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I've figured out why so many people lose money in Forex

  • #81
  • Feb 23, 2015 4:52pm Feb 23, 2015 4:52pm
At least if there is one certainty in trading you can rely, really trust and base yourself as a very strong and solid edge, it's this: price don't move back in time. Never.

Aside that, everything else can happen.

So be ready and have a plan. Whatever happen, Up / down / range. Have a plan. But remember, it will always take place from the left of your screen to the right. This is the only certainty.

And in case you see things going ways your plans do no longer recognize, shut all down and get out of where you are...because it means that your position possibly just became a target. As from the moment you enter, your position becomes the potential way out for another one to exit. So Keep it in mind: when you do no longer recognize the landscape around you, you've just stepped into the enemy's territory. And without an extraordinary training you just can't survive there.

Hunting predictable high probability scenario's in the chaos. I believe this is all about trading, specially Forex. Don't step into messy config you've never seen before. But rush into the ones you know very well when you seen them happening. High probability scenario and advanced smart money management.

But definitely, if Excel is not your friend then move away.
  • #82
  • Feb 23, 2015 8:23pm Feb 23, 2015 8:23pm
Quoting albchr
{quote} LOL ... maybe a tad long winded but very true and quite humorous as well. Perhaps I had a small advantage going into Forex. (and my own business at age 16) My folks raised me on this simple notion. Your day starts with you looking in the mirror. It ends the same way. Nothing changes in between.
Indeed, the more words the smarter it sounds plus was kinda bored all day I started forex when I was 15..I'm 29 now.. feel old. Its nice though cause I get to teach it to my son when he gets older. The birds and the bees of Forex.
There are those who know, and there are those who don't know.
  • #83
  • Feb 23, 2015 9:10pm Feb 23, 2015 9:10pm
Quoting palabara
{quote} Indeed, the more words the smarter it sounds plus was kinda bored all day I started forex when I was 15..I'm 29 now.. feel old. Its nice though cause I get to teach it to my son when he gets older. The birds and the bees of Forex.
I would have loved to have started at your age. I'd be set by now. ... But, better late than never.
Ghost Rider - WWTBMD?
  • #84
  • Feb 23, 2015 10:44pm Feb 23, 2015 10:44pm
Quoting replaced
All incorrect. It doesn't matter if your price target is larger than your SL. If your price target is 100 pips and your SL is 50 pips, what will happen is that the SL will trigger 66.6~% of the time while your price target is hit 33.3% of the time. The only solution to lowering loses is to stop placing trades based on price action, TA, or any kind of system based on price and reduce leverage and deleverage if a trade goes against you a lot. SL is not needed, only the deleveraging is needed. Why buy high and sell low? Price targets should be no less...
Are you trading or are you gambling? If you are just randomly buying or selling, okay. You might be right. But if you are using technicals and fundamentals, yours odds of winning are not a coin toss. If EURUSD over the past month has been trading between 1.2200 and 1.2300, and for the past 8hrs its been sitting on 1.2200 trading within a 20 pip range, you can set a buy order with a 10-20 pip stop loss and a price target of 1.2300. According to you the SL will trigger 80-90 percent of the time but I highly doubt that would be true. With technicals alone your odds should be one half, and if youre also using fundamentals , multiple period charts, etc, you can raise your odds even further.

Repeat the above scenario except now say EURUSD has been trading for past 8 hrs within a 40 pip band. You would need a larger SL and thus this trade is not as attractive. But the larger SL doesnt change your chance of losing, it just skews the risk/reward
  • #85
  • Feb 23, 2015 11:03pm Feb 23, 2015 11:03pm
Quoting Delta1One
.................At least if there is one certainty in trading you can rely, really trust and base yourself as a very strong and solid edge, it's this: price don't move back in time........................
LOL. It does. Ask many who were in that CHF trade few days ago.
The Thief of Wall Street
  • #86
  • Feb 23, 2015 11:49pm Feb 23, 2015 11:49pm
Quoting palabara
{quote} Indeed, the more words the smarter it sounds plus was kinda bored all day I started forex when I was 15..I'm 29 now.. feel old. Its nice though cause I get to teach it to my son when he gets older. The birds and the bees of Forex.
Ok, now that you're 29 you've had TONS of opportunity to make money in Forex. What's the TOTAL amount lost or gained since you started? Every live account combined. You should have at least a million in gains and equity. If you don't have a million dollars right now then what you thought in the past maybe was not correct?


