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Is Forex trading worth it? If so, why?

  • #121
  • Dec 5, 2015 9:01am Dec 5, 2015 9:01am
If you already think you can't beat the market, you never will.

The biggest part ist Psychology. If you lose, analyse yourself, fix it and try it again.
Nobody learns to fly a plane on the weekend. It takes practice and more practice.
Patience is another big thing in my mind. To try to catch every opportunity is a big mistake. Tomorrow is another day with another chance.

D.
  • #122
  • Dec 5, 2015 9:17am Dec 5, 2015 9:17am
Quoting shellsnail
But I would add that, good trading means 'curing' tacking the source of the feelings/negative situation in positive and resourceful ways.
The thing is most people use their rational conscious mind to attempt to solve feelings using logic and figuring. This is problematic because feelings from the primal mind are not meant to be solved in this manner.

Fully acknowledging and experiencing one's feelings helps to dissipate mass and free thoughts.
  • #123
  • Dec 5, 2015 10:06am Dec 5, 2015 10:06am
I doubt psychology is the biggest problem ... I think it's finding a systematic way to tackle a chaotic everchanging environment ... I even doubt it can really be done by means of short term trading ...
just look at the returns of most hedgefunds ... hardly consistant or even outstanding results ...
there are a lot of dreamers on sites like these ... they keep getting replaced by new dreamers ...
me I totally stopped doing any short term trading and only invest with much longer timeframes in mind ...
  • #124
  • Dec 5, 2015 10:37am Dec 5, 2015 10:37am
Quoting cvds16
I doubt psychology is the biggest problem ...
Speculation is purely a psychological game.
  • #125
  • Dec 5, 2015 10:38am Dec 5, 2015 10:38am
there is much more to it ...
  • #126
  • Dec 5, 2015 10:40am Dec 5, 2015 10:40am
Quoting cvds16
there is much more to it ...
Form an opinion, bet money on it. Thats all there is to it.
  • #127
  • Dec 5, 2015 10:41am Dec 5, 2015 10:41am
Quoting Cubbybgood
Now lets talk a bit about why 95% of people lose in trading. What are the biggest mistakes that are made?
Honest opinion?

Because they're supposed to. That's why the market exists for retail. None of us have the capital to actually impact the exchange rate of a currency and none of us trade on the market that matters. Retail-level access to decentralized, largely unregulated, market prices is nothing short of a wealth-transfer mechanism to facilitate the movement of capital from unsophisticated investors to sophisticated investors. My distaste with forums and "forex education" arises from this opinion of mine as they facilitate the unsophisticated investor losing their money faster by filling their heads with delusions and dragging them down the path of thousands of freely-available trading systems.

I think the biggest mistakes people make is in their expectations; from trading forex, from trading systems, from trading forums. Expecting too much was my biggest weakness.

Quoting Cubbybgood
Why do only 5% of traders profit? What needs to change and how can this number grow?
I don't think there's anything anyone can do to make that number grow because if it does, something is "wrong". I only know what I did to take myself out of the losing percentage and it's the complete opposite of everything I learned in the beginning. I often receive private messages asking me how I trade and to be honest, I don't ever explain because y'all would eat me alive:

-I don't use stop losses.
-I don't use indicators.
-I don't concern myself with entry prices.
-I only look at charts when I plan on exiting a position.
-I don't concern myself with the appreciation of position value (though I do use fixed limit orders).
-I average losers when I when I need to exit them.
-I carry negative-equity trades (losers) for long periods of time.

Without getting into specifics, that is what took me out of the proverbial "95%". In my opinion, getting out of the losing percentage may feel good but, being able to do it for a long period of time feels even better. Markets are all like casinos in nature: the game is rigged, a small percentage is supposed to win and a large percentage adds fuel the small percentages' profits. In my experience, having the capital to not concern yourself with 5, 10, and even 20 thousand point moves while banking on leveraged interest rate payments is the way to go. It may not sound like much but leverage used is relative to capital in the account(s), it doesn't take much more than some basic math to formulate how much pain you can take. I essentially keep myself in a position where only utter devastation would take me out of the market in which case, stops or not, I'm still screwed.

In the beginning, I came to terms with the fact that I was going to risk "x" amount of my capital. When the SNB debacle happened in January and I profited while the majority sank like stones - regardless of whether they had stops in the market or not - I came to terms with the fact that ALL my capital is at risk, all the time. Unless I'm not trading, of course - lol.

As I learned more about the underlying business relationships with LPs, brokers, and market participants of all shapes and sizes, a lot became apparent to me. Trading for a living stopped being a "journey" or a "dream" and became a massive risk in one of the most (if not the most) manipulated markets in the world.
  • #128
  • Dec 5, 2015 11:05am Dec 5, 2015 11:05am
Quoting Bilstein
{quote} Honest opinion? Because they're supposed to. That's why the market exists for retail. None of us have the capital to actually impact the exchange rate of a currency and none of us trade on the market that matters. Retail-level access to decentralized, largely unregulated, market prices is nothing short of a wealth-transfer mechanism to facilitate the movement of capital from unsophisticated investors to sophisticated investors. My distaste with forums and "forex education" arises from this opinion of mine as they facilitate the unsophisticated...
This post is so cool.

