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Why are most retail traders usually on the wrong side of the market?

  • #301
  • Apr 7, 2014 12:32pm Apr 7, 2014 12:32pm
Hmmm........ So many opinions.

As for me, I will say, traders are usually and most often than not one the wrong side of the market because the refuse to FIRST determine the market condition.
Is the market trending? If yes, Up or down? If up, only favor buys and vice versa for down. If ranging, stay out!

Doing this will save one from lots of false signals of both TA and FA.
Determine The Market Condition; then trade it!
  • #302
  • Apr 8, 2014 8:13pm Apr 8, 2014 8:13pm
All the answer here just miss the point all together. The simple fact is that someone has to be on the opposite side of your trade, plain and simple like that. The market is not fair, and we are actually the hunted in the market plain and simple, market sentiment only shows you who is getting slaughtered and how many, and you can join in that slaughter and make money or you can put you head back in the sand and pretend that most traders simple don't know how to trade.
Being a trader is lonely, but being a great trader is lonelier still
  • #303
  • Apr 9, 2014 2:48am Apr 9, 2014 2:48am
I believe they simply see where most of us have stops and so they move the price there....so it seems like most trader got it wrong...but it's not true...
  • #304
  • Sep 30, 2015 11:22am Sep 30, 2015 11:22am
Most retail traders lose because the fx market is rigged . The big banks control it. It is not and will never be a level playing field. Your odds of success are nearly zero. You would be better off going to Las Vegas. At least in Vegas, you can get some drinks and a show ( and there are some great buffets). In forex, you lose your money without even being entertained.
  • #305
  • Aug 21, 2024 4:56pm Aug 21, 2024 4:56pm
RETAIL SENTIMENT

Let's discuss, is it really that bad? Or just a conspiracy theory to confuse us? Are you able to find an edge? Show us what you have?

Quote from FREE website - https://fundamentaltrades.com/fundam...ail-sentiment/

How we use this data

The large market participants (banks and institutions) move the forex markets, and they do this by placing large orders in the markets, broken down into small parts.

The reason for this is they cannot often find large enough traders who will take the opposite side of their trade entry. Every order they place needs a participant on the other side to fill that order for them, and the movements we see intraday are caused by this activity (candlesticks going up and down). These orders are typically filled by retail participants orders being “hunted” and executed by large institutions.

It is simple to see where order liquidity sits as this is typically at highs and lows of hourly and daily levels, which is why we find price often moving to those levels and then reversing as orders are executed (support/resistance & supply/demand).

Retail traders typically lose money, and this is clearly published on brokers websites (and has to be by law in Europe), so you can see that 70-90% of retail traders lose money. They lose money because their stop orders are triggered OR they do not use a stop and their accounts get liquidated. Either way, it is BECAUSE THEY GOT THE DIRECTION WRONG!

Knowing the above information, it is clearly better to be on the other side of where retail traders think the currency pairs will go. The more orders we have in one direction, the larger the stop loss orders in the market will be, and a bigger target for large institutions to get their orders filled.

So, in simple terms, trading against the retail sentiment is the obvious thing to do. What we do not know however is where the orders are, and at what levels.

So, the WHEN the market will move against them is always an unknown factor and makes this information difficult to use on its own for directional bias. Using this
however along with the direction of the major market participants (COT data bias), and other fundamentals adds to the strength of this data.

END QUOTE

Here is an example, AUDUSD has been rising for 3-weeks, give or take, how did retail traders NOT make profits during that time? Do they simply assume retail traders are that dumb? How do they really collate this data? Have you traded this pair recently? Are you buying or selling?

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PS: I hate to start a new thread, too much responsibility, but a poll would be nice, eg. 10 people respond to the Buy / Sell question, see if it matches the graph at 90% short.
It takes a lot for me to IGNORE you, but you can try.
  • #306
  • Aug 21, 2024 5:02pm Aug 21, 2024 5:02pm
Disclosure:

This is from the Trade Explorer in my signature, Monday to Wednesday, long AUDUSD

Similar but smaller on live account.

