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Is Forex trading worth it? If so, why?

  • #101
  • Dec 3, 2015 9:47am Dec 3, 2015 9:47am
Actually fx trading is kind of confusing in the sense that there are literally 100s of trading systems and methods you can see it right here and even more in the commercial section. Each trading method can be considered as a system by itself that is if you are using that system you won't be following another system and here lies the problem. I believe most systems here are technical that is they follow rules most of us would know. enter when price does something put TP important points in the chart typically when it's say a support/resistance lvl, put SL at the last open/close of the earlier candle. Trade off fib lvls etc etc.

In the first place what we were thought in school doesn't apply in fx trading and also the amount of time taken to learn something on fx doesn't mean it will work and it's made worse when teachers of various systems nit pick using price lvls that conform to what they teach while ignoring other price lvls that don't. What you see is total confusion especially by newbies.

In school you were taught say 1+1 = 2 or 2x3 = 6 for example. There isn't such a thing as 1+1 might be 2 or lower than 2, 1+1 is 2 period. Same with division and mulitplication systems. You take that same mentality with you into fx trading with all those fancy tools and you find it doesn't work.

One example fib retracements. So you draw a fib retracement from the highest to the lowest point. Well to be honest i seriously doubt price actually hits those particalr lvls like 68, 50, 23 etc most of the time price overshoots them and then suddenly just blows right through them.

It's made even more confusing when many trading methods especially technical ones say you don't need to follow the news aka fundamental trading. OK that's fine. Until important news event comes on say the ECB thing today and what happens? Price just simply blasts through old support and resistance lvls which totally goes against the trading method taught. Then when you question it some ppl will claim oh you didn't know today there was some big news event and you are thinking well i wasn't told to look at these news events. You see the problem here?

Actually i believe many fx trading methods teach a trader to look only at one aspect of trading while ignoring others and then when he loses he gets blamed for not having enough experience, not having proper money management etc.

I think currently fx trading is something like say the egyptians using mouldy bread to heal wounds. Bread that went moudly produced anti biotics and they helped to kill harmful bacteria. Ancient egyptians didn't know about that. All they knew was that moudly bread placed on wounds made the injuries heal faster they couldn't see the entire picture.
  • #102
  • Dec 3, 2015 9:53am Dec 3, 2015 9:53am
Quoting triphop
I've always maintained if you're in trading for the money, you've lost before you start. Not only that, but that fact that money is the only driver means you'll be run ragged with your losses too. Do what you love, look after those you love, and f*ck anyone who tells you otherwise.
+1. Nailed it.
  • #103
  • Dec 3, 2015 9:54am Dec 3, 2015 9:54am
Quoting Cubbybgood
{quote} Well, without getting in to everything, the short answer is... I stopped buying forex systems. I stopped downloading every system and indicator I could find on FF and pretty much everywhere else. Eventually, I realized I needed to come up with my own ideas from watching the charts. After 1000's of hours of chart staring and a lot of personal chart research I realized that smart money management was what I was missing. I can tell you one thing...a system is important but money management is KEY to success. I also trade in a way that I only...

Can you explain this smart money management system?

I think it's accepted that a percentage of time in the fx markets let's assume it to be 20% the markets will suddenly jump upwards or downwards for example like let's take today's ECB event. The euro just jumped. I think prior to this if you were looking at a euro pair chart say the eurusd you would be shorting it not longing it.

So how would you have avoided this event or trade this to your advantage? Do you look at the forexfactory calendars and look for important events?
  • #104
  • Dec 3, 2015 10:01am Dec 3, 2015 10:01am
Quoting forex_fairy
Actually fx trading is kind of confusing in the sense that there are literally 100s of trading systems and methods you can see it right here and even more in the commercial section. Each trading method can be considered as a system by itself that is if you are using that system you won't be following another system and here lies the problem. I believe most systems here are technical that is they follow rules most of us would know. enter when price does something put TP important points in the chart typically when it's say a support/resistance lvl,...
Trading is actually pretty simple. The speculator develops an opinion on where he thinks price is heading and then acts on that opinion when the opportunity presents itself.

Thats all there is to it.
  • #105
  • Dec 3, 2015 10:14am Dec 3, 2015 10:14am
Quoting Atokys
{quote} Trading is actually pretty simple. The speculator develops an opinion on where he thinks price is heading and then acts on that opinion when the opportunity presents itself. Thats all there is to it.
So he should look at news?

If it's so simple why is this forum so large with so many threads and so many sections on trading systems divided into paid and free?

Is this some type of con job? If it was so simple like you mentioned that you could just simply summarize it into 1 sentence then are the huge number of ppl that write free trading systems, creating commercial systems and ppl paying for them well just simply idiots.

