The brutal truth of day trading | Page 105 | Forex Factory

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The brutal truth of day trading

  • #2,081
  • Jul 18, 2021 1:48pm Jul 18, 2021 1:48pm
Quoting gepards
SL is 13% of the account. risk/reward 1/7.
Quoting gepards
TP is 1%.
Didn't get your math.
How can SL 13% and TP 1% be RR 1/7?

It is 13/1
Observer effect
  • #2,082
  • Jul 18, 2021 3:15pm Jul 18, 2021 3:15pm
Quoting ryuryu
{quote} {quote} Didn't get your math. How can SL 13% and TP 1% be RR 1/7? It is 13/1
SL 13% and TP 1% is for MSFT.

For FB is 1/7.
  • #2,083
  • Jul 19, 2021 5:33am Jul 19, 2021 5:33am
Example. Today we were trading UC.

2 traders were shorting it 2 times, I had 2 long trades.

And we all got profit.

The brutal truth of trading is that bulls make money, bears make money and pigs get slaughtered.

Anyway I'm sure that trading is like professional sports: you have to practice every day to get better. That's why it is better to start with scalping, because I can't imagine how you can train yourself on weekly charts. It is the same like you will practice boxing once a year.
Observer effect
  • #2,084
  • Jul 19, 2021 5:49am Jul 19, 2021 5:49am
Quoting ryuryu
Example. Today we were trading UC. 2 traders were shorting it 2 times, I had 2 long trades. And we all got profit. The brutal truth of trading is that bulls make money, bears make money and pigs get slaughtered. Anyway I'm sure that trading is like professional sports: you have to practice every day to get better. That's why it is better to start with scalping, because I can't imagine how you can train yourself on weekly charts. It is the same like you will practice boxing once a year.
Scalping is not good for training beginners.
Spot, futures or CFDs will certainly cause psychological pain, or force the beginners or intermediate traders to juggle with stop losses or give them any kind of peace of mind by knowing the total risk involved even before entering the trade. Knowing the total loss in advance can give comfort to those who know that the loss will not affect their lifestyle.
All the three contracts - spot, futures and cfds - carry unlimited loss and unlimited profit and need active risk management.

A few CFD brokers have now started offering Buying of options but their pricing is such that you can't make money easily.
CME or Eurex or many other exchanges offer that futures options that carry Limited Risk and Unlimited Profit.
https://www.forexfactory.com/thread/...9#post13621049
Practice makes a person perfect
  • #2,085
  • Jul 19, 2021 7:24am Jul 19, 2021 7:24am
Quoting simnz
{quote} Scalping is not good for training beginners. Spot, futures or CFDs will certainly cause psychological pain, or force the beginners or intermediate traders to juggle with stop losses or give them any kind of peace of mind by knowing the total risk involved even before entering the trade. Knowing the total loss in advance can give comfort to those who know that the loss will not affect their lifestyle. All the three contracts - spot, futures and cfds - carry unlimited loss and unlimited profit and need active risk management. A few CFD brokers...
1. I mean frequency of trades.
2. Why not train on demo?
3. Didn't get how lack of basic math skills can cause psychological pain. If trader can't calculate the risk, don't understand how margin works no matter what to trade first he need to learn it.
Observer effect
  • #2,086
  • Jul 19, 2021 8:29am Jul 19, 2021 8:29am
Quoting ryuryu
{quote} 1. I mean frequency of trades. 2. Why not train on demo? 3. Didn't get how lack of basic math skills can cause psychological pain. If trader can't calculate the risk, don't understand how margin works no matter what to trade first he need to learn it.
I shared my experience. Now keep arguing with yourself.
Practice makes a person perfect
  • #2,087
  • Jul 19, 2021 8:48am Jul 19, 2021 8:48am
Quoting simnz
{quote} I shared my experience. Now keep arguing with yourself.
Ok, let me argue with myself.
All that very important information about lifestyle, psychology, pain and comfort is very interesting. But I said that if we compare trading with professional sports it is better to train yourself as frequent as you can. That's why scalping (a lot of trades on lower timeframes) is much preferred then trading on weekly charts. Because if you will trade on weekly you will be ready after 15-20 years only.

