Why is this unrealistic? Or is it? | Forex Factory

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Why is this unrealistic? Or is it?

  • #1
  • First Post: Apr 12, 2011 12:47am Apr 12, 2011 12:47am
I am struggling with a philosophical issue:
How come not all forex traders are rich?

Here is the thing I dont get:

Even if you havent figured out how to be profitable on your own, or even if you are pretty much clueless I am assuming the following is true, and PLEASE tell me if I am wrong on this:

Is it not true that anyone could simply join some gurus trading room and make at least 200 percent a year - roughly 10 percent per month compounded - by merely following the trade calls in said live room, day in day out? Boring stuff

IF this is true, how come people are still losing money, how come they arent RICH already?

Say Newbie Clueless hasnt got a clue about forex, but loves the idea of retiring in a few years, although he only has 100k USD. What prevents Mr. Clueless from doing that, retiring in a few years?

To put it in other words, what prevents Mr. Clueless from joining the live room, making 200 percent a year and retiring with 2.7 million dollars after just three years?

Please tell me! I have a hard time seeing how the above is unrealistic, so if I am dreaming, please wake me up!
  • #2
  • Apr 12, 2011 12:59am Apr 12, 2011 12:59am
It is simply because your premise is incorrect.
No one makes any money in forex.
Zip, nada, zero.
Reverse your hypothesis. Try it for yourself, or investigate (be aware that people lie) and you will arrive at the correct conclusion.
  • #3
  • Apr 12, 2011 2:03am Apr 12, 2011 2:03am
Quoting dice action
I am struggling with a philosophical issue:
How come not all forex traders are rich?

Here is the thing I dont get:

Even if you havent figured out how to be profitable on your own, or even if you are pretty much clueless I am assuming the following is true, and PLEASE tell me if I am wrong on this:

Is it not true that anyone could simply join some gurus trading room and make at least 200 percent a year - roughly 10 percent per month compounded - by merely following the trade calls in said live room, day in day out? Boring stuff

IF this is true,...
The unrealistic part is assuming you are going to be able to find a "guru" who can make 200% a year. I don't mean to be negative but if you find this guy then he is about to become the worlds richest man and perhaps he could teach Buffet and Soros a thing or two.
  • #4
  • Apr 12, 2011 2:18am Apr 12, 2011 2:18am
Quoting dice action
I am struggling with a philosophical issue:
How come not all forex traders are rich?

Here is the thing I dont get:

Even if you havent figured out how to be profitable on your own, or even if you are pretty much clueless I am assuming the following is true, and PLEASE tell me if I am wrong on this:

Is it not true that anyone could simply join some gurus trading room and make at least 200 percent a year - roughly 10 percent per month compounded - by merely following the trade calls in said live room, day in day out? Boring stuff

IF this is true,...
your premise is wrong. There aren't any gurus out there making 200 percent a year. Those that make that amount of return are maybe hedge fund managers. Why should they train newbies in making the same kinds of returns as he does. Even if he charged 200$ a week doing that, he would still make hundreds of millions more by running a hedge fund.

It is extremely hard to make consistent returns. You really gotta research a lot and have lots of patience.
If you wanna follow a guru, save your money and go to las vegas instead.
  • #5
  • Apr 12, 2011 2:27am Apr 12, 2011 2:27am
http://www.trading-strategies.info/T...om-Performance
  • #6
  • Apr 12, 2011 2:30am Apr 12, 2011 2:30am
Learn from trader's syndicate & market makers, not a "fake" gurus
  • #7
  • Apr 12, 2011 2:38am Apr 12, 2011 2:38am
Quoting dice action
http://www.trading-strategies.info/T...om-Performance
If it were that easy then everybody would be a millionair.

By your post count I guess you are still at a newbie stage. So, if I were you, I would just go for that trading room and crash and burn first hand. But go in with small amounts of money.
We all need to experience this crash and burn to understand that there are no gurus that can make us money, no easy road.
  • #8
  • Apr 12, 2011 2:42am Apr 12, 2011 2:42am
Quoting dice action
http://www.trading-strategies.info/T...om-Performance
If you think it is worth it why not give it a go?

