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It seems impossible to make money in the long run

  • #21
  • Dec 28, 2014 5:54am Dec 28, 2014 5:54am
Quoting CrucialPoint
How to find the GEMS in ForexFactory and sift through all the B***S*** Lets open with a joke: Question: How many Geniuses work at FF? Answer: None. Because they still don't know how to solve a simple "member ranking" system ================================== I hardly read stuff here and any other Forex forum... because let's be honest, 97% of the posts at FF are rubbish. Then I see genuine people seeking help, only to be served by Bullsh*t artists, behind their hidden agenda. (Firstly, don't contact me because I won't contact you...
The most important thing you forgot.
FF is just a forum. And for the operator only counts traffic.
Unfortunately BS artists bring the most traffic, because they need confirmation of their ego.
  • #22
  • Edited 6:53am Dec 28, 2014 5:59am | Edited 6:53am
Hi all.
I will share my trading strategy. It's hard to say which one is good between scalping or long TF run. With me, i have family with 3 kids, and i can't sitting at computer for long time every day. So i have to arrange my trading and my life.

Keep in your mind:
- Novice traders: buy or sell.
- Professional traders: trade or do nothing.

For Forex and Commodities market:
The most my main trend is W1, to know the direction of the market. Weekly frame helps me easy to see how far current price between Low and High of historical data. When i know the trend, i go down time frame D1 and just waiting for the day i can jump in, i need to be patient.

In the time frame D1, i use only one 20 SMA and candlesticks pattern to pick the day i will entry the trade. This time i make my plan what price i jump in and stop loss. So i scan the market every night before go to sleep. If i don't see signal, forget it tomorrow. If the signal appear, ok loaded my gun and get ready for next hunting day.

Suppose next day is the day i will trade, i go down TF 5 minutes to get best opportunity. In this TF, i don't use any indicators, just naked chart, focus on price action and patterns, then place the order, then... that's it.

This strategy for long run.

For daytrading:
I trade ES-500 every day but from 10:00 to 12:00 CST. I don't set target profits, just get as i can.

PS: If who is daytrading e-mini S&P 500 or other Index, don't trade at market open (if you're sure the market will move, ok you trade). The best time to trade is from 10:00-11:30 CST (sometimes to 12:00), and 30 minutes before market close. Why? because Big Boys always take action in these time. If you asked who is the Big Boys ? The Big Boy who has at least $30M in trading account. These people can push the market move.
BullShit BearShit
  • #23
  • Dec 28, 2014 6:47am Dec 28, 2014 6:47am
Quote
The same applies in forex, which is pretty random on the short term (the shorter the time period, the more random it is).

I disagree. Noise is more important on the short-term (newsflow, open/close session, hours) but "noise" isn't randomness, it's just a market's behavior.

Quote
"If you enter a trade with a risk/reward ratio of 2, you win 2 times as much when you win than when you loose. But you have 66.66% chances to loose and only 33.33% chances to win.
So, it's in fact quite the same, as you will win more but less often."

I agree.


Quote
You can think of the roulette game in a casino: Betting on a 50% chances thing, like BLACK or RED gets you 2 times your money. Betting on a 33.33% chances thing gets you 3 times your money. etc...

Yes but trading isn't casino. The winrate is just a point of view. For example if you're a real estate agent you're visiting a house with 10 peoples but only one of them is about to buy your thing. Your winrate is less than 10%. What I want to say is that it's a mistake to make a correlation between FX and casino just because of the winrate.


Quote
​Now, I explained all this, because it's the exact same with forex, due to the SPREAD (+ the commission if there is any). The spread is lowering your odds to win when you enter a trade. So your odds are not 50% but lower, and where it becomes really interesting is that the smaller the TP and SL are, the higher the spread is proportionnally.

You're right.


Quote
If you enter a trade with the goal of taking profit (or getting out at a loss) less than 18 times the spread (+ commission if any), you have LESS chances to win than by betting on RED or BLACK at a roulette in a casino. For example, with a spread of 0.6 pips on EUR/USD, which is pretty good, if you want to get less than 10.8 pips, your odds are worse than at the roulette.