Quoting RobertCorey
{quote} Are you trading or are you gambling? If you are just randomly buying or selling, okay. You might be right. But if you are using technicals and fundamentals, yours odds of winning are not a coin toss. If EURUSD over the past month has been trading between 1.2200 and 1.2300, and for the past 8hrs its been sitting on 1.2200 trading within a 20 pip range, you can set a buy order with a 10-20 pip stop loss and a price target of 1.2300. According to you the SL will trigger 80-90 percent of the time but I highly doubt that would be true. With technicals...
How do you know that you aren't doing anything different than randomly buying and selling? The ROI is the same for a person randomly picking red & black on roulette and a system picking the opposite color of where the ball last landed on. You need to look at your account and see if what you believed would happen actually did happen. If you believed that your account would have a big gain but in fact it has a big loss, then how do you know that you're wrong or right after what you believe in as far as trading goes?

You said that SL is only one half triggered. So your ROI must be through the roof. So where's your millions?

If it was that easy, HFT would be all over it until it wasn't profitable anymore. HFT would place buys/sells within the millisecond of a chance of making pennies on the trade.
  • #87
  • Feb 24, 2015 2:19am Feb 24, 2015 2:19am
Quoting replaced
All incorrect. It doesn't matter if your price target is larger than your SL. If your price target is 100 pips and your SL is 50 pips, what will happen is that the SL will trigger 66.6~% of the time while your price target is hit 33.3% of the time. [...]
Really?

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  • #88
  • Feb 24, 2015 2:48am Feb 24, 2015 2:48am
Quoting replaced
[...] Personally, I would prefer stocks over Forex. [...]
Could you elaborate on this? What do you think is better with stock trading?
..
  • #89
  • Feb 24, 2015 3:32am Feb 24, 2015 3:32am
Quoting Slicktick
{quote} Really? {image}
Yes really. Why would you think different? If making money was that simple then HFT could employ those tactics until there was no longer opportunity.

Quoting Slicktick
{quote} Could you elaborate on this? What do you think is better with stock trading?
Dividends and asset growth. You'll likely lose money if you buy and sell stocks within short periods of time or use leverage.
  • #90
  • Feb 24, 2015 3:46am Feb 24, 2015 3:46am
Quoting replaced
.... Dividends and asset growth. You'll likely lose money if you buy and sell stocks within short periods of time or use leverage.
You just saved yourself from being tarred. Until now I was expecting you to be running a second user-name in order to poke the fire. I spent time looking for the name of that person who uses the Mad Magazine character as an avatar, ...and became distracted elsewhere.

I suggest that forex trading is not for you.
Bon Chance!
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #91
  • Feb 24, 2015 4:03am Feb 24, 2015 4:03am
Quoting Tom_D_Trader
{quote} Thats pretty rude. Am very sorry for you guys. Sick :/
If I knew in advance that my post would have been considered rude even by just 1 person, I would have tried my best to rephrase my message to avoid such an incident. I don't know why it is rude. My point was about mathematical edge and probabilities. The main point was about the control one has over a trade by being able to move stop loss or close the trade. That control alone doesn't guarantee a mathematical edge.
  • #92
  • Feb 24, 2015 4:14am Feb 24, 2015 4:14am
Quoting redgreen
If I knew in advance that my post would have been considered rude even by just 1 person, I would have tried my best to rephrase my message to avoid such an incident. I don't know why it is rude. My point was about mathematical edge and probabilities. The main point was about the control one has over a trade by being able to move stop loss or close the trade. That control alone doesn't guarantee a mathematical edge.
See, the point is Alb is a) really helpfull guy b) skilled trader. Just look at his charts, he is a pro. So, asking a pro if he knows expected value of trades is rude. Also calling his posts naive is very rude.