P.S. I never said a word about type of contract you should trade. Choose what you like. You can short perpetual bitcoin contract on bitmex with 1x leverage and there will be no risk at all. Zero risk, no liquidation price ever. Even if price go opposite you will just hedge USD value (and earn some swap).
Observer effect
  • #2,088
  • Edited 9:45am Jul 19, 2021 9:29am | Edited 9:45am
Quoting here2there
{quote} That sounds interesting. I would like to see it on a live trade.
I have been posting this morning, trying to get a position in on the GA, while also trading the GY. The GA has mis-fired once (took a -30 pip hit) and is in the process of mis-firing again (I'm up but it's crashing again). But the GY was productive today (up about 80 pips). As I noted in my journal, it's difficult to make posts of contemporaneous activities while also trading, but I'm trying. As the GA has been sputtering I have only watched the EA behave very well...should have been trading it this morning! Hope you are trading well today!
  • #2,089
  • Jul 19, 2021 9:35am Jul 19, 2021 9:35am
Start with a penny, double compound every day, make a million in less than a month...
  • #2,090
  • Jul 19, 2021 9:37am Jul 19, 2021 9:37am
Quoting GEfx
{quote} I have been posting this morning, trying to get a position in on the GA, while also trading the GY. The GA has mis-fired once (took a -30 pip hit) and is in the process of mis-firing again (I'm up but it's crashing again). But the GY was productive today (up about 70 pips). As I noted in my journal, it's difficult to make posts of contemporaneous activities while also trading, but I'm trying. As the GA has been sputtering I have only watched the EA behave very well...should have been trading it this morning! Hope you are trading well today!...
No problem. No pressure. I understand.
Learn from your mistakes and march on.
  • #2,091
  • Jul 19, 2021 9:48am Jul 19, 2021 9:48am
Quoting cuchuflito
Start with a penny, double compound every day, make a million in less than a month...
Start with a penny found coin, double compound every day hour, make a million billion in less than a month week...
Observer effect
  • #2,092
  • Jul 19, 2021 11:41am Jul 19, 2021 11:41am
Quoting remonpilip
Trend following - the markets are chaotic. They are non-linear dynamic systems. Market prices are highly random with a trend component. Within chaotic systems is the concept of a fractal, “self similar”. Just like the branches of a tree that get smaller and smaller but look like the original tree as a whole. Therefore a system can be random in the short term, but deterministic in the long term. Your lung is another example. So is the coastline view at 10,000 feet. As you slowly get closer, the coastline looks the same! Ice crystals, nautilus shells....
I just want to point out that these paragraphs are contradicting with each other. I have a feeling you do not understand how the fractal nature of the market affects the market. If fractal patterns are self similar, it means they behave the same way on all scales. Since price is fractal, the way it moves in every fractal (timeframe) is the same. That means the price behavior of a daily chart will be identical to that of a 1 minute chart. The only difference is that the movement will take a much longer time on the daily than the one minute.

This leads to one conclusion, timeframe is irrelevant and any successful strategy that works on one timeframe will work on all timeframes. If you do not have a strategy that works on all timeframes, then you do not have a complete understanding of the market. If you think that lower timeframes are impossible to trade and make money and you can only make money with higher timeframe, again, you do not fully understand the nature of the market. You may prefer higher time frames to lower ones because you saw success only in higher time frames which is perfectly fine. Just please do not say you cannot make money on low timeframes because there are plenty of people who make money on those timeframes.

Could you please elaborate more on this sentence: "There is not enough time for these patterns or fractals to appear. You cannot see the pattern of self similar until it emerges over a longer term!"?