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It takes a lot for me to IGNORE you, but you can try.
  • #307
  • Aug 21, 2024 6:14pm Aug 21, 2024 6:14pm
I usually trade bi-directionally. Am still often wrong.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #308
  • Aug 21, 2024 7:10pm Aug 21, 2024 7:10pm
Here's another one to consider, same parameters as before except a sell trade by me, with retail traders, you guys, going long.

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It takes a lot for me to IGNORE you, but you can try.
  • #309
  • Aug 21, 2024 8:19pm Aug 21, 2024 8:19pm
Quoting Erebus
RETAIL SENTIMENT Let's discuss, is it really that bad? Or just a conspiracy theory to confuse us? Are you able to find an edge? Show us what you have? Quote from FREE website - https://fundamentaltrades.com/fundam...ail-sentiment/ How we use this data The large market participants (banks and institutions) move the forex markets, and they do this by placing large orders in the markets, broken down into small parts. The reason for this is they cannot often find large enough traders who will take the opposite side of their trade...
Hi Erebus, I hope for an HONEST discussion not ARGUMENT. Let's welcome ALL views even if they are different from ours.

On the other thread, it's about trading with the TREND to make profit.

Its an old concept which we hear repeated many times.

I totally disagree with this concept and it's misleading deceiving many traders which explains why there are so many losers. To my understanding if traders don't change this "TREND" viewpoint there's no progress beyond their current standing. I'm not criticizing others nor blowing my own horn. It's time someone tell it as it is. What's traders REAL problem.

To give proper understanding to what I wrote above and why this "TREND" concept is misleading I have to demonstrate it in a chart below post.

Cheers
Know what you trade
  • #310
  • Edited Aug 22, 2024 12:18am Aug 21, 2024 8:35pm | Edited Aug 22, 2024 12:18am
First pic. EA m15 chart. For intraday trend yesterday and today. It's self explanatory. Happens everyday and intraday traders suppose to trade the "TREND" ? How ???

2nd pic. EA H1 chart For intraweek traders this week.

3rd pic. EA H4 chart. For intramonth traders this month.

Can traders see through this misleading trade the "TREND" concept that's demonstrated in these 3 charts ?


Cheers

ps. My final post sums up everything I wrote on FF.
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Know what you trade
  • #311
  • Aug 21, 2024 9:49pm Aug 21, 2024 9:49pm
Quoting BWilliam
First pic. EA m15 chart. For intraday trend yesterday and today. It's self explanatory. Happens everyday and intraday traders suppose to trade the "TREND" ? How ??? 2nd pic. EA H1 chart For intraweek traders this week. 3rd pic. EA H4 chart. For intramonth traders this month. Can traders see through this misleading trade the "TREND" concept that's demonstrated in these 3 charts ? Cheers ps. My final post sums up everything I wrote on FF.
This is your final post? I don't get it, is that my fault?

For me, it seems that you have paralysis by analysis, way too complicated, but with your experience, you should have been able to avoid this pair.

Riddle me this, if you can't figure out the trend or even the price direction, why do you want to trade that pair?

Actually, I did open a position on Monday, see the chart, took a manual exit when it wasn't working.

So, yes, I can see right through the concept you mention about misleading trends.

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It takes a lot for me to IGNORE you, but you can try.
  • #312
  • Aug 22, 2024 12:43am Aug 22, 2024 12:43am
Quoting Erebus
Here's another one to consider, same parameters as before except a sell trade by me, with retail traders, you guys, going long. {image} {image}
Hi Erebus would you please tell me which indicator do you use in bottom of your chart?
  • #313
  • Aug 22, 2024 2:14am Aug 22, 2024 2:14am
Quoting k.k
{quote} Hi Erebus would you please tell me which indicator do you use in bottom of your chart?
The black chart is Tradingview, the sub-window indicator is Moody MACD Fixed

Use that in YouTube search to find the source; it is not in the TV list of indicators.

