The Art of Forex

In the past few weeks I have spent a lot of time reading a lot of the threads on this board, and let me tell you there are some really great systems and approaches discussed here by some very knowledgeable people and most of them can make money. What happens though with most people is that they seem to chase after the latest and greatest trading strategy, do not take the time to really hone 1 or prefferably 2 systems, focus on too many pairs, and do not want to put in the time to really learn; if it can not be turned into an ea they don't want to invest the time into it.

Well the truth is if you are going to make money doing this you have to put in the time to thoroughly research and hone your system - make it your own, in fact my strategies combine a couple of different strategies and they work for me, not sure they would work for anyone else at this point because so much of this relies on the trader and NOT on the system.

Demo Trading: great for testing a strategy, lousy as a benchmark for trading success. If you really want to figure out if you can make money as a trader trade a micro/mini account and after you gain some real confidence in yourself and your system then put some real money behind it. Demo trading does not build real confidence in yourself, because in many cases that is what we are really dealing with.

I couldn't agree more.

In my short experience in Forex, I've come to the conclusion that, while there are several successful and helpful people in this business, most of the "traders" posting in forums will never be successful for various reasons.

For one thing, they blame everything on their broker, even when it's obvious that it's there own fault.

They refuse to follow the advice of experienced traders (how many times do newbies have to be told to NOT trade the news?) and, instead, complain that they couldn't get out of their trade when the news spiked 150 pips. Duh.

And, they are so fixated on EA's that they don't even learn to trade properly. I would never allow any software to control my finances like that. Computers are a helper, and EA's can be, too. But, why would anyone allow a piece of code to control whether they make or lose their money?

All most of these "traders" want is something (or someone) to do the work for them. That's not trading, that's laziness (witness the number of times that people ask the same question over and over without bothering to take the time to search for the answer first. They want someone to GIVE it to them, rather than working for it and learning from the experience).

What you mention about jumping from one system to another is also true. I did that myself when I first looked at Forex. Finally, I realized that I needed to understand HOW to trade first, then find something that I was comfortable with using and was consistently successful. Once I came to that realization (which has only been very recently ), I was able to focus on actually trading instead of looking at charts jumbled with multiple indicators. I think that I'm now finally able to test my strategy properly.

One thing that I have learned is to concentrate on one or two pairs at most. Learn how they move, their idiosyncrasies, so that I can use that to my advantage. Unfortunately, most people don't do that. Instead, they trade every currency under the sun (including some that most brokers don't even offer), and sit at their computer all day trying to make 5-10 pips at a time. I saw a post by one person who was trading 16 different pairs! How can you possible get the feel for any of them like that?

As for demos and micro accounts, I used to think differently, but now have to agree with you there, too. Demos are great for getting a feel for how the market works, becoming familiar with placing various order types, testing and refining a strategy. But, the live account is TOTALLY different in many ways, not the least of which is the fear I experienced watching the charts go against me when my own money was involved.

I also used to think that micro accounts were a waste of time. I mean, ten cents a pip? Come on! Now, I can see the benefit, as I can hone my strategy on a live account (fear and all) and limit my losses to small amounts that won't break me completely. Plus, I still get the exhilaration when I win!

It's unfortunate that most people have decided to remain amateurs in this business of Forex, looking for the "perfect system" so they can run their EA on 20 pairs during the news, and then blame their broker for their failures. The few professionals that frequent these forums are a breath of fresh air and give hope to those of us who listen to their advice and learn from their experience so that we, too, can become professional Forex traders.

Terry

Yup, heard it many times..."What a great system! Is anyone going to make an EA out of it?!" Everyone is looking to make an easy $ or 2.

Now, there are some people who simply do not have the time to monitor charts, even on a 4hr time frame. They might be able to cruise through a daily but, "How can you trade the daily? Your stops have to be huge!" This is where you have to start thinking of your own strategy to suit your chart time. FX options are a great way to put the daily time frame in reach.

There's something for everyone....

Peace

Sorry to hear about your loss.

I have always been a gambling fan, no addiction though or regular play. In fact I studied gambling and found a lot of connections between leveraged markets, like forex, options, futures, etc... and gambling...Expectancy is -ve in 95% of the cases and you really can't keep winning or keep what you won for long periods of time simply because odds are against you...

I play Blackjack irregularly. One need to fill in the need of gambling. Blackjack is one of the very few games where you can have a positive expectancy and actually beat the house in the long term given certain conditions. The dealer must not be cheating. The decks must be clean and complete. No auto shuffling machines used. You have to blindly follow a strict strategy (which actually help increase your odds and reduce the dealers odds) and money management (betting size) rules, etc...

With all those conditions, the expectancy is not a huge one in your favor, however, it's good enough to make you win in the long run.

Why I am putting leveraged markets like Blackjack is because they are very much alike in many ways. You will have to follow a strict strategy as well as strict money management rules. The game must be fair with nobody cheating or playing games.

Finding the right strategy is something and following it is another thing. In Blackjack, I used to lose 6 or 7 hands in a row, yet I would have played the 8th exactly the same way the strategy says to. Winners and losers are simply randomly distributed and you will have to believe in this.

You can't win every hand against the dealer my friend. It just doesn't work like that.

Happy Trading...

Regards

The problem with people is they think trading forex and trading stocks are same... They might look same but the volatility of markets are totally different.. Trading with a software.. duh... that would be the craziest idea ever... after all its my money online.. i cant give the responsibility to a software.. In these i have learnt to read the charts and do some technical analysis... i dont invest lots of money and my profits are very low compared to my colleagues.. but i am playing safe.. i prefer to be a professional and not a gambler...