Now I know why 95% of traders are on losing side
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Thread: Now I know why 95% of traders are on losing side

  1. #1
    After reading numerous of those threads I realize why most traders do not earn money in Currency Market. It is because of the following reasons:

    1. Traders open a mini/micro account with $500 and then play volatile currencies with $1 lots. This really is a sure way to blow off account following account. Besides you won't make money trading a mini/micro account. The odds are against you. That is the reason why brokers permit you to open a mini/micro account. They know sooner or later you will get your leverage and/or stop losses incorrect.

    2. Most traders don't know when to take profits. They search for 50-100 pip profits instead of 5-10 pip profits. The market provides you plenty of 5-10 pips profits daily, but just a couple 50-100 pip profits a month. And the longer you stay in the market the bigger the prospect of the market turning and hitting your trailing stop reduction or stop reduction. I read a thread (25-50 ema) in which the originator of the system recommend that you put a 200 pip stop loss. Now that is plain silly. Profitable traders realize playing $10 lots and just searching for 5-10 pip profits are a safer way to generate money. If you can find a 5-10 pip profit daily then you can practically double check your account in annually. And I dont see the sense in entering two lots ($20) and then taking 1 lot ($10) profit at say 10 pips ($10x10pips=$100) then close the rest of the commerce after a second 20 pips ($10x20pips=$200) or allowing it run until it gets stopped put either by tracking stop or stop reduction. Can you realize that if you shut your commerce bit by bit your profit is actually getting smaller and smaller. You made just $300 while obtaining 30 pips profit. When you shut your whole transaction after just 20 pips you'll have gotten $400 (20 pips x $20Lot=$400).

    3. New traders all search for a trading platform comprised of Indiors. Indiors are aggressively and won't make you cash in a ranging market which happens to be 70 percent of their time. So many systems are based on the 4hr chart. Do you know how many pips the market is able to move in 4 hours? By the time you get into a trade the big dogs are prepared to make profit. That just leaves one with a small gain and sometimes even a reduction.

    4. Most traders don't know what's the driving force behind an currency. If you don't know what's forcing the Aud, and Jpy, and Cad then instead not trade those currencies since you are going to wind up getting burned as soon as the driving force varies course. (Aud get driven by goldprices. Jpy currently driven by carry trade. Cad driven by oilprices)

    5. However, the biggest mistake any trader can make it to take advice from an amateur trader. Amateur traders teach amateur traders to trade like amateur traders.

  2. #2
    You have a finite quantity of capital. That is the advantage that the broker has because he assumes your risks....

    Every transaction has the capacity to bring a substantial percentage of your account. My friends, is the reason money management is so essential. Rob Booker and Merlin have worried this in several posts.

    You need to do everything in your power to protect your capital. The fact is, the markets are random, regardless of what any indior or mythical fibonacci number lets you know.

    PROTECT PROTECT PROTECT. Get out of winners fast, because without funds you're only a sidelined player on the injury list.

    There will always be a few lucky winners that figure out more probable approaches to endure, and also make nice profits. But, those that trade without stops (or even without tight stops) will feel the pain.

  3. #3
    You have a limited amount of capital. That's the edge that the broker has because he assumes your risks....

    The broker more significantly understands the market is statistically not likely to gap down and up consistently or significantly enough to cause them to loose their shirts as a market maker. The worrisome time to them is through news events and a few brokers simply don't quote until things have stabilized. They create an absolute killing on spreads alone and on stop searching particularly breakeven stops.

    If anything that they may realize that the majority of retail traders don't have any clue about the complex sophistiion of the market. They also know greed and fear and newbies will be hard pushed to handle their emotions properly enough to put time and stay the course to actually examine the markets to get a grasp on how they actually work.

    Every trade has the potential to take a significant percentage of your account. That, my friends, is the reason money management is so important. Rob Booker and Merlin have worried that in several articles.

    CORRECT!

    You need to do everything in your power to protect your capital. The truth is, the markets are arbitrary, regardless of what any indior or mythical fibonacci number tells you.

    The truth is that the market is not arbitrary at all. It may seem random because of a lack of understanding as to why a movement is happening but there's obviously a reason behind price movement. I was in the randomicity camp until I got schooled by a pro. The trick is accurately determining what's driving the price action and coming up with a game plan for getting right into it provided that the payoff is worth the risk. To boil it down to some trick belies the extraordinary amount of wisdom it requires to correctly judge what's going and an why. It might be an economic news event on the forum calendar hitting or missing amounts, a merger/acquisition deal, a few central banker intimations, equity market upheaval,the force of stronger currency pulling dragging a pair up or down, commodity prices, ana reaction to fibonacci level. Overwhelming or boundless complexity should never be confused with randomness. Unfortunately it requires a great deal of diligent study and patience and then more study to learn how to always loe an edge with all these aspects that may have an impact on the speculation which causes price movement.