But before you do... ask yourself the question - if this guy was making so much money trading forex why would he setup a sales-pitch website to get punters in basically buying his trade calls?
  • #9
  • Apr 12, 2011 2:50am Apr 12, 2011 2:50am
Are you guys saying the stats on the website are wrong?
  • #10
  • Apr 12, 2011 3:04am Apr 12, 2011 3:04am
Quoting dice action
Are you guys saying the stats on the website are wrong?
yes
  • #11
  • Apr 12, 2011 3:30am Apr 12, 2011 3:30am
And what if they arent? What does that make you? Wrong about claiming there is no easy road?
  • #12
  • Apr 12, 2011 3:31am Apr 12, 2011 3:31am
Quoting dice action
And what if they arent? What does that make you? Wrong about claiming there is no easy road?
yes, then I am wrong and you will be super rich in no time.
  • #13
  • Apr 12, 2011 3:54am Apr 12, 2011 3:54am
I have been lead to believe that trading is simple, though not easy. That profitable trading is about keeping things simple, about being consistent, about taking every trade, in order to let your edge play out and therefore be profitable, like the stuff described in the book Trading in the zone.
My take is if one is not yet at a point where you have your own system and know how to trade it and know how it works, why not just replicate someone who does, *replicating it* CONSISTENTLY?
If consistency is key, why wouldnt it work?

I thought I was correct in my impression that trying a zillion different strategies is unlikely to be profitable, but boring it out to the max with one system might?
  • #14
  • Apr 12, 2011 4:06am Apr 12, 2011 4:06am
Quoting dice action
I have been lead to believe that trading is simple, though not easy. That profitable trading is about keeping things simple, about being consistent, about taking every trade, in order to let your edge play out and therefore be profitable, like the stuff described in the book Trading in the zone.
My take is if one is not yet at a point where you have your own system and know how to trade it and know how it works, why not just replicate someone who does, *replicating it* CONSISTENTLY?
If consistency is key, why wouldnt it work?

I thought I was correct...
you have some correct thoughts in your statement: yes, profitable trading is simple, and yes you just let your edge play out over time.

The thoughts I don't agree with is replicating someone else. How do you know that he is not faking results? How do you know that this is really an edge and not just a lucky streak of random entries? How do you know that he factored in all trading costs in his figures? How do you know that the odds won't change over time?
There are also some strategies that increase pip-wise but won't increase your account overall, if you increase your position size with the temporary increase of your account. Is it one of them?

If you don't have a strategy yet, then look around, test any idea that comes across. Not with demo, not with real money, but with backtesting ideas for a really large number of trades. A backtesting software might help with that. Sooner or later you will have a small basket of ideas that work well.
It is your own responsibility to do R&D. No mentor, guru or whatever will replace proper R&D. Research leads to increasing profitability, not just emulating somebody else.
  • #15
  • Apr 12, 2011 4:47am Apr 12, 2011 4:47am
Quoting dice action
And what if they arent? What does that make you? Wrong about claiming there is no easy road?
Consider for a moment what it would mean. What are you going to invest... 10 grand? In less than six years you would be a millionaire. Do you think that is realistic or does it sound too good to be true?

And again why would this guy be charging a monthly fee to sell you this money making secret when he could be a millionaire within a few years of his own trading too?

I don't mean to be negative here but there is no easy road if there was everyone would be doing it... but if you do happen to be the first to stumble upon it then good luck to you and I hope you become a millionaire quickly but please be warned - only invest what you are ready to loose.
  • #16
  • Apr 12, 2011 5:01am Apr 12, 2011 5:01am
Quoting dice action
I have been lead to believe that trading is simple, though not easy. That profitable trading is about keeping things simple, about being consistent, about taking every trade, in order to let your edge play out and therefore be profitable, like the stuff described in the book Trading in the zone.
My take is if one is not yet at a point where you have your own system and know how to trade it and know how it works, why not just replicate someone who does, *replicating it* CONSISTENTLY?
If consistency is key, why wouldnt it work?

