Forex Daytrading a Losing game?

[Wallace]

here's 2 fx links that contain daytrading threads:
http://www.forex-tsd.com/
http://www.moneytec.com/index.php
and see below

there's several matters:
is the would-be trader day-trading oriented

a single vertical chart line represents an fx day, there's 24 60min bars, 288 5min bars,
1440 1min bars within the day bar; how much time needs to be spent in front of the
monitor examining 1440 bars or even 288 bars every day versus examining 1 price bar

I wouldn't use the word random, but the PriceTime Movement is definitely irregular,
however that doesn't mean it isn't tradeable

is ones work hours and lifestyle conducive to active forex hours trading

the question one must ask and answer for oneself is:
'which is easier to trade, single or many price bars ?'

consider that 'trade' encompasses: work, home, lifestyle, new business, family relationships
and obligations, income ?, capital requirement, losses, time to profitability, time to
consistent/dependable profitability, time zone, happiness/unhappiness, etc

yes, perhaps the author over-criticises day trading, on the other hand he's saying
'I'm a happy man because I found Day-to-Days trading to be profitable for me'

ElectricSavant no longer posts on ET, use Search to read his posts
he now blogs what he's doing fx wise -- using money managers

"Time
October 2nd, 2007
You know… time is precious. I experiment around with my time and I have discovered that
indicators are a waste of my time. I prefer EA’s and to put my accounts on automatic.
Waking up every 4 hrs 24/6 is not healthy and I removed all indicator manual trading from
my life."
[EA's - Expert Advisor: auto trading system coded/programmed into MetaTrader 4]

 

[IluvVol]

Quote from Cesko:

I dont have to prove my profitability to anyone except myself and family.

So, do you have a 5 or 10 year (or plus) track record scalping and can show that you are profitable above a typical equity index return?

Honestly speaking, I am not interested in how profitable you are, and how you trade.

IluvVol can you see your own bullshit above????
By the way, Kiwi is right, the article is rubbish just like your dribble.Anekdoten's chart is perfect example of setups you could recognize if you actually traded.
He does trade. You, Sir, don't. Good day.

Do you recognize that you pulled those above quotes completely out of the context and even from different posts?

a) I did not ask him to show off his trading record in this thread. All I asked was whether he has got a long enough scalping record that he can say it works for him?

b) This thread is about a discussion of short term trades versus longer-term position trade setups, not about any profitability contest. Thats why I said I dont have interest in knowing how profitable he is. I was interested in knowing what arguments he has that are in favor of short term trading methods over position trades OTHER than his track record (which cant be proven anyhow and is therefore worthless to note).

c) Is this all you can contribute in a meaningful manner? Listen to yourself:

1) x is right the article is rubbish
-> WHY is it rubbish THATS the point
2) y' chart is good and can make money
-> HOW can any setup be recognized. THATS at the HEART of this discussion. I assert that most of the time patterns can NOT be recognized a-priori because those patterns SIMPLY RELY ON PAST PRICES and past prices dont lie in the future per definition ;-) So, how do you want to know beforehand that a pattern develops? ;-)

= So, why dont you contribute meaningfully to the discussion instead of making incorrect assumptions about someone trading or not trading. By the way, if interested we can chat online and I will show you my business card and other proof that I am a successful sell-side trader for a large bank. Thats just as an aside to tame your arrogance.

 

[IluvVol]

Mekas,

As an example, I would believe that someone who shorted financials such as GS or ML few months ago to keep such position for several months would have done way better than a "successful" scalper in such stock. Both methods require "successful" traders in order to compare apples with apples. Investors/Traders who have an edge (which 90-95% who trade DONT) can trade cycles/trends whether it be short term or long term. However, just from what I observe on a daily basis at our prop desk (working for a sell-side firm) and knowing the trading technique of most highly successful commodity, rates derivatives, equity traders I can say FOR SURE that most of the money is made with long-term position trades rather than having a Tudor, Hunter or whoever scalp the markets for pennies. THat some blew up has to do with their risk management and not their basic investment/trading horizon.

To come back to your first point, indeed, for any average investor (sorry but as you probably also admit 90% of guys in here are not any smarter or more educated than our average investor) I can only recommend to hold stock long-term, anything else will significantly reduce returns over time.

Sure "playing" the markets is fun, the more often more fun. And unfortunately thats how most traders approach trading, not as a serious business but as a game to get their kick and excitement. For those scalping is the perfect name of the game, and for those technical analysis is perfect, cause they dont have to use any brains, nor need to analyze the markets. All they need to do is to read some numbers off an indicator and short or long, which even idiots can do. To be fair, yes of course there are some highly successful traders who make a very good living scalping the markets. (and even then I dont think it would beat a highly successful trader who position-trades). But come on, 90% of people in here lose money pretty much every single day and come out and even have the guts to demand from others to prove their P&L, thats just ridiculous. To most, I argue, taking longer-term positions with the right money and risk management will VASTLY increase their success rate. Heck, why would I challenge a successful guy to change his method if whatever he does works for him? BUT the OP's article was not targeted towards successful traders but the "average crowd".

Quote from mekas:

"all" my criticism is invalid? So you actually believe that if everyone knew the opening price of some commodity/currency/security tomorrow everyone would be able to be a millionaire as a result of that knowledge?


"very randomly"? So there are degrees of randomness and since "very" is less than "completely" you concede that prices in the short term are in fact not "completely random". If stock prices were able to be completely modeled by Geometric Brownian Motion with an upward drift then you could have no trading/investing edge at all, and would only make money long term by buying and holding a large collection of stocks.