    PROTECT PROTECT PROTECT. Get from winners fast, because without capital you're only a sidelined player on the injury list.

    CORRECT!

    There'll always be a few lucky winners that figure more likely ways to endure, and make nice profits. But, those that exchange without stops (or even without tight stops) will feel the pain.

    The lucky ones are those that know how currency markets operate, from a top point of view. These are the diligent, seasoned traders that confidently find and take low risk and astute trades.

  4. #4
    This is straightforward.

    1. It's not about Risk or MM.

    2. It's simple as this. 95 percent are not imbeciles - we are talking of college graduates from various fields, non-graduates that have been effective in other jobs. Old and young men and women. Does this mean all don't understand anything.

    I always contended that if 95 percent of traders are not effective it usually means that the issue lies within our methods and not ourselves. Numbers do not tell lies. I can't remember when I failed woefully before I started out in Foreign Exchange trading. I've endured numerous emotional and financial injuries in the past just due to my using wrong techniques.

    It usually means that linear approaches are just not right for trading or 95% might have been successful. This is simple mathematics. If 95% neglected it is the procedure, not us.

    You can discuss money management, 1% of equity, I don't think George Sorros used 1% of his equity to transferred market against the British Pound in these days....not sure of this story but it did occurred. ... and (he created 2 billion or so out of 1 billion, not sure of actual amount. Definitely it wasn't 1% of his equity, but he bet all of his has with quantum system because he knew that 95 percent were wrong). He used something 95 percent don't know about.

    But 95 percent are made to be concerned a lot about MM, rather than methods of trade.

  5. #5
    I think it ill be come on due to

    money management

  6. #6
    Percentage of equity is among the most meaningless stats. In case you've got 500 in an account and trade 1 dollar lots, you merely lose the 500 dollars should you trade -500 points. It means that your not a fantastic trader. In case you've got 10,000 in your account and you trade 1 dollar lots. If you lose 500 points you lose 500 dollars. The individual who lost 100 percent of his account and the person who lost 5 percent of his account still lost the same sum of money. The same is true if they triumph. Trader A may have increased his account 100 percent and Trader B may have increased it 5 percent but they still made the same amount of money.

    The benefit of mini accounts and micro accounts is you have guarenteed that the minimum amount of money you can lose. Trader A possible loss is 500, trader B is 10,000. So who is the wiser???

  7. #7
    Quote Originally Posted by ;
    After reading numerous of those threads I understand why most traders DO NOT make money in forex. It's because of the following reasons:

    1. Traders open a mini/micro account with $500 and then perform volatile currencies with $1 lots. Now this really is a sure way to blow off account following account. Besides you won't make money trading a mini/micro account. The chances are against you. That is why brokers allow you to open a mini/micro account. They understand sooner or later you'll get your leverage and/or stop losses incorrect.

    2. Most traders DO NOT understand...
    1. Thats a plogical issue, not a broker difficulty

    2. Ummm need to point out here that most pairs range 100 pips daily, therfore there are lots of 100 opportunities daily, by simply trading off extremes at Supply/Demand. Although I do agree that a 200pip stop is idiotic. I mean how could it require 200pips to figure out you got it wrong?

    3. Ive written a bunch of all LEADING indiors, Im not sophistied sufficient to utilize exponential anythings or stochwhatevers, tho. Are you aware your statement about just how much price is able to move in 4 hours will be in conflict with your earlier assertation about profit stinks?

    4. I wasnt aware that gold priced dropped by all that much in the last half of 2008 to drive AUD to nearly half its worth.

    5. Absolutely.

    I think most men and women lose in forex since it's aggressive in nature and most people are taught to not compete, that showing up is great enough, which eduion stops as soon as you quit college and that working hard means 40 hours each week selling their labor to some other man.

    G.

  8. #8
    I'm not sure I know a lot of people who can follow the myriads of'trading principles' I see here on forum and triumph.
    Keep it simple is the name of this game, anyways, I daresay the issue isn't odd to forex, do we ask me questions such as, how many small companies that start up live after the initial two years consistently making profit? Or why can not I get up each morning to run at 5am always for an entire month?
    The truth is the origin of the issue is majorly in the mind, no matter what trading system you have if you cannot follow it, you will fail. People need to spend time looking outward and spend more time looking inward.

    Discipline forms personality and personality is what the majority of men and women lack.

  9. #9
    Trading requires at least 2000-3000 hours of learning, practice and revision on a demo account.

    95% of traders dont ever do that.

  10. #10

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