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long-run profits impossible with short-term trading?

  • #21
  • Aug 6, 2007 2:03pm Aug 6, 2007 2:03pm
Quoting SilverEagle
Always enter interest positive.

Can you expand on that or direct us as to where to get such relevant information?
  • #22
  • Edited 2:30pm Aug 6, 2007 2:15pm | Edited 2:30pm
Quoting bobblong
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.
This is a typical negative response from people who are used to trading equities or bonds. It is true that it is very difficult to be profitable as a stock day trader. Most of the profitable trade models in stocks are based on week, month or quarter TFs.

Forex is different. It is a market that is open continuously through the week. The volatility swings on most major currency pairs is something that is not so common in stock trading. It happens in stocks, but it's an almost daily occurence as in Forex.

You will succeed in whatever endeavor you have both the SKILL and the PASSION that matches the goal. You cannot succeed in forex by entering a trade, going off to work and then come back 10 hours later and hope you made some money. Forex is not like gardening. It's like driving a car. You gotta pay attention.

It's not the Time Frame necessarily (although I agree that trading higher TF is smarter). It's the SKILL and PASSION you bring to it that counts.



.
  • #23
  • Aug 6, 2007 2:20pm Aug 6, 2007 2:20pm
Quoting bobblong
Can you expand on that or direct us as to where to get such relevant information?
now thats the kind of thing you should really be able to find on your own if you want to learn, bob. kudzu and fxhermit made some good statements- "you gotta pay attention"

the value i see in watching intraday charts is it gives much more intimate acquaintance with price action as it unfolds much more 'quickly'—done on demo as a beginner, you can get a large number of trades under your belt that will build comfort with the platform and either confidence in your ability or a rapid dose of truth about what you still need to learn. one can also begin to sense the strength of reaction to news, etc. you wont see the whipsaws on the daily, and while that might be what youre trying to avoid, you could also miss vital clues to changes in market sentiment. i agree that 'mid term' trading has pitfalls, as it shares the weaknesses of both intraday and position trading, but theres no valid reason that an individual couldnt profit from pretty much any timeframe, just have to adapt to it whatever it might be.
  • #24
  • Aug 6, 2007 2:58pm Aug 6, 2007 2:58pm
Quoting Warper
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.

well said, and keep on doing whatever you're doing. IT'S WORKING!!!!
  • #25
  • Aug 6, 2007 3:03pm Aug 6, 2007 3:03pm
Quoting abwolf
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.

Yea they sure worked, you only went bankrupt TWICE!!!!!!.......
  • #26
  • Aug 6, 2007 3:08pm Aug 6, 2007 3:08pm
MOST OF THE MOVES IN THE FOREX MARKET HAPPEN BETWEEN 4:30 est AND 12:00 est, so knowing this valuable piece of info, is it not possible to trade intraday and be VERY SUCCESSFUL?? I SURE THINK IT IS, I SURE DO!!!


  • #27
  • Aug 6, 2007 3:12pm Aug 6, 2007 3:12pm
Quoting AmeriTrini
Yea they sure worked, you only went bankrupt TWICE!!!!!!.......

Based on that, virtually all the Market Wizards were failures too.
  • #28
  • Aug 6, 2007 3:40pm Aug 6, 2007 3:40pm
Here’s a visual to help you along, please note that the pip counts are approximations. If you were able to catch the exact bottom and held on to the very top it would net you about 2200 pips.

For purposes of illustration only!, if you could determine the bottom and tops of the intermediate moves you would double your pip count, able to call the reverses more than triple.

Now imagine dropping down in time frames and doing the exact same thing to each of the individual waves, how many pips can we possibly accumulate? Here is the intraday traders hunting ground.

Why day trade? There’s much more opportunity for profit. But each type of trade
has it’s place, positional, swing or day, depending on the size of ones account.

Fwiw,
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  • #29
  • Aug 6, 2007 3:52pm Aug 6, 2007 3:52pm
Quoting auxesis
Here’s a visual to help you along, please note that the pip counts are approximations. If you were able to catch the exact bottom and held on to the very top it would net you about 2200 pips.

For purposes of illustration only!, if you could determine the bottom and tops of the intermediate moves you would double your pip count, able to call the reverses more than triple.

Now imagine dropping down in time frames and doing the exact same thing to each of the individual waves, how many pips can we possibly accumulate? Here is the intraday traders hunting ground.

Why day trade? There’s much more opportunity for profit. But each type of trade
has it’s place, positional, swing or day, depending on the size of ones account.

Fwiw,
The critical word is "if", but somewhere in those 2200 pips are a few for you and me.


.
  • #30
  • Aug 6, 2007 4:23pm Aug 6, 2007 4:23pm
I am so glad this thread was started. Just went to read about how to determine positive/negative interest on an open trade/potential trade.. I only now realize how significant that information is.