Why would we even need the forum at all?

We could just have the news section for important events and just have a simple trading methology.
  • #106
  • Dec 3, 2015 10:17am Dec 3, 2015 10:17am
Quoting forex_fairy
So he should look at news?
Thats up to him, he could very well look at the moon and stars if he wished. Its his opinion and money after all.
Quote
If it's so simple why is this forum so large with so many threads and so many sections on trading systems divided into paid and free?
Beats me.
Quote
Is this some type of con job?
?
Quote
If it was so simple like you mentioned that you could just simply summarize it into 1 sentence then are the huge number of ppl that write free trading systems, creating commercial systems and ppl paying for them well just simply idiots. Why would we even need the forum at all? We could just have the news section for important events and just have a simple trading methology.
You said it not me.
  • #107
  • Edited 4:23pm Dec 3, 2015 10:21am | Edited 4:23pm
Forex Fairy, you're killing me. Are you being sarcastic or serious? What systems are you talking about? You think someone is going to give you a winning market system???? It's a sham. I want to throw-up every-time someone mentions the word system. The market is driven by fundamentals/news. Banks push the money around. You just need price. Watch it everyday around the news until you figure out something that will make you money. A clean chart is less distracting.

Quoting forex_fairy
{quote} So he should look at news? If it's so simple why is this forum so large with so many threads and so many sections on trading systems divided into paid and free? Is this some type of con job? If it was so simple like you mentioned that you could just simply summarize it into 1 sentence then are the huge number of ppl that write free trading systems, creating commercial systems and ppl paying for them well just simply idiots. Why would we even need the forum at all? We could just have the news section for important events and just have a simple...
SPC * Swollen PocketZ Crew!
  • #108
  • Dec 3, 2015 10:26am Dec 3, 2015 10:26am
See above... stop spamming

Quoting forex_fairy
{quote} Can you explain this smart money management system? I think it's accepted that a percentage of time in the fx markets let's assume it to be 20% the markets will suddenly jump upwards or downwards for example like let's take today's ECB event. The euro just jumped. I think prior to this if you were looking at a euro pair chart say the eurusd you would be shorting it not longing it. So how would you have avoided this event or trade this to your advantage? Do you look at the forexfactory calendars and look for important events?
SPC * Swollen PocketZ Crew!
  • #109
  • Dec 3, 2015 12:12pm Dec 3, 2015 12:12pm
hi all,

it's a good subject, I have often thought of it.

I guess each of us has to determine "what is the worth" we assign to trading.

Is it:
- monetary
- acquiring a new skill
- turning into a carrer
- is trading just a hobby, an "exotic" one feeding the ego, is it a form of gambling of sorts?

In any endeavor I take, I thing of the following verse from Bhagavad Gita 2.47

"Don't let the fruits off your action be thy motive, don't attach yourself to inaction".

So maybe trading in itself is just of vehicle which can potentially impact our life positively or negativele and may or may not change us.

If monetary, think of this:
- if you are able to consistently generate "only" 10% per annum return then you can consider yourself quite performant. Most FX and shares funds will be quite happy with that kind of return.

If turning into a career:
- quite hard, there is a gap between FX trading skilss and needs in the financial market for these types of skills.
If you want to be a trader for a hedge fund, an analyst or other back office jobs there are few firms and places in EU or US (mostly in London and New York from what I noticed).

If as a hobby:
- It can become a disguised gambling or something exciting in life. power and effect of gambling should be considered quite seriously.

Acquiring a new skill:
- I believe one can learn trading if it is genuinely desired and eventually can find a fitting style for each personality, trading style (short, medium longer term which I mean that positions can be held more than 30 days lets say)
Unfortunately all this info available does not tell one exactly how to trade only priciples which one can incorporate.

I have found it most frustrating that one has quite a low chance of turning this into a career as a trader or analyst for hedge funds, brokerages, etc.

it seems that most is done these days via computer algoithms and they are searching for mathematicians, other scientits, etc.

If one has a trading style which is more long term focused that also the more difficult. It's difficult to be the New Turtle Trader.

If 10% seems low do see the results of professional FX funds on I A S G dot com.

While chasing 200% return per annum one has extremely high chances of blowing the account up and scarring oneself financially, mentally and emotionally.

So in the end is it worth it is a broad question.

what is worth in the end is a broad discussion.

if you are passionate about and you consider to be worth it then so it is.

if can be frustrating though that chances are low to turn into a career especially since you'd be doing it right because you are passionate about it - I find this quite concerning and yes frustrating.