Quoting redgreen
Do you know the expectancy of your trades? Do you know your expected value if you close your trade now or later? The control you have does not guarantee you a positive profit factor. If you don't know your expectancy it's just gambling no matter how dressed up as sophisticated investing is. Your post seems very naive
Take it as a lesson of behaviour in internet community full of traders. Some are agressive, like me. Am also helpfull, but if you imply in a post I dont even know what RR means - and thats what you implied with your question if Alb knows expected value of trade - you go straight to ignore, because no trader can ask such a nonscence. If you dont know what RR means, there is no place for you here. Get it? It is rude.

T
"I know one thing, that I know nothing." Sokrates
  • #93
  • Feb 24, 2015 4:19am Feb 24, 2015 4:19am
hi,
too many people use higher leverage and over trade.
I hope to make $250,000 this year.
I post my trades free in facebook. Anyone can follow me.
I took around 10 Years to make good profit and a strong living.

outlawtrader.com
  • #94
  • Feb 24, 2015 4:20am Feb 24, 2015 4:20am
Quoting albchr
{quote} Yes, I'm very nave with no expectations for my trades. Good "luck" with your trading ... or gambling or whatever.
I don't understand why you insist with the gambling issue, considering I was the one talking about having a mathematical edge and how the absence of that makes any kind of trading gambling.

Regarding the expectations of the trades, my point was that control over trades doesn't guarantee a mathematical edge. It's even more complex to handle because basically in each instance the probabilities change and it's hard to factor that in the decision making process.

However, I believe you can gain an edge with a good entry/exist system combined with good money management and discipline. That's why I am still interested in forex but I am convinced the algo trading path is far more advanced because you can backtest and quantify your edge and modify/improve the system every week. I can't help but notice though that a vast majority of the retail traders will not make it in the long run (is it 90%) and I sadly think that it has to do with the fact that most don't understand the simple concept of mathematical edge and regardless of how sophisticated their approach seems to be, they are still just gambling.

Another point I wanted to make is that even if some wins for a good period of time, as long as they don't approach it in a way they can quantify their mathematical edge and be confident in it that it will stay the same, they can just be "fooled by randomness" and yes I am making a reference to the book. Another interesting book about probabilities is the drunkards walk.

The thing is, even professionals with huge hedge funds go bust. A lot of the financial speculation can be called gambling. And speaking of gambling when Richard Denis and W. Ekhardt selected candidates to teach them their trading system for the Turtle Traders project, the ones with a gambling background (from a mathematical approach) were considered more suited than any other candidates because understanding probabilities, mathematical edge and money management (which also is related to probabilities) made them more suited candidates for their project where they wanted to convert them into successful traders. If you do your homework regarding probabilities weather it's statistical analysis or backtesting with algos, or even the card counting method in blackjack, you are not a gambler in the traditional sense of the word, and casinos, bookmakers and brokers will be afraid of you. If you can't quantify your edge or the house edge, it's almost (if not definitely) gambling. You can still make money but you can be fooled by randomness when you do that unless you properly understand from a mathematical point of view why you are making money.
  • #95
  • Feb 24, 2015 4:26am Feb 24, 2015 4:26am
Quoting Tom_D_Trader
{quote} See, the point is Alb is a) really helpfull guy b) skilled trader. Just look at his charts, he is a pro. So, asking a pro if he knows expected value of trades is rude. Also calling his posts naive is very rude. {quote} Take it as a lesson of behaviour in internet community full of traders. Some are agressive, like me. Am also helpfull, but if you imply in a post I dont even know what RR means - and thats what you implied with your question if Alb knows expected value of trade - you go straight to ignore, because no trader can ask such a...
I think I understand now and I am sorry it sounded that way. English is not my main language but I am not that bad with it, and I considered my post to be part of a debate regarding the advantage of control over trades and it's correlation with mathematical edge. I can see why it can be seen as an insult but I was not implying he doesn't know what he is doing, my questions were merely rethorical questions posing as counter arguments to his initial statement that seemed to imply that having control over the trades gives you an advantage.

