mr demark
Disliked

8. Remember, that retail traders are only about 2-3% of total trading volume. Others are institutional traders who trade for liquidity and some could care less where the price will be next week. You are only following a herd much bigger than yourself.
Ignored
I like to watch the "Wall Street Warriors" series on Hulu.com, it's all pretty fluffy stuff, but in one of the episodes one of the higer up guys at FXCM claims that the retail sector of the spot fx mkt is now around 20%.

I don't know how much truth there is to that, but you can hear it for yourself if you want. Really, it doesn't really matter at the end of the day. As long as there are people trading, money will be made.
 
 
  • Post #3
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  • Jan 17, 2010 3:50pm Jan 17, 2010 3:50pm
  •  Razorjack
  • Joined Jul 2009 | Status: Apex Predator | 281 Posts
Hi Mr demark,

Great post, I agree with you 100%. My comments follow:

1. You will not make any money from Forex unless you understand the architecture of the market (why prices move) and the psychology behind it all. Why does the price change and why this pattern is formed? Why a trend-line break is so powerful? What can pinbars tell us about market sentiment and what the big boys are thinking

Yes, understanding what's moving the markets and why is key. I find it strange that most people on this forum ignore the fundamentals. I'd add to your list here: What causes market turns? What would it take to shift the current trend? etc

This will help to discover new opportunities before they happen, then all you need to do is wait for your signals and strike.

2. Once you know the architecture and the psychology of those who make up the "market" you will have to apply some mone management strategy to keep your growth (or shrink) consistent/controlled. You do not want to have 5 winning trades and 1 helleva loser that breaks the piggy bank.

Yes, exactly but I'd go so far as to say that a complete system not only tells you when to enter and exit, but also includes money management as well as trade management. For instance, you should know how much to risk at the initial entry of a trade but also when you should add to or reduce your position.

3. Trade by looking on weekly, then daily then maybe 4hr chart . The weekly and daily have their own patterns and patterns on this magnitude are hard to break by lower time frames. So its a good idea to trade with the bigger waves.

Yes, agree. I'd say that it's important to understand that different time frames have different trends. In my opinion, any trader that is going to succeed needs to always be aware of the primary long term trends, no matter what time frame he/she is trading.

5. There are a few good solid trades per month. Those that are A+ trades and God bless when u find them.

Once you understand what is moving the markets and the psychology behind it, you will also recognize those rare opportunities before they happen where all the odds line up in your favor and you can risk a bit more to go for huge profits.

6. Dont hope, but its ok to fear. REASON it OUT. IF the market is running out of steam, don't hope and pray u gonna make more pips....GET OUT of the trade, at least partially. If you are wrong, you are wrong. GET OUT. No way the market is gonna say "guys, we made a mistake"
No, YOU made the mistake and must correct yourself by exiting the trade.


Agreed, there should always be a plan for entering and exiting, if the trade doesn't react the way you anticipated then of course you should get out .... not hope.

7. In the same breath, learn to live out your trades lifetime...dont exit too quickly WITHOUT A REASON. A good question to ask yourself when thinking of exit is this: (if u were selling) ask yourself would you buy here? why would you buy? if u find a reason to buy then you found a reason to exit your sell trade. Reasons may be support/resistance area....or a price pattern forming that is against your trade direction.

Yes, exactly. Other good reasons could be that the fundamentals have changed, or that the current run has been running longer statistically then previous runs.

8. Remember, that retail traders are only about 2-3% of total trading volume. Others are institutional traders who trade for liquidity and some could care less where the price will be next week. You are only following a herd much bigger than yourself.

Yes, you are only a small fish in the big pond. This is why it's important to understand the psychology of the market movers. The advantage of being small is that we can enter trades at places where the big boys can't without moving the market against us. We should exploit that advantage whenever possible.

Again, good post!

-Razorjack
-Razorjack
 
 
  • Post #4
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  • Jan 18, 2010 10:04am Jan 18, 2010 10:04am
  •  Mr demark
  • Joined Apr 2007 | Status: Dont get greedy. Dont be too shy | 453 Posts
Thanks Razor

I was thinking of forming a closed group for forex traders where we post only the best trades and alert members by email. Reason for this is that we cant stare at the charts as we wish so with a good amount of us looking whenever we can then MAYBE we can pick up some more trade entries.

just thinking still
100% of traders are losers. Just that some win more than they lose!
 
 
  • Post #5
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  • Jan 18, 2010 10:10am Jan 18, 2010 10:10am
  •  Xaron
  • Joined Apr 2007 | Status: Evil Kraut | 2,743 Posts
Sounds like a great idea.
 
