You will see them all over the net forex day trading and scalping systems offering you a regular income and the potential to earn money from the secrets they have discovered - but here is one secret you won't find revealed by these vendors. To find out what it is read on.
Forex scalping and forex day trading systems all lose - want the proof? Read the disclaimer below you will see it or a similar one on ALL the systems sold so here it is:
"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".
So you have probably gathered what the above means - the forex day trading systems you see with huge regular profits have NEVER been traded. They have been simulated on past data - knowing where prices went.
Well that's really hard! Could you do it?
Of course you could - anyone could and you could become a millionaire on paper, alas you can't spend imaginary profits.
Its obvious why day trading is doomed to failure and that's quite simply the time span is to short and there is no reliable data to work with, prices can and do go anywhere in a few hours or a day.
You may as well toss a coin as it's simply luck that will determine whether you win - but keep in mind luck doesn't last forever and you will lose eventually.
People buy these systems because there a good story, so is James Bond but I don't believe its real.
Anyone buying one of these mechanical trading systems (if there still tempted) should ask themselves one question:
If the vendor can make so much money with no effort, then why is he selling it for a few hundred bucks or less? The answer is - he knows it doesn't work but knows there will be another naïve, greedy or lazy trader who will buy it.
Don't make this mistake.
If you want to make money in forex trading, you can but you must have reliable data and that means forex swing trading, or long term trend following.
Do your homework, get the odds on your side and you can make money.
Leave forex day trading to the losers in forex trading and concentrate on being a winner. I have never seen a forex vendor tell anyone this day trading secret - Wonder why!
Tuesday, October 28, 2008
Forex Scalping Systems
Forex scalping is a method of trading price moves within daily periods, with the aim of making small profits with low risk. The ultimate aim is to make big long term profits. It's the most popular form of trading for novice traders - let's look at the basics of success using this method.
Unfortunately forex scalping sounds good in theory - but does not work in practice.
There are however numerous vendors claiming it works all with great track records, so how do they do it?
Well the disclaimer below will answer this question, take a read and you will see why these track records are not all they appear to be:
"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".
Find a forex scalping or day trading system online for sale with a track record of gains and your almost certain to see the disclaimer above (Or similar wording) and of course there is then a problem with the track record - in term of you making profits.
The track record has been simulated in hindsight KNOWING the closing prices.
I am sure by 10 year old daughter could beat George Soros, if she could trade knowing the closing prices however, that's not reality - the reality is trading real time not knowing what will happen next is very hard.
So why doesn't forex scalping work?
The answer is easy, the time period is to short to get the odds on your side, all short term volatility is of a random nature and daily ranges cannot be used to get the odds on your side.
The problem is there are traders in every corner of the globe, all with different forex trading systems, strategies, varying levels of expertise, with diverse opinions and you can throw emotions into the mix as well.
So millions upon millions of people trading and you are going to try and calculate what this vast diverse group will do in a few hours or minutes? Good luck to you, if you fancy a try, I have been trading for 25 years and it's a challenge I think is impossible.
Many novice traders simply throw themselves head first into forex scalping without questioning its dumb logic.
They follow systems that have never been traded and then wonder why they lose - don't try it, unless you want to wipe your equity out.
The first thing you need to do is trade longer term, where you can calculate the odds.
You then need to be realistic about what you can make and get the right forex education.
You can make a lot of money in forex trading and in some instances the money made can be life changing; it remains one of the few ventures in life where you can start with small stakes and get rich, just make sure you get the odds on your side first, learn the correct information and you can enjoy forex trading success.
Unfortunately forex scalping sounds good in theory - but does not work in practice.
There are however numerous vendors claiming it works all with great track records, so how do they do it?
Well the disclaimer below will answer this question, take a read and you will see why these track records are not all they appear to be:
"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".
Find a forex scalping or day trading system online for sale with a track record of gains and your almost certain to see the disclaimer above (Or similar wording) and of course there is then a problem with the track record - in term of you making profits.
The track record has been simulated in hindsight KNOWING the closing prices.
I am sure by 10 year old daughter could beat George Soros, if she could trade knowing the closing prices however, that's not reality - the reality is trading real time not knowing what will happen next is very hard.
So why doesn't forex scalping work?
The answer is easy, the time period is to short to get the odds on your side, all short term volatility is of a random nature and daily ranges cannot be used to get the odds on your side.
The problem is there are traders in every corner of the globe, all with different forex trading systems, strategies, varying levels of expertise, with diverse opinions and you can throw emotions into the mix as well.
So millions upon millions of people trading and you are going to try and calculate what this vast diverse group will do in a few hours or minutes? Good luck to you, if you fancy a try, I have been trading for 25 years and it's a challenge I think is impossible.
Many novice traders simply throw themselves head first into forex scalping without questioning its dumb logic.
They follow systems that have never been traded and then wonder why they lose - don't try it, unless you want to wipe your equity out.
The first thing you need to do is trade longer term, where you can calculate the odds.
