Are there profits in forex daily trades?

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Old Feb 6, 2009, 5:33pm   #1
 
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Are there profits in forex daily trades?

Hi folks,
I have been trying to trade forex intraday for the last 2-3 months and to be frank all i have to show for it is a big fat ZERO in my account.
Ok i accept I'm still learning but does anyone actually make money from fx daily trading or shall I look at other instruments.
Will appreciate your frank opinions
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Old Feb 6, 2009, 6:18pm   #2
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The answer, of course, is yes. But then you're not really asking a question so much as voicing your frustration. You wouldn'st have started trading forex had you not had some evidence that people make money.

That said, why did you pick forex and what made you go with day trading?
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Old Feb 6, 2009, 6:29pm   #3
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Hi Joe,
Welcome to T2W.
John is absolutely right and, furthermore, while forex may or may not be the right market for you to trade, don't be fooled into thinking it's easier (or harder) than any other market. There is no such thing as an 'easy' market but, likely as not, there is a market that will suit you better than others. Finding it could take time. On a positive note, if you're new to trading and you've managed to break even after three months, then you're doing a whole lot better than most, and easily puts you in the top 50% - or even 30% - of traders!
Tim.
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Old Feb 6, 2009, 6:40pm   #4
 
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Joe1306 started this thread John & Tim
U are absolutely right-I'm frustrated. I decided on fx trading after a discussion with a friend. Numerous books and seminars down the road we are both finding the going rather interesting - I am not slow and I had it in mind that fx would be a straightforward profit generator but it sure is hard work and does not really respect intellect or ability.
Do you have any suggestions on how best to consistently make good trades on fx? there's a question for u
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Old Feb 6, 2009, 7:02pm   #5
 
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Originally Posted by Joe1306 View Post
John & Tim
U are absolutely right-I'm frustrated. I decided on fx trading after a discussion with a friend. Numerous books and seminars down the road we are both finding the going rather interesting - I am not slow and I had it in mind that fx would be a straightforward profit generator but it sure is hard work and does not really respect intellect or ability.
Do you have any suggestions on how best to consistently make good trades on fx? there's a question for u

First thing you got wrong was to think it would be straightforward - we all would be winning. It doesnt need intellect it needs patience and the ability to take a loss. The easiest thing to do is to let a loss run and run and hope it comes back. To be consistently profitable takes time and will cost - the price of education. Dont trade short tf like the 1m they will burn ya - i now trade 1h tf intra on 3 currencies and is easier as the trends are easier to see. Trade with short tf and you panic and run and lose - I been there!!
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Old Feb 6, 2009, 7:11pm   #6
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Originally Posted by Joe1306 View Post
Do you have any suggestions on how best to consistently make good trades on fx? there's a question for u
If you're asking for a quick 'easy fix' type of solution, then the answer is an emphatic no. That is to say, I've been in this game for seven years and I've never come across one yet. If you decided you were interested in art, how long would it be before you could consistently make good paintings that people wanted to buy? First off, you'd have to study your craft, work out whether you prefer oil, acrylic or watercolour etc. Being technically proficient is just the start, then you have to look at what artists in the past have done as well as what the best contemporary practitioners are doing now. Tentatively, you'll begin to find your own style and, if the technical quality is there and the imagery is right for the market you want to sell to - along with the price - you might begin to earn a few pennies. Well, the bad news is that trading is harder. I know, because I have an arts background. If you're to stand even the slightest chance of making consistent profits trading, you're going to have to knuckle down to some serious graft. If I'm honest, if I had any idea of what I was getting into seven years ago, I would have walked away and found an easier way to make money - like selling life insurance door to door. And yes, I've done that too. Am I trying to put you off? Yes, absolutely. If all it takes is a post like this to deter you, then I doubt very much that you'll make it as a trader and I will have done you a huge favour. In keeping with my earlier post, I like to end on a positive note, which is: don't take my word for it, ask the pro's on here and see what they say. You never know, they may just tell you that I'm talking out of my backside (I often do) and that trading is a complete doddle; mere child's play. But I wouldn't bet on it.

Tim.
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Old Feb 8, 2009, 12:24pm   #7
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Hi Joe1306,

I'm new to this site and yours is the first thread I opened and it sounds like your having some challenges.

Here is an article that I came across from another site which might help you understand where you are at and hopefully help relieve some of your frustration.

Quote:
The six stages of a developing trader are looked at below.

Stage One: The Clueless Trader

This is the first stage when you enter trading. You may have picked up a book on technical analysis somewhere, heard of a day trader making millions, or got lucky in an earlier stock investment. After all, how hard can it be? The money sounds appealing and the freedom to be independent sounds attractive.

I don't mean to shatter anybody's dream but those who succeed in trading are the minority! Approximately 90-95% traders lose money. This is the cold hard facts. In the first stage, every trader is optimistic. You open a direct access brokerage account and the sound of Level II, ask/bid, and market makers make trading sound like hi-tech video game. In reality you have no clue. You will buy just to see the market reverse and you will short just as the market starts to rally. Most of your trades are done emotionally. You buy just because the markets feel strong without any logical reason. You are in the unconscious incompetence stage. You have no clue how the mechanics and psychology of trading works. What's worse? You are not aware that you don't know. Most traders will blow their entire account at this stage.


Stage Two: The Rookie Trader

In this stage you have lost enough money to realize what you are doing is completely wrong. In other words, you start to realize that you don't know. You will then devour every trading book available. You will study and purchase Technical Analysis of Stock Trends by Edwards and Magee believing price patterns are the Holy Grail. You will memorize every technical pattern known to man. You will read about the ADX, moving averages, Fibonacci lines, pivot points, MACD, Bollinger Bands, channels, etc... You will go through the "help" tab on your data vendor to read about every single technical indicator available. You will plot them on your charts and spend hours looking for an indicator that works. You will be extra confident now because think you have found the magical technical indicator.