In fact the higher the timeframe, the more time needed for these fractal patterns to occur, not the other way around. A 'W' pattern will take a few minutes to form on the 1min chart and a few months to form on a monthly chart, a few years to form on an annual chart...Do you know how long it will take on a decade chart? You won't be alive to find out lol.
  • #2,093
  • Jul 19, 2021 11:55am Jul 19, 2021 11:55am
Quoting trickshady
If you do not have a strategy that works on all timeframes, then you do not have a complete understanding of the market. If you think that lower timeframes are impossible to trade and make money and you can only make money with higher timeframe, again, you do not fully understand the nature of the market.
Spread. For example 1 pip. On 1M chart pattern can move let's say 3 pips. On H1 chart the same pattern can move 30 pips. Spread for M1 pattern takes 33% but on H1 it takes only 3%. Trading on H1 is less expensive than on M1. 30pips can move within 1 day - no swaps. But even with swaps for 1-2 days it is still less expensive than M1.
  • #2,094
  • Jul 19, 2021 12:05pm Jul 19, 2021 12:05pm
Quoting gepards
{quote} Spread. For example 1 pip. On 1M chart pattern can move let's say 3 pips. On H1 chart the same pattern can move 30 pips. Spread for M1 pattern takes 33% but on H1 it takes only 3%. Trading on H1 is less expensive than on M1. 30pips can move within 1 day - no swaps. But even with swaps for 1-2 days it is still less expensive than M1.
100% agree with you and that is a valid reason to ditch lower timeframes, not the stuff that guy mentioned which made no sense. You can make money on lower timeframes. The question is, is it worth it because of the spread? If your spread is small enough to where you can make money then go for it, if not then don't.
  • #2,095
  • Jul 19, 2021 1:33pm Jul 19, 2021 1:33pm
Quoting trickshady
{quote} 100% agree with you and that is a valid reason to ditch lower timeframes, not the stuff that guy mentioned which made no sense. You can make money on lower timeframes. The question is, is it worth it because of the spread? If your spread is small enough to where you can make money then go for it, if not then don't.
So you will give up let say few hundreds bucks daily net profit because you have to pay let say 10% costs???
  • #2,096
  • Jul 19, 2021 2:01pm Jul 19, 2021 2:01pm
This is personal preference. I do trade the 1min timeframe but only when I feel like it. I do not have a spread problem. My problem with the 1min TF is that i have to be glued to the screen. Sometimes i do it, sometimes i dont
  • #2,097
  • Jul 19, 2021 2:34pm Jul 19, 2021 2:34pm
Quoting trickshady
This is personal preference. I do trade the 1min timeframe but only when I feel like it. I do not have a spread problem. My problem with the 1min TF is that i have to be glued to the screen. Sometimes i do it, sometimes i dont
Thats right, onest point... personal preference, yes but not a BS about so called "noise". This noise is just data one is not able to use.
M1 patterns ... you can use even one-tick chart patterns to win, if you know how to do it...
Green Pips
  • #2,098
  • Jul 19, 2021 5:14pm Jul 19, 2021 5:14pm
Quoting trickshady
{quote} 100% agree with you and that is a valid reason to ditch lower timeframes, not the stuff that guy mentioned which made no sense. You can make money on lower timeframes. The question is, is it worth it because of the spread? If your spread is small enough to where you can make money then go for it, if not then don't.
Spread is irrelevant if you can find 25 setups on M1 compared to 1 setup on H1.
Out of those 25 setups, one or two will be better than most H1 setups you ever see in half a day of WAITING.

Trading costs is the fee we pay for very very cheap finanace.
Trading needs to be undertaken when the probability of winning obscures the cost of trading.
Trading thin liquidity at the boundary of the charts
  • #2,099
  • Jul 19, 2021 5:53pm Jul 19, 2021 5:53pm
Quoting RickM
{quote} Spread is irrelevant if you can find 25 setups on M1 compared to 1 setup on H1. Out of those 25 setups, one or two will be better than most H1 setups you ever see in half a day of WAITING.
I agree that spread is irrelevant in a trade decision. But, please elaborate on the qualifier "better" regarding M1 vs 1H set ups.
  • #2,100
  • Jul 19, 2021 6:37pm Jul 19, 2021 6:37pm
Quoting scherzi
Just imagine this is not an EA, but a trader using the same strategy on two different markets: Results on GBPUSD. {image} Results on EURUSD. {image} Same configuration. Every parameter is relative to the market, no absolute values for this specific program. It should adapt to market changes. Different symbol only. It is worthless to show a balance or how was my last week or month. Doing exactly the same one loses and the other wins. The difference was the market not the quality of the strategy that was, as shown, very deficient, a ver bad EA so...
Price always does one of two thing. goes up or down. there arent' very many dojis on a daily chart. this was one of crucialpoint's infamous lines from his buried thread and we all wonder why that thread got buried....anyhow...

the only thing that really changes with different markets is volatility. Most trend trading strategies need some sort of volatility assuming one isn't trading a range bound market which i don't really see a point in for a day trader.

also day trading in the US has tax advantages vs swing trading. if you use the IRS 475 rule you can write off ALL loses vs swing trading where you aren't considered a professional trader but an investor and have to pay capital gains and do wash sales instead
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