Forex Trading For Profit

Forex Trading for Profit

Why do we trade?

This is a question we must decide right from the word go. Do we start trading to make quick money, a desired lifestyle, investment or just something to do like a hobby?
Like a lot of us I wanted the money but quickly learnt there was more to trading than just placing a trade. Once a new trader understands this their dreams are crushed and is where the saying 90% of Forex traders fail comes in.

Some of these traders become gamblers constantly funding accounts in hope to win the big one. There are those that have made it rich by doing this is a very short time. My advice to those if you have made it quit while you are ahead because it was only pure luck to where you got. From zero to hero and back again. I can say being a millionaire for a month is worse than never being a millionaire at all.

Unfortunately, a lot just won’t get it but hey for one to make a profit in this business we need those, right?

Is it a zero-sum game??? There is a lot more to this answer than just plain black and white.

What is the reason why we would trade?

I put it down to making a profit, you are in it to make a profit. Whether you love trading or not it’s only for profit.
I will only be posting n this thread from now on since my style of trading is by far different than one would call “text book theories.”

However, thinking outside the box opens the gateway to Criticism.

The only way to trade is the way that makes a profit. No text book or right way claimed by has been guru’s will either make it for you or not.
I am an applied finance drop out purely because I didn’t want to be confined to the cookie cutter press. I was planning on becoming a certified technical analyst but have discovered you cannot think or are permitted to think outside the box. I have always wondered why every analyst whether that be fundamental or technical, I listen to on Blomberg has a different opinion on the market direction. Why is it that only a small percentage of analyst get it right?

I wanted to know how do banks and institutions trade Forex? What is market manipulation? What are market makers? Why is the system of exchange set up?

On this thread, I will be posting all things Forex in my own perspective.

 

1. Money management
2. Phycology
3. Market talk
4. Brokers
5. Live trades

I mainly trade AUD NZD occasionally EUR GBP Gold and Yen

I like to keep things simple. I trade Fundamentals as 1st and technical secondary.

Anyone posting in this thread please be respectful of others opinions. There is no “Right way” to trade and the only way is the way that makes a profit.

If anyone here has a unique way of trading please post it in here anything goes, but remember must be profitable. Trade explores welcome demo or live there is no difference to me, the market will move the same way on either.

Trade set ups welcome on any pairs and any style.

Trading has become a great passion of mine and a part of my life and this is the way I trade

That’s it for now will post whenever I have time.

Interesting thread. I'll keep an eye on the updates. Most people trade technical first so I am particularly interested to hear your views on fundamental trading

Subscribed Paul ... Eager to see the future discussion on fundamental things

The Haters...

Unfortunately there will be haters whether that be they hate success or they hate difference or maybe its just Ego that gets the better side.

This is why I have started this thread.

I have been on FF almost two years now and what i have seen is:

1. If you have a different view you will be smashed.

If you go against the grain have your own system or go against what is considered text book examples apparently you are not a trader.

2. You will only see green accounts in profit for short periods or commentators that dont actually trade

These same people that have been here for years still on the battle ground looking for success in this business blow account after account. It always amazes me to see a hot looking account with 100% gains in a few days or weeks. All applauding what a great trader.... Only to come back a few weeks later with the account at 99% DD. There will always be accounts either demo or live for short periods, the FF account will be there, but different TE funded or selective time periods.

But yet I have no credibility because I have a demo account as a Trade Explorer.

And this is what i am on about, and what I am dealing with...



193:1 leverage and current balance down more than 50%. 96% equity DD. The only reason why this account is still alive is just on pure luck. To top it off this guy trades for a living.

Demo VS Live

Does the market in a demo account, move differently to a live account? OR its it the same market?

Maybe the broker manipulates the Demo account so the trader wins and feels confident enough to trade a live account. Maybe a marketing tactic huh?

The fact is there is no difference trading between live and demo.

Whats that did I hear "duh" "live is different because you have the fear factor and psychology "

All BS

If you have fear of loosing your live account it means this:

You are either taking too much risk or you are not confident with your trading style.

When you can trade a demo account and a live account as no different from each other this means you are a trader.

This is why I have yet to make my live account visible, this has no bearing at the moment. If I put up an account with only 15 weeks or trading I am no different in what I am saying.

Draw down - Actual VS Relative.

We can measure draw down (DD) to the opening balance or to the current account balance. Lets say one account had a 25% equity DD but has made 100% profit.