I thank everyone for ... everything. I promise myself to "pay more attention"
  • #31
  • Aug 6, 2007 4:35pm Aug 6, 2007 4:35pm
In an attempt to answer the title of this thread, I would like to say not only yes, that it is possible to be consistently profitable using short term trading techniques. It is also possible to be consistently profitable using long term techniques, as a matter of fact, I believe that it is possible to be consistently profitable using a term of any length that you choose. The trick is to have an appropriate trading methodology that places the probabilities in your favour, remember, trading is a game of probabilities.

Unlike other professions, where there are often clearly defined routes into the profession and standards to obtain (i.e trade school & apprenticeship programs, technical schools, certification requirements, etc.), the profession of trading has very little of this kind of structure. The field of education is instead rife with self proclaimed gurus and "Holy Grail" offerings, making the layman easy prey. Is it any wonder then that the failure rate of novice traders is so high? The few avenues of education that are credible are often very difficult to identify among the froth of information. They also require commitment of time, money and intelect that many novices can not or will not provide hence they are almost doomed to fail from the start.

O.K., enough of the doom and gloom stuff. Let's ask the question - how? How does one trade short term for long term success? Well, here is some of my thinking on the subject, take it or leave it as you will....

I prefer to think of trading as a game of probabilities. As such, I want to know what kind of game it is and the conclusion that I came to is that trading is the game of studying human psychology. As traders, what we see in front of us, depicted as price action versus time (charts), is a graphic representation of collective human psychology as it pertains to a particular subject (in this case, Forex currency pairs). Learning to read those charts now becomes an exercise in learning group psychology. As with any subject matter certain truths and fundamentals will reveal themselves as learning takes place. The truths and fundamentals that I am particularly interested in are those that will give me an edge (remember, it's about probabilities) in my trading. Low and behold, the study of group reactive psychology is an ancient study and many fundamental truths have been identified and proven to occur in a consistently repetitive manner. Boy oh boy, I can now apply that knowledge to the markets simply by looking at price charts. Price charts are a graphic rather than written novel that when looked at carefully will show (and here is the key to the vault - if there is such a thing) the repetitive nature of human psychology. It is around that premise that my trading methodology is centered. Recognizing when the market is about to repeat itself and knowing how to trade accordingly tips the scales of probability in my favour. That has been my approach to date - so far so good.
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
  • #32
  • Aug 6, 2007 6:04pm Aug 6, 2007 6:04pm
I've been trading currencies nigh on four years now, and have this to offer: Long-term profits are possible with short-term trading.

To me it is a matter of discipline and perseverance. If you allow yourself to start slipping via one reason or another, yes it will eat your account like Cookie Monster on an Oreo factory, but the same thing can and does happen to people trading longer time-frames.

Even the person only looking to earn 10 pips a day on two or three currency pairs is well suited to find themselves staring down at a large bankroll, just the same as the person who only goes for those 150+ pip week long trades. As long as both of them follow their system and management plans diligently there's no reason why they both can't be successful over the long-haul.
Never underestimate the powers of the Force.
  • #33
  • Aug 6, 2007 7:36pm Aug 6, 2007 7:36pm
Quoting The Jedi

Even the person only looking to earn 10 pips a day on two or three currency pairs is well suited to find themselves staring down at a large bankroll, just the same as the person who only goes for those 150+ pip week long trades. As long as both of them follow their system and management plans diligently there's no reason why they both can't be successful over the long-haul.
I pretty well agree with you on this one, Jedi. The defining criteria is of course that not any old system will do. The system that is being used must be capable of placing as many probabilities in your favour as possible. So from my perspective, a successful system that puts the most probabilities in my favour is one that should be based on the most "predictably repetitive classic" chart patterns and price action.

I highly recommend that anyone struggling or other wise disatisfied with their trading results to make a dilligent study of price bar action and some basic top/bottom pattern formations. Those patterns are a graphic reflection of natural human group reactions. Although they repeat themselves often, rarely do they wear the same clothes to the next party, but given a little experience you will soon learn to recognize them. Even in their latest fashion wear their underlying character will still quite often reveal itself. Learn to read price action. Treat price bars as if they are words in a sentence and they will tell you the right story more often than not (there are those much wanted probabilities again). My personal approach to Forex trading is built around those principles.
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
  • #34
  • Aug 6, 2007 7:49pm Aug 6, 2007 7:49pm
awesome posts fxhermit
Relax and be happy.
  • #35
  • Aug 6, 2007 7:56pm Aug 6, 2007 7:56pm
Quoting merlin
awesome posts fxhermit
Thanks Merlin, coming from such a renowned Forex personality, I am humbled.