You need the basic skill of Copy & Paste to create it using the Pine Editor.

Good Luck, EH

It takes a lot for me to IGNORE you, but you can try.
  • #314
  • Aug 22, 2024 4:47am Aug 22, 2024 4:47am
Quoting Erebus
{quote} The black chart is Tradingview, the sub-window indicator is Moody MACD Fixed Use that in YouTube search to find the source; it is not in the TV list of indicators. You need the basic skill of Copy & Paste to create it using the Pine Editor. Good Luck, EH
Thank you for being helpful.
  • #315
  • Edited 8:09am Aug 22, 2024 6:29am | Edited 8:09am
Quoting BWilliam
First pic. EA m15 chart. For intraday trend yesterday and today. It's self explanatory. Happens everyday and intraday traders suppose to trade the "TREND" ? How ??? 2nd pic. EA H1 chart For intraweek traders this week. 3rd pic. EA H4 chart. For intramonth traders this month. Can traders see through this misleading trade the "TREND" concept that's demonstrated in these 3 charts ? Cheers ps. My final post sums up everything I wrote on FF. {image} {image} {image}
Attached Image (click to enlarge)
Click to Enlarge Name: 2024-08-22 11.13.53.jpg Size: 85 KB


just try to be more humanly when posting, do not make it pointless and more ambiguous as this is a forum for sharing and learning not for mocking other traders

you could have easily said

1) Market structural shift is faulty
2) several sell BOS led to a change of market character
3)above your demarcation line expect a rejection lower and any buy break of structure is a fake breakout ,sell instead
4) simple posting like this will help others , than posting for soo many years in puzzles
5)be kind or be human it costs nothing, you may have discovered all these via a harsh way but it doesn't mean everyone has to suffer the same stress and be mocked to get a tease of it, it you don't plan to teach or share with anyone.Just keep all to yourself
6)there are several ways to win in this market , even the coin toss strategy can win in this market with a simple R:R of 1:3 and good discipline
7)meaning a trading strategy has only about 33.33% relevance for success to a trader


I'll upload a chart to make it simple for anyone to understand


please I am not here to sell anything or to become famous or interested in dealing with other traders , i am a funded trader trading for profits and making loses also , just how B'will keeps mocking and bashing traders felt unfair in my eyes so i decided to explain in plain language what he tries to talk about always in riddles and puzzles.
I like the peace and quit i enjoy remaining silent and mute for more than a decade on this website and i plan for it to remain so

Regards,
Signed
Pip Catcher

edit : the trend is bearish which is obvious from the monthly and weekly structure so stop pretending you do not see it or know it.
  • #316
  • Aug 22, 2024 5:08pm Aug 22, 2024 5:08pm
Quoting pipcatcher2
{quote} {image} even the coin toss strategy can win in this market with a simple R:R of 1:3 and good discipline 7)meaning a trading strategy has only about 33.33% relevance for success to a trader.
It is really surprising how many people actually think this way. Do you think everyone who made an EA with 1:3 R:R is sitting back, watching the money roll in.
Coin toss 1:3 RR = 25% win rate, you will eventually lose money due to trading costs.
  • #317
  • Aug 23, 2024 2:13am Aug 23, 2024 2:13am
Quoting Erebus
Here's another one to consider, same parameters as before except a sell trade by me, with retail traders, you guys, going long. {image} {image}
Good work Erebus.
Perhaps the trading habit of those retail traders being focussed on picking tops and bottoms and holding drawdowns afraid to take losses explains what you have shown. We've all done it at some point.
  • #318
  • Aug 23, 2024 2:37am Aug 23, 2024 2:37am
Quoting BWilliam
First pic. EA m15 chart. For intraday trend yesterday and today. It's self explanatory. Happens everyday and intraday traders suppose to trade the "TREND" ? How ??? 2nd pic. EA H1 chart For intraweek traders this week. 3rd pic. EA H4 chart. For intramonth traders this month. Can traders see through this misleading trade the "TREND" concept that's demonstrated in these 3 charts ? Cheers ps. My final post sums up everything I wrote on FF. {image} {image} {image}
Discussion alert!