- I use stop losses (but usually I exit earlier.)
- I use indicators.
- I concern myself with entry prices to the pipette.
- I look at charts throughout my entire trading session.
- I sometimes add to a trade near to its extreme just before it hits my exit if conditions are suitable.
- I close my losers quickly and carry winners for relatively long periods of time.

I guess this here is the difference between intraday trading and longer-term trading?

I think... most of the readers here would do well to stop the mental masturbation and stop bothering themselves with theory and actually go and trade. Trade as if you know nothing and see what you learn. Just treat it like you are playing a computer game. Do you start by reading a manual or do you actually play the game to figure out the controls? Of course at some point when you want to do some advanced move it helps to look at the guide, but really at the end of the day FX is something you need to figure out on your own. Nothing can replace experience.

The only thing you need to know is how to learn from your experiences. Learn as in really learn; not doing the same thing over and over and trying to achieve different results.
Build good relationships with others.
  • #129
  • Edited 11:58am Dec 5, 2015 11:30am | Edited 11:58am
Quoting shellsnail
{quote}I guess this here is the difference between intraday trading and longer-term trading?
I think it's a difference in approaches to mitigating risk in different time-frame environments. I could trade the same way on an intraday basis, though it would be harder. The only real difference is position value would increase in importance. The longer-time frame approach for me just puts interest payments at the forefront and position value in the "back seat" so to speak.

For example, last week, the AUDNZD recently stopped paying interest on the sell-side. So that became my focus-pair for the day and as the price goes against me, I stack and stack, bringing my average entry price closer and closer to the market price while keeping the initial dollar-amount of my profit target the same. As I stack, the distance between my average entry point and my profit target gets smaller and smaller until it gets swept up in the intraday volatility. Sometimes I can do it in a single day but I like to set myself a good week worth of stacking to get the position off the books. I legitimately sold the AUDNZD back in October at the 1.05 low (almost to the point, lol) and carried it all the way to just shy of 1.11 before the swap payment on the sell-side decreased to a level where it wasn't worth holding. Five consecutive days bringing my average entry price closer to the market price and I was out by Friday. Of course, the risk exists for a pair to keep going against me but I've had times where I averaged in to the point where all I needed was 1.5 points to exit the trade without a loss.

It's not a risk-free method by any means and when people ask me how I trade I usually tell them not to trade like me. You can take the "let winners run" approach or the "carry negative equity" approach, the only real difference is controlling the negative equity which really isn't all that hard. To me, there's nothing wrong with either approach. I keep my dollar-amount for profits a little higher than the cost of commissions and that's all there is to it.

Quoting shellsnail
{quote}I think... most of the readers here would do well to stop the mental masturbation and stop bothering themselves with theory and actually go and trade. Trade as if you know nothing and see what you learn. Just treat it like you are playing a computer game. Do you start by reading a manual or do you actually play the game to figure out the controls? Of course at some point when you want to do some advanced move it helps to look at the guide, but really at the end of the day FX is something you need to figure out on your own. Nothing can replace...
I absolutely agree. That's kinda how I developed my approach over the years. Trial and error, losing money, etc. But like I mentioned, going into detail about my approach makes me (or anyone who trades without stop losses) look like a madman to your average forum-goer. You're absolutely right though; the mental masturbation here(or any forum, really) keeps people focused on "proving each other wrong" and "who's better than who" and that doesn't really help anyone.
  • #130
  • Dec 5, 2015 12:08pm Dec 5, 2015 12:08pm
Well I started trading in 2013.well I invested very few dollars till now and have blown accounts over the time. I have invested too little to make a difference in my bank. But the fact is I am addicted to forex. I have stopped trading for few months and eventually returning and blowing my account. Everytime I come I think I have a strategy . Let's see how I do in this spell
Come tomorrow, I'll wake up new
  • #131
  • Dec 5, 2015 2:26pm Dec 5, 2015 2:26pm
A real job - long term - even at minimum wage, will make you more money than any venture into forex trading...
  • #132
  • Dec 5, 2015 3:22pm Dec 5, 2015 3:22pm
Hi There,
Thought I would give myself the luxury of adding a word or two even though I have only been trading financially and professionally for 7 weeks.I trade 24 currency pairs on one account I use one indicator Stop Loss Mode Reverse Signal with a 2% of equity maximum loss per trade and no filters. I like the fact that a trade is continuously rolling except when hit by the 2% equity stop loss.It took me a whole year to eventually finish and complete the trading software using FREE software and paying for software development some programmers are more like used car salesmen.I new nothing about currency trading but having read a few articles I had this idea that if you trade 24 currency pairs together on one account you would not need much of an edge to trade profitably and when you know nothing about nothing !!!!!
Keeping it simple the value of a currency does only one of two things it goes up or it goes down. Nothing complicated about that and going sideways is only another word for "EVENTUALLY" going down or up.
After 7 weeks 3,606 pips in profit and I would like to thank Dave from Traders Gift and this community for its existence in helping people like myself to succeed.
Cheers from NZ
In reply to Mingary, "Real jobs are disappearing at an alarming rate Worldwide"
  • #133
  • Dec 5, 2015 3:51pm Dec 5, 2015 3:51pm
Quoting Mingary
A real job - long term - even at minimum wage, will make you more money than any venture into forex trading...
It's definitely safer, I'll give it that.
  • #134
  • Dec 5, 2015 7:27pm Dec 5, 2015 7:27pm
Quoting Bilstein
{quote} Honest opinion? Because they're supposed to. That's why the market exists for retail. None of us have the capital to actually impact the exchange rate of a currency and none of us trade on the market that matters. Retail-level access to decentralized, largely unregulated, market prices is nothing short of a wealth-transfer mechanism to facilitate the movement of capital from unsophisticated investors to sophisticated investors. My distaste with forums and "forex education" arises from this opinion of mine as they facilitate the unsophisticated...
Well said here! To me these are the 2 most important things said for traders looking for success.