 
  • Post #6
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  • Jan 18, 2010 10:52am Jan 18, 2010 10:52am
  •  Fx chartist
  • | Joined Aug 2008 | Status: Discretionary day trader | 86 Posts
I suppose this is your point of view rather than the truth of trading......
Trading is the game of fear and greed.
 
 
  • Post #7
  • Quote
  • Jan 18, 2010 11:34am Jan 18, 2010 11:34am
  •  Porkpie
  • Joined Mar 2007 | Status: Member | 1,142 Posts
Quoting Fx chartist
Disliked
I suppose this is your point of view rather than the truth of trading......
Ignored
It is my point of view that he believes his point of view is the truth of trading. That is the truth of my point of view about his point of view. But, it is not necessarily the truth. The truth is that this is my point of view
 
 
  • Post #8
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  • Jan 18, 2010 3:50pm Jan 18, 2010 3:50pm
  •  fritz
  • | Joined Jul 2004 | Status: Member | 75 Posts
I would agree ie. 100% point of view only. Fritz


Quoting Fx chartist
Disliked
I suppose this is your point of view rather than the truth of trading......
Ignored
 
 
  • Post #9
  • Quote
  • Jan 18, 2010 5:03pm Jan 18, 2010 5:03pm
  •  TheGreatMilenko
  • Joined Jul 2006 | Status: Member | 967 Posts
Quoting Mr demark
Disliked
Well, its been a while since i posted anything here. Been busy with work and trading.

I know there are some greenhorn traders so i got to share a few words to help with their education and confidence: the truths about trading.

1. You will not make any money from Forex unless you understand the architecture of the market (why prices move) and the psychology behind it all. Why does the price change and why this pattern is formed? Why a trend-line break is so powerful? What can pinbars tell us about market sentiment and what the big boys are...
Ignored
Fantastic post..heard nothing like it before!!!! Where did you get that stuff from?
 
 
  • Post #10
  • Quote
  • Jan 18, 2010 5:04pm Jan 18, 2010 5:04pm
  •  Turveyd
  • | Membership Revoked | Joined Aug 2006 | 11,977 Posts
Sorry Mr Denmark, but sadly you've already fallen for all the reasons most on here won't make money.


Erase everything you've been taught and start from scratch.


PinBars are randomly formed due to the arbitory nature of time sorry but there identical to 2 bars 1 closing at the bottom and 1 showing a high high the difference being the time factor ticked over while the price was at the bottom.


Until you get the basics, stop preaching the correct way, there are many ways to suite many different people.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
 
 
  • Post #11
  • Quote
  • Jan 18, 2010 5:06pm Jan 18, 2010 5:06pm
  •  TheGreatMilenko
  • Joined Jul 2006 | Status: Member | 967 Posts
Quoting Turveyd
Disliked
Sorry Mr Denmark, but sadly you've already fallen for all the reasons most on here won't make money.


Erase everything you've been taught and start from scratch.


PinBars are randomly formed due to the arbitory nature of time sorry but there identical to 2 bars 1 closing at the bottom and 1 showing a high high the difference being the time factor ticked over while the price was at the bottom.


Until you get the basics, stop preaching the correct way, there are many ways to suite many different people.
Ignored
Is it just me, or can anyone else smell shit?
 
 
  • Post #12
  • Quote
  • Jan 18, 2010 5:10pm Jan 18, 2010 5:10pm
  •  TheGreatMilenko
  • Joined Jul 2006 | Status: Member | 967 Posts
Quoting Turveyd
Disliked
Sorry Mr Denmark, but sadly you've already fallen for all the reasons most on here won't make money.


Erase everything you've been taught and start from scratch.


PinBars are randomly formed due to the arbitory nature of time sorry but there identical to 2 bars 1 closing at the bottom and 1 showing a high high the difference being the time factor ticked over while the price was at the bottom.


Until you get the basics, stop preaching the correct way, there are many ways to suite many different people.
Ignored
You fuckin hypocrIte!! You're (not YOUR) always going on about how 4hr charts are the wrong way and we should all trade the 5 nano second charts!!
You are the biggest idiot I have ever had the misfortune to come across. For fuck's sake read back to yourself what you post, and compare it with the other shit you post. Contradiction is not the word!
 
 
  • Post #13
  • Quote
  • Jan 18, 2010 5:13pm Jan 18, 2010 5:13pm
  •  TheGreatMilenko
  • Joined Jul 2006 | Status: Member | 967 Posts
Quoting Turveyd
Disliked
Sorry Mr Denmark, but sadly you've already fallen for all the reasons most on here won't make money.


Erase everything you've been taught and start from scratch.