Monetary: I believe that one can think of having this as a secondary income if one can trade an EUR 100,000 account and aim for 10-20% return per annum, if one can accomodate the other sourse of income (main job, business, etc).

So these are my thoughts on the subject, hope you find them useful, the considerations are based on my personal experiences.

best, all!
  • #110
  • Dec 3, 2015 12:45pm Dec 3, 2015 12:45pm
Whether trading is worth it or not is specific to the individual trader's situation, wants, needs etc.

Also, none of those factors will change the fact that successful trading is based on two core principles, 1. Understanding of Probabilities and 2. Risk Management. It's not who knows order flow, MAs, Fibs etc. Everybody is trading probabilities and managing risk. Some are terrible at spotting good probability setups and some are not. Some are terrible at risk management and some are not.

All systems work, but not all traders can get them to work. Which is why places like this a terrible to hang around for too long once one is rational enough and has understood the basics of market movement. There's an overload of information here, which simply creates a culture of system hopping and guru chasing. Most of the people here aren't as addicted to trading as they think they are, they are addicted to the forums. The search for the holy grail, the holy guru, the "oh shit, here's someone who did it, so it can be done", is a never ending endeavor. Most members here spend more time on that than actually doing what it is they set out to do in the first place - trading and making money. Of course as some others have alluded to, the powers that be here and their partners (brokers)love this sort of culture as it fills their pockets in more ways than one. And who wouldn't? I'm almost the stage where I will put a permanent block in my browser to stop myself from visiting this site.

Warren Buffet is the most successful investor there is and he sits in quiet Omaha everyday reading annual reports instead of having a fancy office on Wall Street with tons of screens and constant chatter around him. Go figure.

Anyways, just rambling...
  • #111
  • Dec 3, 2015 4:32pm Dec 3, 2015 4:32pm
Quoting Cubbybgood
Why do I trade? Is it to be rich? Do I trade as a hobby? Do I love it? do I hate it? These questions I've asked myself now for over 11 years. Forex trading has been an expensive venture for me. Back in my first 2 years of trading I lost $30k. I almost went bankrupt because I was naive and greedy. I now have been profitable for over 15 months. Is forex trading harmful? I've seen a countless amount of people lose everything and more trading. Why do we put ourselves threw all of this just for a chance at the profitable 5% club? What are your dreams...
Very touching!!! Let me share my story. We live in a developing country. My husband is IT Manager, eventually after 1998 financial crisis, my husband has been asked to include forex rates, commodity prices, and stock prices forecasting module, beside his main function as database analysts, administrator, network engineer, and system admin. The company made gain through 2007 crisis, and by 2012 (another crisis predicted by us), there is some BIG money bought the old company (my husband had been working there since age 21.In 2012 he was 43). My husband helped during the public audit (he knows all the data by heart), and it ran smoothly. TO OUR HORROR, the company terminated him after all was done. We didn't get compensate, the law in our country bend to big money, and politician. We tried to apply for unemployment benefit, again meet hard brick. Our tax/insurance can only be redeemed, when my husband 55 years old. Nutters (how can he live through 12 years without money to buy food?).

Why we trade? we don't have any other means, our cost of living about $600 / month, my husband over 40, he cannot get any job (maximum is 35). I was working at "sweat shop" for $40 / month to get by. We have one son (2 years old back then), need nutrition, and later pre-school, and good healthy environment. Our saving is our house, vehicles we let go. We don't want to trade, it reeks evil. Greediness will consume us. Do we have choices? NO. We don't want our son to start from zero, both of us only finished high school, so long hours, wages barely enough, and when you are old, employer will cast you out like trash. Our government? They are demons in human disguise.
My husband program turns out very good, we start small. We did crash. Not once, but five (totally, we lose $500 to the system). Over leverage kill us. Trading jitters kill us (when we saw profit, we haste to take, when we saw lose, we bail too early, or worst we let it run into margin call. SL hard to determined, so does TP). Took us more than one year, to finally develop the programs and data into accuracy. We trade for a living, and better future for our only child. Starting from our $20 accounts, to the financial freedom we have now. God have mercy on our souls.
Don't blame the tools. Blame the carpenter.
  • #112
  • Dec 5, 2015 5:24am Dec 5, 2015 5:24am
Quoting CindyXXXX
{quote} Thats great man.. I was watching this video the other day where they did scientific testing on happiness and they strove to answer the question; Does money make you happy? And of course the answer they found was a resounding YES... But also what they found was that once basic needs were met... Food, Shelter, Clothing... The marginal benefits of money were very minimal.. Ive also found this to be so true... I like your post it represents this fact.
I am inclined to think that unhappy people are more likely to pursue material/moneymaking goals - they think or hope it will cure their unhappiness. Somebody (I forget who) once said that money does not buy happiness, but it does buy a better class of misery.
  • #113
  • Dec 5, 2015 6:14am Dec 5, 2015 6:14am
  •  Neio
  • Joined Oct 2012 | Status: Can't think outside?Enlarge the box | 688 Posts
Nice thread.