As I said, that's the problem to link FX and casino. Are you going to say that the real estate business is more random than casino? Odds are just a point of view.

What about a winrate of 60% and an average R:R 1.25?

Quote
Combine the 2 things: That you more you try, the more you get closer to the theorical stats, and how the spread is somehow rigging your odds, it's mathematically almost impossible to SCALP successfully on the long run.

Yes you're perfectly right. Spreads and fees are killer. On the other hand the only successfull traders I know who trading for a living are scalpers (on Futures).
  • #24
  • Dec 28, 2014 6:48am Dec 28, 2014 6:48am
Quoting Thx
{quote} Here's a (day trading) study from Stock market perspective http://traderfeed.blogspot.com/2014/...-actually.html "In the average year, 360,000 individuals engage in day trading. While about 13% earn profits net of fees in the typical year, the results of our analysis suggest that less than 1% of day traders (less than 1,000 out of 360,000) are able to outperform consistently." (p. 15). so, i think it safe to assume that, after 15+ years period the (stock) daytraders survival rate drop to less than...

Thank you.
  • #25
  • Dec 28, 2014 8:13am Dec 28, 2014 8:13am
Quoting Unabletrader
I disagree. Noise is more important on the short-term (newsflow, open/close session, hours) but "noise" isn't randomness, it's just a market's behavior
I was expecting this kind of reaction.
I even wanted to write something about it in the first place, but didn't.
There are plenty of studies saying that financial markets are random. After, it's studies, you give them credit or not. I mean there tons of fu*k!ng nonsens studies out there about every subject possible.

When I was a beginner, I guess I was like you: I was believing in the "logic" of the markets, and that by correctly understanding what's going on, the news, etc.. You could be able to somehow understand it and follow/anticipate it. Now that I'm seeing myself as a more experienced trader, I more believe markets ARE random on the short term (maybe even medium term)

But random or not, the point is that the odds are more against you when you target SMALL trades.
To calculate odds, you take the hypothesis that they are random and you have 50% chances to win and 50% chances to loose. After, you may believe they are not random, that's not the problem.

Quote
Yes but trading isn't casino.

I totally understand what you think.
My view on that changed with enough experience.(at least on the short term).

But again, it's not really the point.

Quote
winrate is just a point of view. For example if you're a real estate agent you're visiting a house with 10 peoples but only one of them is about to buy your thing. Your winrate is less than 10%.

A real estate agent, or any other business is less a purely statistic thing.
And if a real estate agent "only" sell his time, he has a potential to earn money (when he finds the customer that buys), but doesn't loose when it doesn't work. That's the case with most jobs: You win or you don't win (but without loosing, or loosing too much).

With financiak markets, you may not win despite all the time and efforts, but loose money on top of that.
And the point of the ODDS part is that when you enter a basic trade (buy or sell), your chances to loose x are greater than to win x (same +costs) + loss of time.

The average or expected winrate has some benefits: If a real estate has costs for the visits, for example the fuel used by his car to go search the customer and make the visit. If the cost of a visit is greater than 10% of the expected profit, it's not worth to do that visit logically. That's where odds are useful.

Quote
What I want to say is that it's a mistake to make a correlation between FX and casino just because of the winrate.

Let me respectfully correct you: "It's YOUR opinion that it's a mistake".
It's my opinion that you're making a mistake by thinking this.

Quote
Odds are just a point of view.
Odds are what they are: Odds !
Would you bet some money on the fact you are going to succeed to make more than 90 times a 6 by rolling a dice 100 times ? I would bet against you. You probably wouldn't because it seems unrealistic to you according to the ... odds. But people are taking such bet by scalping or by having unrealistic goals when you read a lot of threads here, just because they don't perceive correctly those odds.

Now it all depends of the RR of the bet: If it costs you $1 with a profit of $100 millions if you succeed, it would be a good bet.

Quote
What about a winrate of 60% and an average R:R 1.25?

