What does that even mean anyway - common trader sayings | Forex Factory

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What does that even mean anyway - common trader sayings

  • #1
  • First Post: Jun 4, 2015 8:00am Jun 4, 2015 8:00am
Ok, Im bored again so heres a thing, anyone who's been visiting this site (and/or other forex forums) for any length of time will have come across a selection of comments and statements that get put around quite widely and seem to be regarded as gospel truth, some might have some sense even if we dont know the actual math behind them, like for example never risk more than 2% on any one trade, certainly sensible advice to a noob but is it a bit too rigid if you have a system which produces a high percentage of wins? Personally I trade between 0.5% and 4%, usually at the lower end of the range but sometimes a little bit more, depending on the chart in front of me.


What Id like to know is; how many of them have any basis in truth at all? what is simply urban legend? what is total bullpoo and what might be quite useful.

I have my own opinions about most but I'm not sharing them just now.


If you have a favourite quote or rule or something humorous (and vaguely relevant) please post it and hopefully between us we might be able to figure out where they came from and if they actually have any value.

'You cant trade successfully with less than $1000 account.'

'Brokers are hunting stops'

'That system won't work in the long term'

'95% (or any nearby figure) of retail traders bust their accounts in three months and quit.'

'95% of new retail traders are no longer trading after 1 year and X% of the remainder are no longer trading after 3 years.'

and doubtless many more besides,,, please add any you can think of,,,
Don't ask me, I have no idea what's going on.
  • #2
  • Jun 4, 2015 8:06am Jun 4, 2015 8:06am

Heres a view on one of them, you cant trade successfully with less than $1000


That depends entirely on your view of what successful means, sure you cant make a living out of it but you can make winning trades and grow the account over time. Actually I think a micro account is the best way to learn, making small affordable losses tends to focus the mind wonderfully, so on that basis you could help yourself learn to trade successfully with a very small account.
Don't ask me, I have no idea what's going on.
  • #3
  • Jun 4, 2015 8:15am Jun 4, 2015 8:15am

'You can't win as a retail forex trader' (and other variations of the theme).

Don't ask me, I have no idea what's going on.
  • #4
  • Jun 4, 2015 8:17am Jun 4, 2015 8:17am
Agreed, if you have a $100 account and can make $1 then common sense tells me that you can do it again and again.

I've taken a $100 account to a thousand and back again many times!

How about "you're exit is more important than you entry"(or vice versa). BS My profit is the difference so they must be equally important.
Enter Signature
  • #5
  • Jun 4, 2015 8:19am Jun 4, 2015 8:19am
Here is one which I think will find some controversy

It's false to think that you need a 2:1 or 3:1 risk to reward ratio and this is because in that equation you don't know what the reward could be.


Still the majority of traders take trades according to that rule, instead of focusing on the probabilities of a trade going in their favor or not.
Simplicity is the Ultimate Sophistication.
  • #6
  • Jun 4, 2015 1:12pm Jun 4, 2015 1:12pm
Quoting broketrader
Here is one which I think will find some controversy It's false to think that you need a 2:1 or 3:1 risk to reward ratio and this is because in that equation you don't know what the reward could be. Still the majority of traders take trades according to that rule, instead of focusing on the probabilities of a trade going in their favor or not.
Yes, pretty much agree, i think stop loss and take profit should go in correct position for the trade, according to local support and resistance levels etc, too much dependence on arbitrary rules is not ideal. Obviously if the most obvious stops and targets are miles away then one has to think again. In that case I usually pass on the trade.
Don't ask me, I have no idea what's going on.
  • #7
  • Jun 4, 2015 1:16pm Jun 4, 2015 1:16pm
Quoting Don M
Agreed, if you have a $100 account and can make $1 then common sense tells me that you can do it again and again. I've taken a $100 account to a thousand and back again many times! How about "you're exit is more important than you entry"(or vice versa). BS My profit is the difference so they must be equally important.
I've done that too, fun isn't it,

Don't ask me, I have no idea what's going on.
  • #8
  • Jun 4, 2015 3:43pm Jun 4, 2015 3:43pm
Quoting broketrader
Still the majority of traders take trades according to that rule, instead of focusing on the probabilities of a trade going in their favor or not.
I always wondered by people have a exit strategy problem, its always reward * SL

In other words: no controversy from my side. Sure, too big losers are a problem but personally I take trades I'm sure I can get at least 5 pips after spread + communism (ah sorry, commission) out. A losing trade is usually a little bit bigger.
  • #9
  • Last Post: Jun 5, 2015 3:17am Jun 5, 2015 3:17am
"Don't put all your eggs in one basket"
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