Why do random movements in the short term only "kick you out of trades". Wouldn't random movements also help you hit your profit target as well?
The fallacy in your argument is that just because you can't predict where the price is likely to be for every 5-minute period during the day this doesn't mean that you can't predict price movement for selected 5-minute periods during the day. A short term trader is not compelled to always be in the market predicting the next 5-minutes. The trader needs only to wait until such a time the near term price movement has a higher probability to go in a certain direction and trade during that time.

 

[melo]

IluvVol, I heartily agree with you based on my own buy & sellside experience, and speaking with FX pros in bank and academic research, bank prop desks, and - perhaps more pertinent to GaryN - retail platform providers.

 

[bugscoe]

The only difference I see between scalping and longer term trades is time compression.

What may be a 2 min trade for some may be a 2 week trade for others with the reasons for entering and exiting being the same...candle formation, fib level, key sup/res level, etc.

 

[Midas]

IluvVol,

Out of curiosity, you said you work for a sell side firm with a prop. desk. Are you a sell or buy side trader?



The reason I daytrade:

I am willing to use leverage intraday that I would never use longer term. This is because intraday I am able to micro manage or "baby sit" my positions in a way that I never could over a longer time frame. Also, I am not exposed to unforeseeable events that I can not react to immediately.

The point I would like to bring to the discussion is since I am able to use higher leverage intraday my day trading returns far outpace any returns that I have been able to make trading longer time frames.



There is more than one way to skin a cat.

I have found that in trading as with just about every other aspect of life, you are better served integrating and incorporating as many ideas, methods, strategies, outlooks, philosophies, etc. as you can into your overall trading and investment activities. Day trading is just one cog in this machine, but for many of us a very important one.

 

[skot99]

The very best and biggest fx prop traders in the bank trading medium time frames, few weeks to months, are generally correct on their calls 1 out of 3... and these are the banks that have the cash, the order flow, the research, the contacts in the central banks, etc etc... the writer of this article is a liar as is anyone claiming they can do better than 1 in 3 swing or position trading. Personally, in scalping, I am correct better than 70% of my trades. It all comes down to money management. Nobody can predict the future. Life and markets, peope et al operate in patterns that can be observed. Find something you can see and trade it... I would say scalping is a whole lot easier to do and it is designed for a small size... don't let some schmuck trying to make a living making shit up for ezines tell you something that you can only find out for yourself....

Quote from GaryN:

I keep running across articles like this:

Having been a forex trader for 25 years it amuses me when I see writers defend day trading. They say it really can make money! - Of course they have no track record to back it up just empty words. Fact is you are guaranteed to lose in day trading for one simple reason:

All Movements in Short Time Frames Are Random

Trillions of dollars trade hands each day and million of trader’s trade, all with different objectives and opinions and to say that you can predict what they do in a few hours or a day, is ridiculous. You can’t.

Volatility takes prices anywhere in a day and support and resistance levels are meaningless, so you would have the same success rate flipping a coin.

It’s absolutely impossible to get the odds on your side – PERIOD

This is of course why you NEVER see any of the vendors selling these systems give you a real time track record – Why?

Because they don’t dare trade it!

They would rather write some enticing copy and appeal to the greed and naivety of traders and make their money selling you the system – they win you lose – period.

But I have seen a track record you may say and yes will have, but it’s NOT real.

If you check the disclaimer on it you will see there all hypothetical!

What does that mean?

It means done in hindsight knowing the closing prices!

Now who can’t do that it’s not exactly hard.

If we all knew tomorrows price today we would all be millionaires but we don’t – and neither do we know what will happen tomorrow, so there not worth the paper their written on.

Day trading is a good story but the logic doesn’t add up and the biggest lie about day trading is you can make money at it longer term.

If you could you would see a track record or the vendor would shut up and trade it himself and not need your few hundred dollars.

If you want to win

Appreciate that trading is an odds game and to trade the odds you need to trade over longer periods, where the data is valid and you can have a chance of getting the odds on your side.

Finally

Don’t day trade, get real and trade with the odds on your side.

Article Source: http://EzineArticles.com/?expert=Kelly_Price


I am exploring currency trading and after watching for a couple of weeks it does appear to me that currency fluctuations are more random than stocks and indexes. The books I have read are almost unanimous in saying that you must trade longer term to be successful in the currencies. Does anyone have links to traders who are daytrading currencies profitably?

 

[cabletrader]

-

Reviving some old threads skot99?

 

[TraderZones]

Quote from GaryN:

I keep running across articles like this:

Having been a forex trader for 25 years it amuses me when I see writers defend day trading. They say it really can make money! - Of course they have no track record to back it up just empty words. Fact is you are guaranteed to lose in day trading for one simple reason:
Finally

Don’t day trade, get real and trade with the odds on your side.

Article Source: http://EzineArticles.com/?expert=Kelly_Price


I am exploring currency trading and after watching for a couple of weeks it does appear to me that currency fluctuations are more random than stocks and indexes. The books I have read are almost unanimous in saying that you must trade longer term to be successful in the currencies. Does anyone have links to traders who are daytrading currencies profitably?

The author of the article, Kelly Price, has written a number of forex trading articles to sell their website and also how to get an erection. Sounds like a trading expert

 

[skot99]

Perhaps, not sure Cable Guy... I am one bored SOB to be making all these posts in this isane forum though, no doubt about that... like the picture of the dead guy btw...

Quote from cabletrader:

-

Reviving some old threads skot99?