Anything WINRATE x (R:R +1) > 1 is WINNING (the +1 is for the initial bet)
0.6 x (1.25 +1) = 1.35

If you manage to do that on average, you will win 35% on average. Period.
The problem is that it is very hard to get a result greater than 1 on this. Because if you just admit one moment for the thinking that the outcomes may be random (win or loss), the results are UNDER 1 for random results because of the costs. So you already have to be more right than wrong to cover this costs, and then you may win.

And all my demonstration of before is that this costs are far too important if you try to scalp. That's what you have to understand, I guess.

Let's say you have a spread of 0.6. And you target 3 pips, what an aggressive scalper would do.
If you only adjust the RR, you loose 3.6 pips on one side when winning 3 on the other side. You now have a RR of 0.83. With a theorical winrate of 50%, you now have:
0.5 x (0.83 +1) = 0.9166 meaning you're lossing 8.33% on average.

If you keep a RR of 1 and adjust the winrate according to the spread, you would only get a winrate of 45.83% which means that if you take the hypothesis that market are random the expected winrate of the bet is only 45.83%.

The thing is that to just break even, with this spread of 0.6, you have to be right at least 54.17% of the time instead of 50%. That's what odds tell you.
You would get closer to need only 50% to break even by targetting larger profits (to average the costs).
  • #26
  • Dec 28, 2014 8:47am Dec 28, 2014 8:47am
Quoting Unabletrader
I've been using a successful scalping trading for 6 weeks now. I've taken more than 50 trades in several markets conditions (huge volatility, poor volat, balanced, imbalanced, newsflow, risk aversion). Today I decide to backtest manually and I've just figured out that it's not as profitable as it looks. To tell the truth I'm suprised. I was thinking 80 trades was enough to prove or not the validity of a system but I was wrong. Is anyone here may show a successful trading explorer for years or several months? (Excuse my poor english)
The sad reality is that no one should have expectations of being profitable in the LONG TERM. I believe that having that expectation is not only realistic, but as humans it is very hard to be consistent. Many people claim to have the forex hack, but you are given more excuses as to why they don't show their results compared to why their accounts actually fail. The currency market isn't meant to be invested in, as one news, or current event can move a currency or an economy for months or years, thus making your lots almost worthless. Some try to compensate by using low leverage, as because the market is "cyclical" the trade will end up coming back to them, but look at the time which was lost holding that losing position. I for one believe that long term trading is not achievable because mot people swing trade, and swing trading is simply an "educated guess" or BIAS GUESS, as to what the market will do. The second the trade goes against you, then your brain, and even mentors say.... SHORT SQUEEZE,STOP HUNT, OVER OUGHT, OVER SOLD, MANIPULATION, ETC which are all excuses for you to hold what will more then likely become a big loser. Being profitable in the long term starts with the type of person you are, and ends with the system you are using. If you are trading support and resistance, or any of those magic indicators you won't make it more then 1 year before having to redeposit.
  • #27
  • Dec 28, 2014 8:57am Dec 28, 2014 8:57am
Quoting Unabletrader
{quote} I disagree. Noise is more important on the short-term (newsflow, open/close session, hours) but "noise" isn't randomness, it's just a market's behavior. {quote} I agree. {quote} Yes but trading isn't casino. The winrate is just a point of view. For example if you're a real estate agent you're visiting a house with 10 peoples but only one of them is about to buy your thing. Your winrate is less than 10%. What I want to say is that it's a mistake to make a correlation between FX and casino just because of the winrate. {quote} You're...
I have never understood why people talk about the spreads and fees as being a KILLER when you scalp. No matter how much you trade or you scalp the reality you will always have fees, and commissions, but those are very small parts of the actually trade you are placing. If the broker takes in commissions and spread about 1.2 pips in total, what is the issue with that. A scalper on avg may aim for 10 pips, and although the broker would be taking 1 pip, the reality is that is taking off the TOP, and not from the closed position. Another thing people talk about the R:R Your EXPECTED R:R is only your pipe dream of what you THINK the trade will do, but once you are in the trade, your ACTUAL R:R is what matters. That will determine the accuracy of your trade, and your efficiency to be able to handle your profit or loss. So many trades have what would be deemed excellent R:R, but when they end up closing the position they have an actual R:R of 1 : . 9 And if the person is a bias trader, the next trade will be a revenge trade which will make the R:R (Actual) even worse. On paper trading is a science, and you see it with all the educated post of numbers, and formulas, etc. Yet, why can't the same creators of the post use all those maths to make money even in the short term in forex. The answer is because numbers has no biasm humans on the other hand do!
  • #28
  • Dec 28, 2014 9:38am Dec 28, 2014 9:38am
I don't think it's impossible to "make money" in FX - but, the expectations have to be realistic as well.