Money and material possessions have a limited affect on happiness once you have enough to cover the basic needs.

Time is more important than money. I know money can be used to help you to buy more time to do things that can add to your happiness (spend more time with family and loved ones and friends). It can be used to help people who are less fortunate financially.

I like to think this is why most people are pursuing money, but don't do it at the expense of things that are really more important to overall happiness and well-being.

Is Forex trading worth it? hmmmm

Is Forex trading worth losing your marriage over? Definitely No. Marriage is strongly linked with happiness. (Despite the nagging)

Is Forex worth losing time with your family and children over? Definitely No. Seeing your children grow up and spending time with them helping them to develop is a source of joy.

So to me it seems to be a risk management issue. How can you pursue your goal of being successful at Forex without risking the more important things? Demo trading until profitable. Small live accounts compounding up. Limit the time you spend on it when the family are around and utilise other times (early in the morning, late at night etc, while they are at school, work etc)

If you are insistent that Forex is something that you must conquer. Try to enjoy the journey without risking it all. In the end you may never make it but you will learn many lessons about yourself that you can use to make you a better person and a happier life.


Regards

Neio
An expert is a man who has made all the mistakes which can be made
  • #114
  • Dec 5, 2015 6:27am Dec 5, 2015 6:27am
I'm still a newbie and I actually have dreams about opening huge trades and market going crazy in my favour all of a sudden lol
  • #115
  • Dec 5, 2015 6:32am Dec 5, 2015 6:32am
Inserted Video
  • #116
  • Dec 5, 2015 7:32am Dec 5, 2015 7:32am
So many good things have been said here to help people on there journey of thinking in a different way.


Now lets talk a bit about why 95% of people lose in trading.

What are the biggest mistakes that are made? Why do only 5% of traders profit? What needs to change and how can this number grow?
  • #117
  • Dec 5, 2015 7:32am Dec 5, 2015 7:32am
Quoting bobbles
I am inclined to think that unhappy people are more likely to pursue material/moneymaking goals - they think or hope it will cure their unhappiness. Somebody (I forget who) once said that money does not buy happiness, but it does buy a better class of misery.
The more important point here is that people are attempting to 'cure' or 'solve' their feelings. This approach rarely works and only aggravates the condition.

Good trading involves embracing and even enjoying all the feelings that come with the ups and downs. We ride market trends as they evolve and then dissolve, the same applies to the feelings that we celebrate in the process.
  • #118
  • Edited 8:00am Dec 5, 2015 7:35am | Edited 8:00am
Quoting Cubbybgood
So many good things have been said here to help people on there journey of thinking in a different way. Now lets talk a bit about why 95% of people lose in trading. What are the biggest mistakes that are made? Why do only 5% of traders profit? What needs to change and how can this number grow?
The method. The 'mistake' is to use methods showcased in books, videos(youtube) and forums.

This belief that they work needs to change.
  • #119
  • Dec 5, 2015 7:46am Dec 5, 2015 7:46am
Quoting Cubbybgood
Now lets talk a bit about why 95% of people lose in trading. What are the biggest mistakes that are made? Why do only 5% of traders profit?
For the same reason that most baby turtles fail to reach maturity: Many are called and few are chosen. Society works by the attraction of the many. As they are culled out, the good ones are left, and the others are released to go try something else until they find their calling. The same is true for other fields of pursuit.
Quote
What needs to change and how can this number grow?
The individual trader has to change himself/herself.
  • #120
  • Dec 5, 2015 8:46am Dec 5, 2015 8:46am
Quoting Atokys
{quote} The more important point here is that people are attempting to 'cure' or 'solve' their feelings. This approach rarely works and only aggravates the condition. Good trading involves embracing and even enjoying all the feelings that come with the ups and downs. We ride market trends as they evolve and then dissolve, the same applies to the feelings that we celebrate in the process.
++++++++



But I would add that, good trading means "curing" tacking the source of the feelings/negative situation in positive and resourceful ways. The default response built into our human psychology is typically wrong.

An example is when a trade goes against us. It is painful, and (speaking generally) the correct response is to cut the losing trade, not to keep holding onto it or adding to it.

I believe 99% of people lose in FX trading because the FX market is just too bloody efficient. To succeed consistently is just too damn hard.
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