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long-run profits impossible with short-term trading?

  • #1
  • First Post: Aug 6, 2007 11:03am Aug 6, 2007 11:03am
This question is aimed towards traders of 2+ years, profitable or not, trading with intent to make or are making a living with real money only. (hobby /demo traders need not apply) No disrespect to anybody else but your input is immaterial in regards to this question.

I had a meeting today with a person that is close to me like a family member. He's been managing funds and investments as well as investing for himself for about 799 years. We'd spoken about my recent interest in trading the currency markets.

He said to me that the short term traders meaning any trader not trading intraday but that do not hold their position for more than a few days or a week or two , always lose or break even, that they never make any money in these markets.

On the other hand he says that the long term investors that have sheer knowledge many times are very successful, provided they have the intellect and tools required for the job. He also added that day traders, armed with great discipline, strategy and tools are far more likely to make any kind of living from these markets than the short term traders trading the daily bars or 4 hour bars which according to him ALWAYS (he really stressed the always, he sounded so sure of himself) lose or break even, in the long run. Meaning that any money that is made by these traders, is purely accidental.


I'd like to hear some _honest_ responses from anyone meeting the criteria at the top of the post, please state your timeframe in your reply and how long you've been trading.. If you are comfortable it would be great to know wether you've been breaking even during this period, losing or making a living.
Please take no offense if you do not fit the criteria.


Regards to all,

Bob
  • #2
  • Aug 6, 2007 11:09am Aug 6, 2007 11:09am
Quote
He's been managing funds and investments as well as investing for himself for about 799 years
Typo surely...??!!
Carpe Divitiae
  • #3
  • Aug 6, 2007 11:10am Aug 6, 2007 11:10am
That means he is old and has been doing what he's doing for 35+ years
  • #4
  • Aug 6, 2007 11:18am Aug 6, 2007 11:18am
read ALL 3 market wizards books for the answer to your question.
Relax and be happy.
  • #5
  • Aug 6, 2007 11:19am Aug 6, 2007 11:19am
Quoting merlin
read ALL 3 market wizards books for the answer to your question.
noted
  • #6
  • Aug 6, 2007 11:29am Aug 6, 2007 11:29am
I'm sorry. You can ignore me if you want or ask someone to delete my post.

However i have a few words for your friend.... if he can't do it... ask him to quit and let the others suceed on what he failed.

And by the way... as i expected... i see a statement and not a single explanation.

Now... explain this, how can intraday traders suceed and short term don't, if intraday traders are more subject to noise, weak resistance/support and poor trend/mood analysis.

Its so obvious that the more you wait to be certain of a trade, more quality the trade has. So i dont get your friend.


Yesterday i closed my best trade so far, technically and fundamentally perfect. (Double H4 top with bad NFP) 300+ pips. Accidentally? LOL

Now regarding long term traders. The only way you can be a long term trader in forex is on carry trades, or based on the interest rate range in a country that has a cycle of going up and down.

And you can loose everything after years of trading because a simple retraction on the weekly chart that you are supposed to ignore as a long term trader, can transform in a major reversal before you know it.


So, as far as im concerned and as far as examples that ive seen i cant even know how can be possible to make profit if not on the H4 chart.

Your friend remind me one user of this forum. He says that its impossible to make 10% in the entire year. Yesterday i made 13.8% with 3% risk.

So... no one can tell you what you can do but yourself. Simple but truthful words.
  • #7
  • Edited 12:09pm Aug 6, 2007 11:35am | Edited 12:09pm
Warper, thanks for your useless input. Your reply may be useless as in regards to the question asked, but it will be an important part of the moral conclusion within 2 weeks time. I sincerely thank you.
  • #8
  • Aug 6, 2007 11:40am Aug 6, 2007 11:40am
The useless here made 13.8% yesterday. Thank you for your money.

Btw... you can trust the gurus. But let me warn you.. Those are the same gurus that teach you how to get 30 bucks in one month and then get you paying 100 for their help. hahaha
  • #9
  • Aug 6, 2007 11:42am Aug 6, 2007 11:42am
Surely you can make money out of the 4-bar or daily chart, It just needs Experience (experience = discipline + market sense + Dialist's "PPC")

I've been trading for about two years now, I've been kicked by the market many times, until I realized that I should think outside the box, it was never about the money or the timeframe used, it's about your very strong and witty character that will ensure the money flow out of the Forex.