A few opinions of my own:

- If you think FX is a place where you can reliably pitch in $100 or $1000 and see it become millions quickly, this isn't the market for you.

- I don't think this market is one that causes explosive growth, I think exposure to the FX market is a realistic place to achieve continuing growth. If you run a profitable business outside of trading or you're profitable in a different market (stocks, options, futures, etc..) exposing some of those profits to FX for continued growth is a valid method IMO. Inch by Inch is a cinch, mile by mile is a trial and so many here are looking to cover miles with no clue of what it takes to achieve the inches first.

- If you want to succeed in this market, you have to consider the "interest" of those you're learning from. What is the best way for a broker to make money? It's for you to lose as many trades as possible. Therefore, if you need traders to lose, what will you teach them? How to win consistently or how to lose consistently?

- If you want to scalp that's fine, when you do, you have to recognize context of the price range a pair is in. In a range of multi year lows or highs? Well, why long at a high of a multi year range and why short at the low of a multi year range? (Many might laugh at the simplicity, but many more lose by failing to recognize it..)

- On the money management side of the house it still shocks me how many traders have zero or close to zero of a clue how entering a trade impacts their account and how much room they do or don't have for the trade to develop in their favor or cause a margin call. This intelligence is VERY important to being a consistent winner.
"Holy Grail" exists - accepting where is the first step.
  • #29
  • Dec 28, 2014 10:40am Dec 28, 2014 10:40am
Quote
But random or not, the point is that the odds are more against you when you target SMALL trades.
To calculate odds, you take the hypothesis that they are random and you have 50% chances to win and 50% chances to loose. After, you may believe they are not random, that's not the problem.
​


Martets aren't random because you could predict them if you have the informations (which is impossible) but it doesn't mean they are randoms. In your point of view, markets are random because you and I can't predict them. Are mathematics random if someone isn't able to calculate 2+2? I don't think so. Price is the result of supply and demand, it doesn't appear from nothing.

As a business transaction, a war, you can't be sure about the end because you don't have the whole picture (that's why governments spend several billions in their spy agencies).

Then you say that Short-Term is more random than Long-term which isn't true again. I can say that everyday at the EU open, US open and even Asia Open, volatility increases. What I'm trying to say is that you can take advantage of short-term patterns.

For example I just use a short-term patterns. How could they be "more random" on the short-term thant the long-term if they just exist on the short-term?


Quote
A real estate agent, or any other business is less a purely statistic thing.
And if a real estate agent "only" sell his time, he has a potential to earn money (when he ys), but doesn't loose when it doesn't work. That's the case with most jobs: You win or you don't win (but without loosing, or loosing too muchfinds the customer that bu).


You're wrong. If an agent doesn't sell, he loses money (fuel for the car, business lunch) and most important he loses time. If he isn't an independent agent his boss will lose money by paying him for his hours despite his employee hasn't sell anything.

Every business is a purely statistic thing. One guy sells an house for 10 opportunities, is that fine for you or not (as a boss)?


Quote
If you manage to do that on average, you will win 35% on average. Period.
The problem is that it is very hard to get a result greater than 1 on this. Because if you just admit one moment for the thinking that the outcomes may be random (win or loss), the results are UNDER 1 for random results because of the costs. So you already have to be more right than wrong to cover this costs, and then you may win.