PinBars are randomly formed due to the arbitory nature of time sorry but there identical to 2 bars 1 closing at the bottom and 1 showing a high high the difference being the time factor ticked over while the price was at the bottom.


Until you get the basics, stop preaching the correct way, there are many ways to suite many different people.
Ignored
This from a man who trades with pennies..and loses them....
 
 
  • Post #14
  • Quote
  • Edited 6:20pm Jan 18, 2010 6:06pm | Edited 6:20pm
  •  Mr demark
  • Joined Apr 2007 | Status: Dont get greedy. Dont be too shy | 453 Posts
Well, that does not mean my point of view is not the truth either.

As i said in my post, this thread were for the greenhorns who just started out. It took me some time to figure out how the market works and this was just a shortcut for you.

(after tons of forex literature, video lessons and $5,000 DVDs. Not to mention building tons of systems and dozens of Expert Advisor applets)

Remember, forex "GURUS" will create flashy websites to lure your money and BUY their system.

Ask yourself if this really works, would you have to sell this stuff on the net?
Why not sell it to the hedge funds?

Again, for those of you who are not seeing the big picture, let me create a thumbnail for you and this is as simple as i can get it. If you don't believe me and rather class it as my point of view...well, its your point of view that its my point of view .

You are barely a spec the market, you are only a small lamb in a herd of wildebeest. All you are trying to do is to figure out what the herd is doing so you can follow them and not get run over.

Turveyd Go suck you madda!

With over 5 years trading fx i think i know whats going on by now
100% of traders are losers. Just that some win more than they lose!
 
 
  • Post #15
  • Quote
  • Jan 18, 2010 6:10pm Jan 18, 2010 6:10pm
  •  spekitox
  • | Joined Sep 2008 | Status: Lucky Man | 2,267 Posts
LOL folks, chill, make trades not war
forget about tomorrow, just steal away into the night
 
 
  • Post #16
  • Quote
  • Jan 18, 2010 6:11pm Jan 18, 2010 6:11pm
  •  Turveyd
  • | Membership Revoked | Joined Aug 2006 | 11,977 Posts
Quoting Mr demark
Disliked
Well, that does not mean my point of view is not the truth either. With over 5 years trading fx i think i know whats going on by now
Ignored

From a point of view of a long term trader who's aiming to make 10-15% per year and not sit infront of the PC, other than a few bits of well misinformation your not to far off. So thats what works for you

BUT Short term intraday traders and Scalpers do exist and if your prepared to set a hour or 4 aside each day to sit infront of your PC ( Job Like ) boat loads of money can be harvested much easier than all of the above.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
 
 
  • Post #17
  • Quote
  • Jan 18, 2010 6:14pm Jan 18, 2010 6:14pm
  •  TheGreatMilenko
  • Joined Jul 2006 | Status: Member | 967 Posts
Quoting Turveyd
Disliked
From a point of view of a long term trader who's aiming to make 10-15% per year and not sit infront of the PC, other than a few bits of well misinformation your not to far off. So thats what works for you

BUT Short term intraday traders and Scalpers do exist and if your prepared to set a hour or 4 aside each day to sit infront of your PC ( Job Like ) boat loads of money can be harvested much easier than all of the above.
Ignored
So after all these years why aren't you doing it?
 
 
  • Post #18
  • Quote
  • Jan 18, 2010 6:16pm Jan 18, 2010 6:16pm
  •  spekitox
  • | Joined Sep 2008 | Status: Lucky Man | 2,267 Posts
uh, arbitory or arbitrary? there or they're?

Quoting Turveyd
Disliked
PinBars are randomly formed due to the arbitory nature of time sorry but there identical to 2 bars 1 closing at the bottom and 1 showing a high high the difference being the time factor ticked over while the price was at the bottom.
Ignored
The best part:

Quoting Turveyd
Disliked
Until you get the basics, stop preaching the correct way
Ignored
forget about tomorrow, just steal away into the night
 
 
  • Post #19
  • Quote
  • Jan 18, 2010 6:21pm Jan 18, 2010 6:21pm
  •  Mr demark
  • Joined Apr 2007 | Status: Dont get greedy. Dont be too shy | 453 Posts
LMAOOOOOOOOOOOOOO ^^^
100% of traders are losers. Just that some win more than they lose!
 
 
  • Post #20
  • Quote
  • Jan 18, 2010 6:25pm Jan 18, 2010 6:25pm
  •  Turveyd
  • | Membership Revoked | Joined Aug 2006 | 11,977 Posts
Quoting spekitox
Disliked
uh, arbitory or arbitrary? there or they're?



The best part:
Ignored

It's a trading site, not a english lit site!!

I don't care and never ever will, I'll leave the caring for saddo
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
 
 
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