You then need to be realistic about what you can make and get the right forex education.
You can make a lot of money in forex trading and in some instances the money made can be life changing; it remains one of the few ventures in life where you can start with small stakes and get rich, just make sure you get the odds on your side first, learn the correct information and you can enjoy forex trading success.
Profits With The 80 - 20 Rule
The 80 – 20 rule was not devised for Forex trading - however if you apply it in your trading, you'll instantly increase your profit potential. The rule is simple to understand and apply - and all Forex traders should use it.
So, what is the 80 – 20 rule, and why is it so powerful in terms of making Forex profits?
The Logic of the 80 – 20 Rule
In the nineteenth century, Vilfredo Pareto, an Italian philosopher, observed that a small section of the population held most of the money and power. He postulated that in most countries, 80% of the money and power was controlled by around 20% of the people. Therefore, 20% of the participants accounted for 80% of the results.
The 80 – 20 rule applies to many other areas of life - including Forex trading, and in simple terms, the key point to consider is this:
80% of your results will be generated by 20% of your efforts.
This also means that:
20% of your results will be generated by 80% of your efforts.
In Forex trading, it’s a fact that most traders make this critical error – they trade too much - and try to force results by working too hard.
Here’s what you need to do, to apply the 80 – 20 rule in Forex trading, and increase your results:
1. Cut out short term trading - like Forex day trading. In day trading, you trade frequently - but it simply doesn’t work. This is because all short-term volatility is random - and you can never get the odds in your favor.
2. Only trade significant technical patterns - such as critical breaks of support and resistance, with your Forex trading system.
3. Risk more per trade on the “good trades” - up to 20% is OK. Remember, risk goes with reward - and you need to take meaningful calculated risks, when the odds are in your favor.
4. Don’t diversify! Forex traders think this spreads risk, but all it does, is simply dilute profit.
In terms of your Forex trading strategy: Focusing on the above will make you more money – but you’ll also reduce the effort you put in.
Shift your emphasis to long term trading - and only trade the best signals. By doing this, your workload - and the amount of time you need to spend on your Forex analysis will be reduced.
If you apply the 80 – 20 rule to your Forex trading in the above way, you’ll cut the effort you put in. You’ll also increase the profits you make - and that’s what all Forex traders want!
Cutting the Effort You Put In and Getting Bigger Rewards
Many people think that the more effort you put in, the better the results you obtain. This is true in many areas of life - but not Forex trading! Here you are paid for being right with your Forex trading signals - that’s all.
Also, don’t fall for the myth that the more you trade, the better your chance is of having Forex trading success. This is simply not true - because the big trades, with the best ratio of risk to reward don’t come around that often.
Incorporate the 80 - 20 rule in your Forex trading strategy, and watch your profits soar.
So, what is the 80 – 20 rule, and why is it so powerful in terms of making Forex profits?
The Logic of the 80 – 20 Rule
In the nineteenth century, Vilfredo Pareto, an Italian philosopher, observed that a small section of the population held most of the money and power. He postulated that in most countries, 80% of the money and power was controlled by around 20% of the people. Therefore, 20% of the participants accounted for 80% of the results.
The 80 – 20 rule applies to many other areas of life - including Forex trading, and in simple terms, the key point to consider is this:
80% of your results will be generated by 20% of your efforts.
This also means that:
20% of your results will be generated by 80% of your efforts.
In Forex trading, it’s a fact that most traders make this critical error – they trade too much - and try to force results by working too hard.
Here’s what you need to do, to apply the 80 – 20 rule in Forex trading, and increase your results:
1. Cut out short term trading - like Forex day trading. In day trading, you trade frequently - but it simply doesn’t work. This is because all short-term volatility is random - and you can never get the odds in your favor.
2. Only trade significant technical patterns - such as critical breaks of support and resistance, with your Forex trading system.
3. Risk more per trade on the “good trades” - up to 20% is OK. Remember, risk goes with reward - and you need to take meaningful calculated risks, when the odds are in your favor.
4. Don’t diversify! Forex traders think this spreads risk, but all it does, is simply dilute profit.
In terms of your Forex trading strategy: Focusing on the above will make you more money – but you’ll also reduce the effort you put in.
Shift your emphasis to long term trading - and only trade the best signals. By doing this, your workload - and the amount of time you need to spend on your Forex analysis will be reduced.
If you apply the 80 – 20 rule to your Forex trading in the above way, you’ll cut the effort you put in. You’ll also increase the profits you make - and that’s what all Forex traders want!
Cutting the Effort You Put In and Getting Bigger Rewards
Many people think that the more effort you put in, the better the results you obtain. This is true in many areas of life - but not Forex trading! Here you are paid for being right with your Forex trading signals - that’s all.
Also, don’t fall for the myth that the more you trade, the better your chance is of having Forex trading success. This is simply not true - because the big trades, with the best ratio of risk to reward don’t come around that often.
Incorporate the 80 - 20 rule in your Forex trading strategy, and watch your profits soar.
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