Note: Dialist's PPC = Protect your Precious Capital... Thank you Dialist

Another Note: It's much easier on your brain to trade long-time trades, and less money for the broker also







  • #10
  • Aug 6, 2007 11:45am Aug 6, 2007 11:45am
Quoting meedo29
Surely you can make money out of the 4-bar or daily chart, It just needs Experience (experience = discipline + market sense + Dialist's "PPC")

I've been trading for about two years now, I've been kicked by the market many times, until I realized that I should think outside the box, it was never about the money or the timeframe used, it's about your very strong and witty character that will ensure the money flow out of the Forex.


Note: Dialist's PPC = Protect your Precious Capital... Thank you Dialist

Another Note: It's much easier on your brain to trade long-time trades, and less money for the broker also



Noted, thank you.
  • #11
  • Aug 6, 2007 11:55am Aug 6, 2007 11:55am
Ok, here it goes.... Ive never been one to comment in these forums, but i enjoy reading some of the entries..

I have been trading commodity futures, options, stocks for over fifteen years. I got involved in the forex business about a year ago. I have literally run through all the pitfalls that trading has to offer.. Ive been making a living trading for over ten years.. I guess I consider myself a professional. Over the years I have made a lot of money and I have gone bankrupt twice.. So, I feel I can comment on some of the issues that arise in this forum.

Here are some concepts to think about...

1. short term / intraday trading does not work.. I have found that forex markets trend fairly well.The only way to really catch trends is through trading daily and weekly charts. Intraday trading is a scam perpetuated by brokerage companies to generate commissions.

2. Use a simple mechanical trend following system that provides:
a. Trend indicator
b. Money Management stops
c. trailing stops that move with the trend (this allows you take profits)

This allows a trader to "cut losses and let profits run".. a primary ingredient for successful investing.

3. Trading is about probability not certainity.. Dont try and predict the market direction... just focus on money management and playing good defense.

ABWOLF
  • #12
  • Aug 6, 2007 11:58am Aug 6, 2007 11:58am
Quoting abwolf
Ok, here it goes....
ABWOLF
Most definitely noted.

P.s everyone reading, do not worry there will be a moral concluded in this thread when the replies stop coming in.
  • #13
  • Aug 6, 2007 12:07pm Aug 6, 2007 12:07pm
Quoting abwolf
1. short term / intraday trading does not work..
May i ask, do you know the difference between trading the H4 chart and using it just as entry "tuning".

I trade daily charts and i'm a "buy the rumor, sell the fact" kind of trader.

You say that trading below daily chart is a scam for commission hunting...

..But in my case i may wait more than a week if i have too, before i enter.

So what are you talking about? 3 or 4 pips spread when i can win 100.

I dont mean to disrespect but if 95% of traders fail, why does the ppl that trade for years and fail, say that their word are the holy grail?



PS: I dont care if im not welcome in this thread, but why are ppl leaving their posts without any single constructive explanation? ... Sad..
  • #14
  • Aug 6, 2007 12:18pm Aug 6, 2007 12:18pm
Quoting Warper
May i ask, do you know the difference between trading the H4 chart and using it just as entry "tuning".

I trade daily charts and i'm a "buy the rumor, sell the fact" kind of trader.

You say that trading below daily chart is a scam for commission hunting...

..But in my case i wait more than a week if i have too, before i enter.

So what are you talking about? 3 or 4 pips spread when i can win 100.

I dont mean to disrespect but if 95% of traders fail, why the ppl that trade for years and fail, say that their word are the holy grail?
Im sorry.. I dont understand some of your points.. Im not saying my opinions are the "holy Grail". What i am saying is.. I have a fair amount of experience trading markets and these techniques have worked for me over the years.
  • #15
  • Aug 6, 2007 12:23pm Aug 6, 2007 12:23pm
Quoting abwolf
.... I have a fair amount of experience trading markets .....
Warper I hope this clarifies some things for you. Making 13.8% or 50% or 100% in one trade means zip. The true test is over an extended period of time
  • #16
  • Edited 3:58pm Aug 6, 2007 12:47pm | Edited 3:58pm
bobblong..