And all my demonstration of before is that this costs are far too important if you try to scalp. That's what you have to understand, I guess.


What I want to mean when I'm saying odds are just a point of view is that you're making assumptions on a theorical base.

Would you prefer having a short-term strategy who gives you a PF > 1, so a profitable strategy or having a long-term system with PF < 1? Because that's the thing at the end of the day.

When you say that short-term is more random: I disagree because you may know volatility is about to increase or decrease. You can know if Long-term traders are trading by observing the range of the value area. Is it to possible to take advantage of that? Who knows.

That's why I'm very careful with that way of thinking: if you have spotted a little short-term pattern which can exist only on short-term (for example a session opening pattern) it will always better than a long-term system.
  • #30
  • Dec 28, 2014 10:57am Dec 28, 2014 10:57am
Quote
I have never understood why people talk about the spreads and fees as being a KILLER when you scalp. No matter how much you trade or you scalp the reality you will always have fees, and commissions


When you scalp, fees nd spreads represent a different amount thant when you're a swing trader.

on EURUSD, I scalp with a global spread of 1: spread 0.2 + commission 8 dollars/lot.

My average TP is 7,4. So I pay about more than 10% of my return to make money which is huge.

If I were a well-capitlazed trader making huge volume traded per month, I could reach a global spread of 0.5. 0.2+commission 3 dollars/lot

With a global spread of 0.5 I could aim 3.7 pips and I will be still paying 13% of my return. It's very important.
  • #31
  • Dec 28, 2014 10:59am Dec 28, 2014 10:59am
I don't think those statistics is right here, which formula or theory is that? I can tell you all pairs is related to each others pair even precious metals right? So a pair will be like this
Y=ax1+bx2+cx3....
With a is the news,b is the momentum,c..... A lot of factors to determine a pair is going up or down and how much at a moment. And a,b,c change frequently. You can't apply a percentage to a trader and say 50% chance to win or something, a experienced trader can understand the news and feel the market so he enters the market when it's going up with high chance to have profit maybe 90%? It's based on his strategy and how risky he takes.
I really don't know the definition of scalper I'm just sell when it's profit, and make sure i have profit for today and go to sleep. No one want to waste time to trade if they don't have profit, so if some day i lost and i see I can't make money by trading so just stop it and find something else to to. It's really simple!
  • #32
  • Dec 28, 2014 11:01am Dec 28, 2014 11:01am
in short, it's not the matter if you are a long term trader or scalper, it's the time when you enter the market matter!
  • #33
  • Dec 28, 2014 11:20am Dec 28, 2014 11:20am
When I read the posts, I laughed. There are no right or wrong to the arguments, just depend how you perceive it. Similarly, to how the price move up or down.

Remember:
- All winners have the same mental thoughts despite different trading systems.
- Who care if you are a good/bad trader, smart/silly trader, popular/unpopular trader, but what I care is about being a long term net profitable trader, who make enough to buy my own beer. So high risk or low risk, short term or long term, $1 or $10000 profit, it doesn't matter as long, capital is still intact, profit are make.

Rather than spent time debating, why not spend time figuring out why winners are winners?...

Good luck and enjoy the upcoming new year!
The only winner is the one who survive the longest...
  • #34
  • Edited 11:55am Dec 28, 2014 11:38am | Edited 11:55am
Unable trader, I don't really get it.

First you focus on the "are the market RANDOM or not" ? how many time have I said it doesn't matter, let's say they aren't. If you want.
(about having the information, you don't have it and won't have it)
You can even argue that absolutely nothing is random in life and can support this pretty well.

So you started a thread named "it seems almost impossible to make money in the long run", then you keep on telling me "You're wrong." instead of at least saying you think I'm wrong or in your opinion I'm wrong or you disagree, then you state that "Every business is a purely statistic thing", but at the same time don't want to see the statistic part of forex trading.

The whole and only point of my intervention was to try to point out that successfully scalping market on the long run is a statistically unlikely thing and why.

Now if you know better, and don't want to try to think about things, why did you start this thread for ?
You're basically explaining why you are right, why your system works, and so on. Fine, so there's no problem, you will make a ton of money scalping and your only mistake was to start this thread. Right ?