Daily, weekly, monthly? Commercials scalping 15 min charts?
Open to close is a trend. Trend is directional. It doesn't have to be HH, LL that isn't nullified by noisy algo forces at play.
It is still a trend if a period is hgher or lower from start to end - red candle / green candle. Start to high / low. It was directional. High or low to close. Same. What is the frame being looked at? That is the question.
  • #319
  • Aug 23, 2024 2:48am Aug 23, 2024 2:48am
Quoting Davidee
... One thing I don't hear about is that most retail forex traders are on the wrong side of the market. If you look at the forex sentiment indexes published by the likes of OandA and dailyfx.com which publishes it's 'SSI' it appears that most retail for traders are almost always on the wrong side of the larger trend. Why is this? What are your ideas?...
1. Because they confuse trend with moves.
2. Because they do not understand the significance of waves, wavelength and amplitude.
3. As a result they have bad timing (wavelength) and bad money management (amplitude)
4. Most of them have a contrarian bias, but without understanding market rhythm
  • #320
  • Aug 23, 2024 3:31am Aug 23, 2024 3:31am
Quoting BubaYaga
{quote} It is really surprising how many people actually think this way. Do you think everyone who made an EA with 1:3 R:R is sitting back, watching the money roll in. Coin toss 1:3 RR = 25% win rate, you will eventually lose money due to trading costs.
https://app-sorteos.com/en/apps/flip-a-coin-online

i will indulge because i believe you are being constructive, but you need to make the test and gather some data before concluding
you will have to also define a sample size and specific time for trades ,making your experiment more concise and not of scattered random data inputs


every ea that has R:R 1:3 will trade randomly and trade different number of trades each day at different times so not fit for purpose or this assumption

i have put a website above it is for a coin toss
please i am not endorsing this as a trading strategy i use or recommending it to any one, my goal is to demonstrate that the coin toss is equal or may even be better than several strategies most of us use for trading and win rate is not as important as R:R. if you keep a R:R of 1:3 is better than having a win rate of 90% because out of a sample size of 10 trades ( win gives 1 % increase and loss gives 10% decrease ) if you win 9 trades and lose 1, u will have zero earnings at the end of the test even with a 90% win rate

but if you even you win 3 out of 10 sample inputs trades where each loss is 1 and each win is 3
your loss is 1 x 7 loses = 7% decrease and your win will be 3 wins x 3 = 9% increase leaving you with a net of 2% gain ... this is what i meant by the coin toss is even equal or may even be better than several or most of our trading strategies , meaning our trading strategy is not the issue like B'Will bashes other traders about (he can have a 90% win rate and with a poor R:R still be a losing trader) also know that some traders are very good at analyses but very poor at execution, most can see and tell what market will do but when its time to open the trade or take sl or tp or close partials they fail in execution, making them a good chart artist and a losing trader , but with all that said its all about our R:R and provided we have even a 33.33% win rate from our trading strategy we can easily earn 2% in a week on a sample size of 10 trades at specific times of low volatility from the market week after week.of course you will have some losing weeks but the statistics or probability is in your favour in the long term.

if you will conduct the test , i will be very happy because i did already. several times for fun.

sample size of 10 trades
each at a specific time of the day where there is no news preferable Asia or LD or after NY volatility has pass

SL and TP you need to consider the ADR movement of the forex pair to use but SL of 4 to TP of 12 pips will be perfect for any major pair or even gold ( 400 is to 1200)

2 trades a day at specific times each day for the entire week say 4 00 GMT and 16 00 GMT when both times have no news

if you flip the coin and it says heads you buy , if you flip the coin and it says tails you sell.


you will notice trading is not about strategy but rather more about how much we lose and gain for each trade
going back to the gallery among the masses in the shadows where i belong.

cheers
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