..i didnt started trading yesterday to ignore that, however... that trade i mentioned had a thousand of motives to happen. I risk to say that, it was a 100% probability trade, and thats the kind of trades that i wait, whatever i have to wait.

I used to trade on hourly charts and i jumped to H4 based on observations, studies and testing.... not by chance... and then i improved to a new record, what do you expect me to think, that i'm going wrong?

One thing i know....

I read one time in this forum, that the average "life expectancy" for a new trader on forex is 2 months before he goes to zero balance.

I beat that odd (i can prove it)... so i have trouble to believe in "experience" instead of my results based on hard work and self control.



PS: I was asked to leave this thread because of my "lack of experience"...

I will respect that... but believe me, in my life i do prefer hear from ppl with results and intelligence instead of everyone that trades for years with no capacity. Go ahead..
  • #17
  • Aug 6, 2007 12:54pm Aug 6, 2007 12:54pm
Fair enough, now let other traders reply to post #1

p.s the average "life expectancy" for a new trader on forex is 2 months (these are the odds you wanted to hear that you had beaten)
  • #18
  • Aug 6, 2007 1:13pm Aug 6, 2007 1:13pm
Your family member is right. You should not trade the forex market on short term trades.

I've been trading for 2 years. I lost all my money before the 2 month period. I lost it all in 2-3 weeks if I remember correctly. I was trading the tick chart on FXCM.

I still have my day job and going to back to school to learn and gain the intellect required to trade long term.
  • #19
  • Aug 6, 2007 1:28pm Aug 6, 2007 1:28pm
Quoting bobblong
Fair enough, now let other traders reply to post #1

p.s the average "life expectancy" for a new trader on forex is 2 months (these are the odds you wanted to hear that you had beaten)
Although the above quote may be true, the same holds true for many other professions. How many failed doctors, lawyers, mechanics, artists, bakers, candlestick makers, etc. are there out there. PLENTY! The only difference between them and Forex traders is that they may carry on their folly a bit longer before they come to their senses and realize they are in an profession that is unsuitable for them. In Forex it is more cut and dry - loose money, blow your account and your out of the game.

Many novice traders do not realize that Forex trading is a serious profession and business and needs to be treated as such. They are attracted to the "get rich quick" foolish mentality that pervades the entry level hype surrounding this profession. Most want to believe that in a very short time, with very little knowledge or experience, they can make piles of money. With that sort of attitude in any other profession they would be just as incompetent as they are in trading.

I have been successfully trading stocks and commodities for well over a decade now and Forex for over four years. Yes, trading is a game of probabilities and as such one needs to be cognizant of both timing and the timeframes that give the best probability for CONSISTENT success. Ultimately the moves that the markets make are irrelevant to any particular timeframe (the market just doesn't care if you are watching daily, 4 hour or tick by tick). Timeframes are only relevant to you as a trader to give you that probability edge. In other words, it is your methodology that determines your success or failure and not the timeframe within which it is applied.
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
  • #20
  • Aug 6, 2007 1:56pm Aug 6, 2007 1:56pm
Been doing it for more than 5 years. Tried tons of things. It ONLY started to work when I started trading the daily chart and for long term. Always enter interest positive. And don't aim for more than 20% (maybe40%) per year since my experience taught me that it is imossible - on the long run .

We all want to escape the workplace, the bickering with the boss and colleagues etc etc so everyone is in a hurry and this is just why everybody flushes down the toilet so quickly (like me at first) in forex.

Oh, and I have too doubled my account 2-3 times in a few weeks. As I said THE LONG TERM is the problem.

We all hate to hear the truth if it is against our dreams - me too! But...

One more thing! Don't waist your time watching those 15 sec charts all day! Go biking, be with your loved ones, get an education(!!!) , chose a new workplace where it is possible "to survive" that 5-10 years until you can live off from -long term- forex.

The damn proble here is that everybody sees forex as the only way out and a quick solution so many put everything on the back burner (family, education, hobbies). But it doesn't work that way.

One more thing: Whatever you gain or lose it last only for 50-60-90 years after that you give your soul back to the Creator. So don't collect treasures for this earth only but think of the other side! Be good - try to be, at least - that's what matters.
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