I thought I was...
Because you can't just replicate someone else...the reason why people can't follow someone else's system is that each trader's eyes see different things, their brains tell them different things, they are not machines that can execute fast when, and only when, they are told to. We all come with our own sense of what we want, what we can tolerate, what we think, and what we feel without realising we feel it.

For example, in my earlier days, I was taught a system, which I later found needed a huge amount of discretion to trade. I got the opportunity to sit in for a whole trading day online with a super trader who was a pretty amazing high pip trader. The day lasted 9 hours. I didn't tell anyone I was planning to take the same trades live as the super trader, the day was not for that, it was for us to see live how the system worked traded by an expert, it was the one and only time he has ever done this because he likes to concentrate when he trades (as I do when I trade). Thinking about performing for others, thinking about teaching and answering questions while you are trading is too much of a distraction. However, the day turned out to be a pretty nasty day to trade, a ranging market - the system was a trend following system - but nevertheless by the end of the day he had made twice as much as his risk...but me, I lost overall...how come? Because I found myself pulling the trigger before he did, because he announced he may take a trade here, but he was waiting for something that I couldn't see, I pulled the trigger and he decided not to, because it didn't get to the point where it looked right to him. I found I was jumping in too soon just at the hint that he liked the movement of a particular pair, whereas he was measured, patient and knew what he was looking for, and why. As I didn't have the insight he had I just saw something that looked okay and got in.

Any system, however much there are 'rules', takes a huge amount of personal judgement at entry and exit, no matter how much the system sales people will tell you that you must follow the signals automatically. It is never true, the discretion is in the super trader's subconscious, for him it is self evident you wouldn't take a trade when it looks like this or that. Trading is only simple when you have absorbed into your subconscious a lot of the rhythm of the market and how you read it. Then trading becomes simple...that takes a lot of observation and engagement with the markets in a very deliberate practised way.

So even to 'obey' trade calls you need to have mastered your own self, your own discipline. You can't be second guessing, doubting, impatient, spontaneous, terrified, etc and expect to make the same executions that the 'guru' is making when he/she is calm, patient, clear headed, practised, knowledgeable etc.

I went to a webinar over the weekend and the guy who was demonstrating his trades was a very profitable trader, nice guy and very generous with information about how he traded. But I have my own system which is profitable for me, gets me on average 5% per week, and even though both his and my trading are based on price action, they couldn't be further apart in terms of style of trading - I could see there was no way I would want to trade the way he does, so if I was a newbie listening to his trade calls I would without doubt make a loss with it. You have to find a system that speaks to you, that melds with your personality well.
  • #17
  • Apr 12, 2011 5:05am Apr 12, 2011 5:05am
Quoting Custos
you have some correct thoughts in your statement: yes, profitable trading is simple, and yes you just let your edge play out over time.

The thoughts I don't agree with is replicating someone else. How do you know that he is not faking results? How do you know that this is really an edge and not just a lucky streak of random entries? How do you know that he factored in all trading costs in his figures? How do you know that the odds won't change over time?
There are also some strategies that increase pip-wise but won't increase your account overall,...
Do you consider a 10 percent average monthly return to be unrealistic for a forex trader who is following one system?
  • #18
  • Apr 12, 2011 5:06am Apr 12, 2011 5:06am
Quoting dice action
Do you consider a 10 percent average monthly return to be unrealistic for a forex trader who is following one system?
It's unrealistic yeah, but it's still possible.
Enter Signature
  • #19
  • Edited 6:18am Apr 12, 2011 5:07am | Edited 6:18am
Quoting dice action
Do you consider a 10 percent average monthly return to be unrealistic for a forex trader who is following one system?
That is a 185% (compounded) on initial investment over a year. I think that can be achieved, if one has the right system.
  • #20
  • Apr 12, 2011 5:10am Apr 12, 2011 5:10am
Another angle.

Let's say you did follow your guru trade for trade 100% exactly. Say the guru won 6 out of 10 times. You follow along and the first 4 trades are losers and because noobs take on too much risk their account is knocked down to a point that when the 6 good trades come along you don't have enough funds to take full advantage of the wins, because your position size is smaller.

So you can't just take the same trades, you'd have to use the same risk model.
Don't wish it were easier, wish you were better. ~ Jim Rohn
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