"-I carry negative-equity trades (losers) for long periods of time."

The idea of cutting losses short and letting profits run is such an old way of thinking.

"-I don't use indicators."

Using less or no indicators means you understand price and how it moves. Sit and watch the M1 EU time frame for example for 2 hours each day with no indicators for a month and you will start to see things you never saw before. I don't want to compare it to the movie the Matrix but yes... in some ways it's similar.

Thanks for the insightful post here Bilstein.
  • #135
  • Dec 5, 2015 7:42pm Dec 5, 2015 7:42pm
Quoting shellsnail
{quote} This post is so cool. - I use stop losses (but usually I exit earlier.) - I use indicators. - I concern myself with entry prices to the pipette. - I look at charts throughout my entire trading session. - I sometimes add to a trade near to its extreme just before it hits my exit if conditions are suitable. - I close my losers quickly and carry winners for relatively long periods of time. I guess this here is the difference between intraday trading and longer-term trading? I think... most of the readers here would do well to stop the mental...

Good things said here as well!

Trading with a SL is a very safe way to trade. It's nice because you can always calculate your risk. The draw back here is the likely need for a high win % though. You also have to prepare yourself for potential large streams of losses with a tight SL. Achieving a high win rate with a SL trading method or system can be very difficult. Don't get me wrong... I have a friend that does 80% win rate using a SL system. Trading with NO SL can also work but has to be carefully calculated so you don't over risk your account in draw down. I personally choose no SL in my trading.
  • #136
  • Dec 5, 2015 7:50pm Dec 5, 2015 7:50pm
Quoting Mingary
A real job - long term - even at minimum wage, will make you more money than any venture into forex trading...
Why not have both? A job is a source of income, trading allows one to compounds those earnings even more.

In my opinion, managing one's own money using tried and true trading methods is the safest and most profitable investment for those who don't have $10 million to put into a managed futures fund.
  • #137
  • Dec 6, 2015 12:08am Dec 6, 2015 12:08am
I think it's worth it but a lot of hard work is needed. Treat forex as a hobby at first and don"t regard it as a get-rich-fast route. Still working hard every day trying to be consistently profitable. As other posters pointed out, even if one reaches a profitable state, having a real job on the side to rely on is a good thing.
  • #138
  • Dec 6, 2015 2:08am Dec 6, 2015 2:08am
Quoting Bilstein
{quote} Honest opinion? Because they're supposed to. That's why the market exists for retail. None of us have the capital to actually impact the exchange rate of a currency and none of us trade on the market that matters. Retail-level access to decentralized, largely unregulated, market prices is nothing short of a wealth-transfer mechanism to facilitate the movement of capital from unsophisticated investors to sophisticated investors. My distaste with forums and "forex education" arises from this opinion of mine as they facilitate the unsophisticated...
we are very much on the same page ...
  • #139
  • Dec 6, 2015 3:32am Dec 6, 2015 3:32am
Quoting Mingary
A real job - long term - even at minimum wage, will make you more money than any venture into forex trading...
Which brings us back to the most important question of all... (so) Why do you trade?

Between the lines it's been answered over and over again in this thread. Much like is in every other.
Time hides Nothing
  • #140
  • Dec 6, 2015 3:44am Dec 6, 2015 3:44am
Quoting dkrock
I started trading because I am a genius and it seemed like the ultimate game, where I could make money instead of points. I spent too many years fulfilling other people's dreams and agendas. I was rarely allowed to use my full potential because of the rules, standards, politics, and attitudes. Now, there is no one in front of me, and no one behind me. There is no one controlling me. There is no one telling me to stop. There is no one telling me it is good enough. There is no one telling me it is too much, too profitable, or too hard. The only limit...
haha excellent
Time hides Nothing
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