Quote
What I want to mean when I'm saying odds are just a point of view is that you're making assumptions on a theorical base.

Statistic IS a theorical thing.
It's no magic, but it sure helps.
And as I said and wrote example about, on the LONG RUN, stats usually win.

[EDIT] Kinspk: A clever post.
  • #35
  • Dec 28, 2014 12:21pm Dec 28, 2014 12:21pm
Quoting kinspk
Rather than spent time debating, why not spend time figuring out why winners are winners?... Good luck and enjoy the upcoming new year!
...novel concept that would certainly reduce the number of posts here on the factory
"Holy Grail" exists - accepting where is the first step.
  • #36
  • Dec 28, 2014 12:38pm Dec 28, 2014 12:38pm
About 5 banks control more than 50 % of the forex volume traded...you can google the exact figures.
They trade for their own pockets, with robots created by the best engineers,...and massive $.
Add to that insider information, as to where orders are sitting ...
Manipulation, by means of massive orders to reach and hit the so called...."Liquidity pools", (retail orders in form of stops), sitting on the obvious places get cleared on a constant basis...creating a regular transfer of $, from retail pockets to these Big Players.
Markets move on a constant balance between these ....(forex, commodities, stocks...all the same soop)....actually the balance happens, once the retail money getīs absorbed and the market runs in the desired direction of the big players...
There is no such thing as fundamentals...ask any "news trader...."ask the robot if it cares about the "fundamental story" of any stock....
Try this: open any chart with any software that has a "training mode"....play it back in time, and move it forward...as you do...look for the places where you could imagine stops are sitting...scroll forward, and watch the hands of the Big Boys in action....(pretty fascinating)
That is the reason almost everyone looses, consistently, just like in Vegas.
  • #37
  • Dec 28, 2014 12:39pm Dec 28, 2014 12:39pm
Quote
o you started a thread named "it seems almost impossible to make money in the long run", then you keep on telling me "You're wrong." instead of at least saying you think I'm wrong or in your opinion I'm wrong or you disagree, then you state that "Every business is a purely statistic thing", but at the same time don't want to see the statistic part of forex trading.

Don't get me wrong.

When I say, you're wrong, it's always according to my opinion and it' couldn't be otherwise. That's why I don't write "in my opinion" bcs it's always just my opinion.
  • #38
  • Dec 28, 2014 2:04pm Dec 28, 2014 2:04pm
Quoting VaBikePacker
I don't think it's impossible to &quot;make money&quot; in FX - but, the expectations have to be realistic as well. A few opinions of my own: - If you think FX is a place where you can reliably pitch in $100 or $1000 and see it become millions quickly, this isn't the market for you. - I don't think this market is one that causes explosive growth, I think exposure to the FX market is a realistic place to achieve continuing growth. If you run a profitable business outside of trading or you're profitable in a different market (stocks, options, futures,...
I agree with you. It is a scam set up to make traders continue to lose. It s only the lucky few who may escape this and the market trick them to collect back what they win. It is very difficult to see any trader that can boast and say they have successfully withdrawn monthly $10,000 or even less . Many are pretenders and agents to brokers; with lies.
  • #39
  • Dec 28, 2014 2:10pm Dec 28, 2014 2:10pm
Quoting cuchuflito
About 5 banks control more than 50 % ....
At least someone understanding a little how it works.
  • #40
  • Dec 28, 2014 2:41pm Dec 28, 2014 2:41pm
Quoting cuchuflito
About 5 banks control more than 50 % of the forex volume traded...you can google the exact figures. They trade for their own pockets, with robots created by the best engineers,...and massive $. Add to that insider information, as to where orders are sitting ... Manipulation, by means of massive orders to reach and hit the so called...."Liquidity pools", (retail orders in form of stops), sitting on the obvious places get cleared on a constant basis...creating a regular transfer of $, from retail pockets to these Big Players. Markets move on a constant...
let's hear what a bank trader has to say

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