Merlins and Hermits......hmmmm....sounds like dangerous possibilities to me .
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
  • #36
  • Aug 6, 2007 8:27pm Aug 6, 2007 8:27pm
In answer to the question I believe the answer is yes, although the word "short term" is a very subjective one. I've traded live for over a year and have been in forex for about 2.5 years altogether, although I only really "matured" as a traded during a short 4 month period in which I was on vacation between undergraduate and graduate school so I had a chance to watch the markets and trade 24/7. No family, no responsibilities.. just charts and calendars and big bankers' comments for 4 months.

I can say from my POV, 1 HR and above timeframes can take out enough noise from the market to give a trader a decent idea of what is going on in terms of market activity. If you consider H1 and H4 to be short term and impossible to make money off, please tell your friend that some very intelligent, disciplined people are making hundreds of thousands of dollars without even being known on the market (don't look at me, I need another 6 months ).

Just look at fxhermit's sig. There's your holy grail right there, and you don't need no weekly chart!

Best,
-P
Virtue finds and chooses the mean. Aristotle, Ethica Nichomachea
  • #37
  • Aug 6, 2007 9:33pm Aug 6, 2007 9:33pm
Quoting Plutonite
In answer to the question I believe the answer is yes, although the word "short term" is a very subjective one. I've traded live for over a year and have been in forex for about 2.5 years altogether, although I only really "matured" as a traded during a short 4 month period in which I was on vacation between undergraduate and graduate school so I had a chance to watch the markets and trade 24/7. No family, no responsibilities.. just charts and calendars and big bankers' comments for 4 months.

I can say from my POV, 1 HR and above timeframes can take out enough noise from the market to give a trader a decent idea of what is going on in terms of market activity. If you consider H1 and H4 to be short term and impossible to make money off, please tell your friend that some very intelligent, disciplined people are making hundreds of thousands of dollars without even being known on the market (don't look at me, I need another 6 months ).

Just look at fxhermit's sig. There's your holy grail right there, and you don't need no weekly chart!

Best,
-P
Yeah Plutonite, you have touched on what at one time or another is probably every traders dilema. The fact that the Forex is a 24/5 market is often initially perceived as an attraction only to become more of a curse than a blessing. I don't know about anyone else but I certainly never have had the desire to turn my life into an unrealistic endurance. Physical and mental ruin and exhaustion just do not put the probabilities in my favour nor is it condusive to a lifestyle of freedom which should sort of be the intent of trading, at least thats my intent.

For myself, and from a purely opportunistic point of view (after all, I want those probabilities in my favour for a long time to come) I prefer to come to my trading room in a refreshed and relaxed manner. I look forward to the days work routine. In order to make the 24/5 characteristic of the Forex market work in my favour rather than against me I restrict my trading to the European session.

The time zone that I live in allows me to begin my Forex trading day at about 10 or 11pm. Often I am done by 2 or 3am which makes for a 3 to 5 hour work day as a trader. I generally try to approach the market from a week to week point of view, that simply means that I "keep score" on a weekly basis. I have found that this approach works for me. There is as much money to be made trading "classic" price patterns and price action as my steadily growing account can accomodate within my very conservative risk management criteria and as a bonus I get to remain human .

You see once again, I always try to stack as many of the probabilities in my favour as I possibly can. Yeah, I know, it's getting to be a bit of a mantra by now but you know what? I don't live to trade, I trade to live. There are very few professions that will allow an individual to make large sums of money in such a short, pleasant and enjoyable manner. I consider being a consistently profitable trader as a blessing indeed.
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
  • #38
  • Aug 7, 2007 1:40am Aug 7, 2007 1:40am
Very informative and insightful fxhermit. I hope that I'm not the only one learning from this thread
  • #39
  • Aug 10, 2007 4:20am Aug 10, 2007 4:20am
Now that this thread is dead I think we may have some answers.

We had replies here from several members that have been trading for extended periods of time. Some went bust and came back and some never went bust and have been doing well ever since they 'got it'.

We can now say that trading profitably in the long run is solely dependent on the individual's psychology, attitude, hard work and surely a nice chunk of intellect, regardless of time-frame, broker, or funding.

What I mean by intellect is that if you are "stupid" you will never actually transcend your own barriers or be able to pick up qualities found in the most successful traders.

I personally now have no reason to believe that there is no way to succeed by day trading or swing trading or ass trading in the long haul. Although Merlin advised I should read all 3 market wizards books to get my answer, those are still on the way.

So let us all stick to our own system and strategy, apply some introspective analysis and may we find independence, success and happiness through trading.


Bob
  • #40
  • Last Post: Aug 18, 2011 2:44am Aug 18, 2011 2:44am
Quoting abwolf
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...
Great post. Thank you!
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