Put in figures. opening balance $50,000, profit $50,000, current account balance $100,000, equity DD @ 25% $25, 000 = actual balance of $75,000. At first sight a 25% DD seems like a big deal. I know it would be if it were my account. But taking into consideration the initial deposit of $50,000 its really not too bad at all. Thats all good to say but there will come a time when one has to decide when to cut a loss. And, what do we trade for. If it were 25% on opening balance, we have a problem because its too much for sustainability. Even then it will all depend on market sentiment and fundamentals of current open positions.

Forex, the game of risk management

Its all about risk vs growth.

What are you prepared to risk over growth. Should we risk 10% for a 10% monthly return? Sometimes it really depends on what you have to loose. If you are funding $100, to some this will be less than pocket change and for others its a lot.

Just think if you were trading with 1 million would you be prepared to have a 50% DD? For me no way!

Maybe there are so many losers just based on that reason alone. Maybe we need to treat that $100 like its a million.

Now this is the catch. lets say I am an investor and I am looking for a 2% return on my million$$$ account. That would make me $20,000 per month. Not too bad at all.

So I am investing $100 and my return will be $2. Its kind of laughable and a complete waste of time trading all month for 2$. So what do we do we risk the whole $100 so we can double the account in a month and viola at the end of the month we need to fund another $100.

LEVRAGE

Leverage the big killer. There has always been debates on using leverage but what I have found is in the long term high leverage trading is not sustainable.

Just ask yourself one question when Goldman Sachs puts on a multi million dollar trade do you think they would use 100:1 leverage with a tight stop. Yeah right ???

Of course there are traders that trade high leverage but continuously get stopped out and then in one unexpected flash crash have their entire account of some times 1000's taken to the cleaners. Then the whole blame of corrupt brokers stop hunting or spread widening or what ever reason to fork out something to blame. But, was only the result of having high leveraged positions and price jumping stop loss's.

One would be better of trading with 0.5:1 leverage and never using a SL. This kind of trading is frowned apon but it seems these kind of traders are pretty much the only successful traders around, and by means when I say successful a success of 20 years.

The haters will always hate and the Ego's will play God...

Aussie GDP

The worst reading since 2011

The Aussie economy still on a slow but increasingly decline.

This has nothing to do with wave analysis or resistance levels.

The fact is the Australian economy is on a down trend since 2011 and will continue to do so. Government waste spending is what has caused this.

We have gone through the biggest commodity boom in history and you would think this country would be rich. Unfortunately it all goes to the wrong people and spent in the wrong places and now have dug its self in a hole that cannot get out.

There have been some economist predicting the AUD to crash this year reaching under .60. I have to agree with this and I think the Aussie economy will stay at this low point until around 2022.

AUD remains short on the highs.

With the feds hiking though out next year its quite possible for the US interest rate to surpass that of Australia. Now where do you think the money will flow?

If a safe haven currency has more yield potential than a risk currency when does money flow?

excellent right up and you have a trade explorer, not a scammer or fraud, look at other aspects rather then some stupid indicator. With the Live and Demo thing you might get some criticism due to the psychology aspect. However, for someone who has traded live for a while demo and prod are the same. The most important thing here is the way you trade demo is exactly the same as the way you trade prod. Same style , risk. If you keep it exactly same the psychology between the two its is minimized. Look forward to the thread Bro , Aussie , Aussie

Yes thats right demo and live must be traded equally. This is the problem most traders have. Its easy to get carried away with a demo and treat it like a pc game. If you loose you can easy start a new Game.

The way i look at it if you cant do it on a demo you cant do it live. I am pretty much taking the same trades with my demo and live accounts and the % are roughly the same.

When I 1st started trading I didnt trade demo I just jumped right into the market thinking I will made 100k out of 1k in a few months but lost it all in 3 days. So what does one do fund it again with 2k and it keeps going untill one understands forex is not gambling. If you have the ability to understand this and learn properly it doesn't take long before you are back and then trading with the right mind set and being profitable.

Were the US rate hikes already priced in?
I was hearing alot of pro analysts saying the US Dollar will take a dive when the feds Hike rates, but funny enough it did quite the opposite. Kathy Lien from BK Asset was one of them, I find it funny how they quickly try and make something up to counter what they previously said.

Why will the Dollar go down? Its been down for over 10 years and investors are starving for a boom. The US holds the most promising time for money to flow into the USD. The rest of the world seems uncertain with Europe being the center of uncertainty. The UK leaving and its looking more so that Italy and Spain will follow Suit. This will leave Europe on their knees begging for the world to help them in 5 to 10 years time, maybe even sooner.