It was not intended to be an insult.
  • #96
  • Feb 24, 2015 4:34am Feb 24, 2015 4:34am
Quoting redgreen
It was not intended to be an insult.
I thought so, thats why it was Trenderer who ended on ignore and not you . He really was very rude and getting on my nerves for some time already. Most of disputes usually narrow coz are usually caused by a) market moving too fast and everyone stressed/hyped b) language barrier. No big deal.
"I know one thing, that I know nothing." Sokrates
  • #97
  • Feb 24, 2015 5:22am Feb 24, 2015 5:22am
replaced, replaced replaced

1) you are speaking about HFT like a magic word yet you dont even know what its all about.
do kindly explain what is the definition of HFT so everybody knows what you are talking about
or maybe you just dont have a clue ?


2) you are coin flipping like crazy with your behavioral bots.

maybe you want to convince yourself that forex market is random and try to convince others so you can quit this addiction ?


the market is not as simple as your programs

for your little lemmings to model accurately this beast you are basing your reasoning on the hypothesis that all the behaviors that occur on forex are spread evenly. only in this case you could assume that the sum of it would lead to a random walk.

but you are dead wrong on this.
behavior is no evenly distributed,
its more like a bell curve.
there is a common behavior that makes people lose in a perma way
panic mode kicks very often and price manipulate the brains to obtain a common mass behavior that lose money
  • #98
  • Feb 24, 2015 5:49am Feb 24, 2015 5:49am
Quoting redgreen
{quote} I don't understand why you insist with the gambling issue, considering I was the one talking about having a mathematical edge and how the absence of that makes any kind of trading gambling. Regarding the expectations of the trades, my point was that control over trades doesn't guarantee a mathematical edge. It's even more complex to handle because basically in each instance the probabilities change and it's hard to factor that in the decision making process. However, I believe you can gain an edge with a good entry/exist system combined...
I was simply responding to your false accusation of me being naïve. No matter, when you know how to trade, you'll see. Best wishes to you.
Ghost Rider - WWTBMD?
  • #99
  • Edited 9:35am Feb 24, 2015 7:40am | Edited 9:35am
Quoting replaced
{quote}Ok, now that you're 29 you've had TONS of opportunity to make money in Forex. What's the TOTAL amount lost or gained since you started? Every live account combined. You should have at least a million in gains and equity. If you don't have a million dollars right now then what you thought in the past maybe was not correct?
and that is the noobie mentality that fails in forex. You count being successful by making a million dollars? if you made $1 million dollars then you are successful.. You actually left me speechless lol, cause I don't even know how to respond to this. I'm a full time trader, with a family. this is all I do, wlel this and I have my 3D art hobby, but I do that just for fun, I also study science, and chemistry but that's so I can keep learning but for finances, I do this. This is my bread and butter.. this pays my bills and I get to spend all my day with my son who drives me crazy a lot but that's besides the point lol. Still love the gremlin.. My success is not measured in 1 MILLION DOLLARS (Dr. Evil) *Laugh*! My success is measured in my ability to become consistently relaxed profitable trader. It was a big leap, because after trading for years, I decided if I want to be really good, I need to stop everything and focus on Forex, so I told my wife. Once my contract is up at work, I want to do forex full time, and we either crash or burn or this will be our new life. I've developed my own custom unique trading strategy specific tailored to my behavioral patterns, to focus on my weaknesses as a trader, and highlight my strengths. It paid off, I took a lot of risk and a big leap. As long as I can continue growing, providing, and remaining stable. I'm no lottery winner mentality.. It took a lot of hard work and effort, I put in 60 hours a week in Forex, building models, calculating numbers, and doing a lot of work. I get to relax now, because I've already put in a lot of work and just have to adjust as market conditions contract and expend based on fundamental catalysts. So yes, I am successful, its been a rough ride. I didn't give up, over the course, I've hit a lot of bumps and fell into dozens of pits. I felt it was impossible, I've felt angry at myself, after cleaning the dust. I got up and did it again, and again and again. If Forex was easy, everyone would be doing it, and then what? If someone wants 1 million dollars let that be your goal and work towards it, my goal is consistency week after week month after month. Because like you've stated in your model the more trades I take the more I lose.In my model I build. I take only about 3-4 trades per month per currency.. about 50 trades per month in total give or take. My trades I hold them depending how long it takes which currency, and when I crunch the numbers.. I make more then I lose. So losses are just expenses of doing business.. In the end my profits always out do my losses even if I had 2 wins and 3 losses - my wins are still more then my losses. Still ahead month after month after month.. and no not 1 MILLION DOLLARS, but consistent growing. I'm sorry you don't approve of this. In your eyes, I've failed and I shell never live this down