Yet, you still continue to lose money everyday. You realize that your indicators are lagging and that every other new trader is probably looking at the same thing. You realize that you are the sucker.


Stage Three: The Developing Trader

You start to realize the amount of work required and the immense learning curve that you must overcome to understand the markets. At this point, traders may find it overwhelming and quit. Stronger minded traders will push their motivation harder to start their second spurt for knowledge. Hunger and passion is needed to clear this stage. You will look for reference online, join mentor programs, chat rooms, and seminars. You realize the necessary elements needed to develop as a trader. You will ask a thousand questions and bug every professional trader you meet. You will read a thousand day trading articles. You will start paper trading, develop strategies and setups, and define risk parameters for every trade. You will go on a hunt for self-understanding to master your psychological game. You will visualize every possibility on a trade before you take it. This is the true learning phase. You are trying hard to develop your edge in trading.


Stage Four: The Determined Trader

This is the stage in which you learn to specialize in certain markets and trading methods. Without realizing it, you have finally found your style of trading after hours of hard work and research. You stick to your method and you improve it. You realize that you need an edge whether its tape reading or being a Fibonacci expert. The important thing is you are slowly transforming yourself into a specialized trader. You test your methods and they seem to work. You gain tremendous market knowledge. You reflect back on yourself and you can't help but laugh at your foolishness. Although you have not made enough money to call yourself successful you are proud of your journey and accomplishments. You realize that the Holy Grail is not about technical indicators or price patterns. You calculate risk before profits and place strict money management on all your trades. You cut losses short and learn to scale out on your winners. You start accept losing as a natural part of the game. You take high probability trades that you have tested and feel confident about your setups because you understand that trading is a game of probabilities. Your psychological makeup has changed from an amateur mindset to a professional one.


Step Five: The Consistent Trader

You rely on your trading method and start taking trades systematically. You try to aim for consistency and are meeting your daily goals often. You have reached the conscious competence stage. You are fully aware of your strengths and weaknesses as a trader. At times you feel euphoric and at times you feel pain. But you are able to understand your own psychological makeup to control your emotional swings. You are now able to trade for a living.


Step Six: The Expert Trader

In this final stage, you completely understand the markets you are trading. Being involved in it everyday you are aware of every key price level. You understand market concept and are able to predict the direction of the markets a fairly good amount of time. You pat yourself on your back and take profits as soon as you feel euphoric. You do this because you understand euphoria is the same as emotional trading. You talk to other traders and realize the development stage they are in. People start asking you for trading advice, you publish a book, and you have a specific trading methodology that represents you!

Taking trades come naturally and you are able to get in and out at the precise price levels based on tape. Instead of having the markets take your stop out, you exit when you know you are wrong. You keep your head high but remain humble on the inside. You have now officially graduated the school of the hard knocks.

Entering the trading profession can be a tough journey for many people. Trading is one of the toughest careers that you can choose. If you enjoy the challenge, you will definitely enjoy the feeling of accomplishment. Trading is 30% mechanical and 170% psychological. 200% is required to become a successful trader. Good luck and best of trading.
Sorry could not find or remember the author.

The key is not to let yourself become frustrated at not knowing the information that you believe you should know but to understand where you are at and then set up avenues or structures to learn what you don't know.

Most people think the market is about making money and it is but trading is a study of ones self and how one responds to the market (a lot of new trades react to the market).

The system or edge that you use is only a small part of it, as long as your edge is sound, the rest is psychology and the way to improve is by asking qestions of yourself.

Try these and see if they help.

1- Where was my head at when I executed this trade?

2- What was it during this trade that did not work or what can I improve on?

3- What was it that worked for me during this trade?

4- If I was to teach this how would I explain what I did to a student?

5- Rate yourself from 1-5 where 1 is "what am I doing here" and 5 is "Get out of my way, I am the enlightened one" sorry just had to try putting some humour into it.

Hope this helps

cheers

Peaceful_Warrior
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Old Feb 8, 2009, 1:22pm   #8
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Quote:
Originally Posted by Joe1306 View Post
Hi folks,
I have been trying to trade forex intraday for the last 2-3 months and to be frank all i have to show for it is a big fat ZERO in my account.
Ok i accept I'm still learning but does anyone actually make money from fx daily trading or shall I look at other instruments.
Will appreciate your frank opinions
I didn't take the trouble to read other posts...but here is something you could do very easily.
Take a top down approach to forex....simply look at monthly / weekly /daily on your chosen pair and go with the flow...this immediately increases your chances of being with the trend...use 4hr and 1hr to time entries into that main trend.....also this is a more relaxed way of trading and buy's you time to make correct decisions...add in logical stops and realistic take profit levels...price is never too high and it's never too low.
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Old Feb 8, 2009, 2:13pm   #9
 
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Originally Posted by counter_violent View Post
I didn't take the trouble to read other posts...but here is something you could do very easily.
Take a top down approach to forex....simply look at monthly / weekly /daily on your chosen pair and go with the flow...this immediately increases your chances of being with the trend...use 4hr and 1hr to time entries into that main trend.....also this is a more relaxed way of trading and buy's you time to make correct decisions...add in logical stops and realistic take profit levels...price is never too high and it's never too low.
Good advice imo - i use the 1 hr for trading fx and it is the way to identify trend. Have traded the shorter time frames and it can get so frustrating. You need realistic stops though as fx can get and is volatile. As he says 'go with the flow' - its the big guys make the market - so follow them and don't be greedy.
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