3 or 4 Hikes next year for the States. We may be facing the old story of the boy who cried wolf, as the feds have lost a certain ammount of credibility through this year as only 1 hike was made.

See my latest Post

Sorry, I did not read your whole post, but this statement is total nonsense. You are talking about haters but spread untruth facts.
It might not affect every kind of strategy in the same way, but SLIPPAGE is THE BIG GAME CHANGER between demo and live. This can't be emphasized enough - how could you ignore that!?

I am not moving to the other extreme and say trading demo is a waste of time, but using a demo account for proof of success is naive and sadly misleading.
No hate, but my experience and do not worry - I am owning awesome profits on live based on longer history than your demo account, so I can support and prove my experience in case it is needed.

Why is it that 95% or traders blame slippage spread widening for their trading losses? As a trader we all have to work around these issue's. We work with what has been provided. If you are trading a system that tries to scalp points out of a minute chart my hat comes off to you. But from my experience that kind of trading hasn't worked for me and I haven't seen anyone else making profit that way either, apart from marketers selling useless scalping EA's.

So unless you are trading a tight scalping strategy slippage is not a problem.

Work around these issues? You have to include them as part of your strategy! But that is not possible on demo. Simply, put the same strategy on live and demo in parallel and the world will be a different one ...

As I said, it is affecting strategies in an unequal way, but it is affecting all strategies.
Of course I am not earning on one strategy alone, but you haven't seen scalpers earning longterm? I am going to pm you the proof...

Thats right, trading is working around what been provided. As long as your strategy makes more than your brokers slippage and spread there is not a problem. So trading demo is also not a problem. Its up tp the trader to know and research this when developing their strategy.

Not to mention your strategy may work on a cent account but then try it trading the same strategy on a million dollar account and you will find slippage will kill you. Its too easy for your broker to fill a cent order at lightening speed but when big money is a stake its completely different.

Is this the EA you are using? https://www.mql5.com/en/market/product/9592

Also after studying your account this kind of system may be good for an investor over long term. What i like to trade for is a consistent profit. Your account shows extended periods of little or no growth and if one was trading for a living there will be times of famine. From Jan through to june 2016 there is no growth, and also current period from July only 4%. You had a nice surge in December of 30% but has tapered off.

For me I could not use this system to live off. For an investment over a 5 year period maybe its great. I would prefer to see a constant growth each month.
Something like this.

Exactly THIS is the main reason, why 82% of traders loose money! There is no jack of all trades system. As long as people are not fully accepting this, majority will continue blowing accounts/loosing money. (I am happy taking their pips of course)

Having a "constant" profit each month using one single system always(!) means the use of some kind of grid/recovery/martingale approach because NO system is gaining all the time on a longer timeframe without meeting bad market phases. Matter of fact, no need to discuss that.
In consequence your account is always at higher risk or at least suffers from comparable higher drawdowns. The key for each system is to PRESERVE capital (including drawdown) in bad market phases, while gaining on good ones.

This is by the way the reason why all the fancy commercials showing awesome constant profit accounts in a short period of time are inevitably crashing longterm - as really every system will meet its bad/critical phase sooner or later. Time enough to earn on the loosing majority by selling copies to them until it happens ..
Though you have studied my example system you however missed the most important aspect here. A DD of below 20%, something I bet you will hardly find with a similar history and gain on a live account.

So what's the solution of earning "regularly"? DIVERSIFICATION! Do not put everything on a single horse. Create a basket of strategies averaging your gaining curve. That is the most valuable advise you will find around here!

Even then there is no guarantee, as the market is evolving. Manage your losses, not your gains or you will never get out of the 82% pool.

Hello Paul I trade supply and demand, the ebooks on Zero sum game as well as How Banks and Institutes enter the market are favorites of mine. I think this will be an interesting thread if not controversial as you are introducing topics that will surprise traders. I look forward to your charts.

NEW YEAR 2017

My message for all in the next year 2017,
follow your dreams take action and be persistent and success will follow.
Many pips to all traders in the new year.
Please share to inspire all.

https://www.facebook.com/ForexTFP/ph...type=3&theater

Forex is place where we can earn money very quickly. So most of the traders look for making quick money overnight. But ultimately they fail to make money from forex as they don't follow money management. so we all need to have good discipline during trading in forex

Totally agree and is what i will be advocating here and teaching.

2016 account performance.

New trading year wont start for me until late January.

Sell Limit placed @ 0.73000 AUD/USD 2:1 leverage TP @ around .71000 SL @ manual close discretion