Just want to quickly emphasizes about the "relaxed" being a relaxed forex trader is extremely important! Being on high anxiety levels does not help in trading, to be a good trader need to be relaxed and not feel like the market is twisting you. When you are relaxed as a trader you make more clearer decisions, you don't feel pressured to act or react to any situation instead you understand its all part for the course.

another note lol: biggest part of my failures as a trader for many many years.. was that I felt that if I'm not in it, I missing out. I've always was inclined to hold a position to feel assured that if it starts running I'm in the race. Instead what has worked for me was to assess allll my problems as a trader all my psychological issues and then problem solve them in a way that its comfortable for me, in a way where I'm not forcing discipline upon myself, but instead approach it in a way where I don't feel its unnatural, instead if you have an OCD issue you react to it.. so instead of fighting it, I found ways to incorporate my problems via solutions that are as OCD people do the things that relief their anxiety. Without anxiety, I don't feel stressed without stress, I am clear to make decisions that are well thought planned and I know every which way if this happens I'll do that if that happens I'll do this. I've mapped everything out so no matter what happens, I'm already on top of the situation. So there is no surprises, everything is already embedded and discounted in my own right.
There are those who know, and there are those who don't know.
  • #100
  • Feb 24, 2015 8:34am Feb 24, 2015 8:34am
Want to add that. I'm not trying to bash or put anyone down.. whoever has their own ways of measuring "success" by becoming rich or mega rich or.. whatever. Its good, but its not my cup of tea. I've started with goals like that in mind, but over the years learned whats more feasible to achieve. I trade full time, plain and simply, because I'm tired of working for other people. I don't want to be away from my family all the time. I get to put in work and effort into this, and it pays off. Its an awesome alternative. My bottom line is the reason, I post on here is to "encourage" people, I know that I looked for encouragement when things looked bad. Seeing someone that was able to break through it helps motivate, you feel that there is light at the end of the tunnel. There is, its not easy, and it takes hard work. Forex is like a business or at least a very demanding full time job. If you want or anyone else to be successful need to be able to start with small achievable goals, and then grow them with each milestone. A lot of people aim for the big prize and then fail and feel bad.. Its like if you were doing anything else like competitive sport, and you've just got into it like a week and you say next week I take on the champion of the sport! people would be huh? you've been doing this for a week and next week you want to go against the champion the person who has spent his life working hard.. but when people do that in Forex, it just everyone is like yeah awesome go do it, you'll be great. Of course you will fail, but if you build small achievable milestones, and say okay. I want 5 consistent trades this week.. or I want 10% but not week after week after week, that's also highly difficult to achieve. Small goals, master them and then move on. I want 2% master that then 5% master that etc... Like I said, I won't lose any sleep on what is said on FF. What people think or don't of me, because it is all highly irrelevant to me. If I get to help someone and help them realize that makes a difference, because I've been there. Its easy to be pessimistic, doesn't require much effort.
There are those who know, and there are those who don't know.
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