Why do I keep losing money at forex?

[mercuresfrez]

I've been studying the foreign exchange market hours each day for over a year. I've also read piles of books on technical trading strategies, economic indicators, market timing, psychological discipline, stocks, bonds, futures, options, etc. I practice trading forex on a demo account as well as on a real mini-lot account. No matter what I try, my results are always slightly worse than 50/50. I'm seriously beginning to think that NOBODY trading forex makes any money in the long run. I don't just say this because I suck, but because I think it is statistically impossible to win at a game of random incremental price movements after paying a spread. I've sometimes made up to $20,000 on my demo platform, but I always eventually lose more than I gained--which is exactly how I would expect to perform at a completely random game after paying a fee each time I play. Don't get me wrong when I call it a game: I take trading very seriously.

Does anyone consistently make a profit trading forex? Please don't answer this question in the affirmative unless you yourself make consistent profits.

Cheers,

Kakuzo

 

[Mr Woozel]

This is a great interview with Peter Brandt:Interview With a Trading Legend, Part I | Mercenary Trader

I also found this very useful: http://www.elliottwave.com/club/PeterBrandtWebinar.aspx?code=WEB

 

[Patricia12]

I think, Ezekiel Chew a asia forex mentor makes consistent profits in trading.

 

[Enzzo]

Does anyone consistently make a profit trading forex?

First of all.... one needs to clarify what making profits consistently means, as that is a very general and subjective "sentence"...

For some people, it simply means not loosing "a lot" in the "bad times" and compensate with the good ones...
For others can mean ending the month with 1 positive pip.....
For others, being profitable can mean "make a living out of trading"....
.....etc...
So it is a very subjective and individual subject...

But what it is 100% true for everyone without exception, is that every trader faces DD periods no matter how good he/she is, what is trading, or what system/method uses......so the "name of the game" is controlling them to take the most advantage of the profitable ones...

 

[intradaybill]

This is a great interview with Peter Brandt:Interview With a Trading Legend, Part I | Mercenary Trader

I also found this very useful: Peter Brandt Webinar

I have followed some of the calls of this trader in his blog and I must say I was completely disappointed. He is using chart patterns and his failure rate is too high. Last year he called for Dow 6,500 and a few days after the Carnival Corp ship wreck in Italy he showed a bearish pattern on the chart that as he claimed indicated possible bankruptcy not even being aware that this is a multibillion dollar company/ This was his post on Stocktwits:

PeterLBrandt
New post: "Charts suggest bankruptch for Carnival Cruise Line." http://t.co/f5fC2FGO $CCL

This guy subsequently removed his bad call from his website as you can see. I find this to be very peculiar.

Then his biggest failure was his call of a drop in bonds based on his patterns. Since his call, bonds have gone straight up:

T-Bonds and T-Notes violate important chart levels | PeterLBrandt

 

[Ross Spur]

FWIW, I think you're more likely to make a profit by concentrating on a few major indices, even if logic says FX would be easier to trade. Also, beware of spending too long on demo. Once you're familiar with a platform, use real money with small stakes (assuming you're somewhere that SB is possible) and aim for consistent results with no major swings in account balance.

 

[ZEN archer]

Maybe you should try selling trading systems to uninitiated and make money from fx that way.

Just out of curiousity - what are you selling?

 

[bbmac]

It's impossible to say why you are in this predicament as there is insufficient information in your post. It could be that you don't have an edge proven across many 100's - 000's of times it has set-up, or that you ahve the wrong money amangemnet startegy with that edge, or that you have not mastered the psychological challenges that trading can present us with, or a combination of both or all three reasons.

Everyone has their own view of the market - whether it be that it is chaotic or random or has form - like elliot waves, but I think you are wrong in your central assertions that '...nobody trading forex makes any money in the long run..' and that you '... think it is statistically impossible to win at a game of random incremental price movements after paying a spread..'

The trading psychologist Dr Alex Elder descibes an edge as an ' Island of order in a sea of random chaos ' and I tend to concur with this, - the market does sometimes have discernable repeating patterns and ' form ' and from these an edge can be derived but of course you need to master the psychological challenges to actually trade that edge profitably and consistently too and this may take even longer.

You intimate that your strike rate is always slightly worse than 50/50 ie 50% ish and I presume you mean winning trades as a % of total trades ? Do you know if your edge has a positive expectancy? There are several other things that you need to know about your edge and keep up to date / monitor as results occur in order that you can optimise money and risk management, know it's typical and maximum metrics, anand crucially ensure that it is still working.

I would also doubt that 1 year is anywhere near long enough and that you should be thinking more 3-5 before you may just start to see some results.

G/L

I've been studying the foreign exchange market hours each day for over a year. I've also read piles of books on technical trading strategies, economic indicators, market timing, psychological discipline, stocks, bonds, futures, options, etc. I practice trading forex on a demo account as well as on a real mini-lot account. No matter what I try, my results are always slightly worse than 50/50. I'm seriously beginning to think that NOBODY trading forex makes any money in the long run. I don't just say this because I suck, but because I think it is statistically impossible to win at a game of random incremental price movements after paying a spread. I've sometimes made up to $20,000 on my demo platform, but I always eventually lose more than I gained--which is exactly how I would expect to perform at a completely random game after paying a fee each time I play. Don't get me wrong when I call it a game: I take trading very seriously.

Does anyone consistently make a profit trading forex? Please don't answer this question in the affirmative unless you yourself make consistent profits.

Cheers,

Kakuzo

 

[Mr Woozel]

I have followed some of the calls of this trader in his blog and I must say I was completely disappointed. He is using chart patterns and his failure rate is too high....]

He has a 35% win rate, approx 40% ROI for the last 20 years and great risk management. You dont think that's impressive?

 

[Enzzo]

He has a 35% win rate, approx 40% ROI for the last 20 years and great risk management. You dont think that's impressive?

I don't know the guy in question... but if these numbers are right... it is quite impressive.... not that much for the ROI or the Win Rate.... but..... 20 years???
That is amazing consistency in the long haul

 

[intradaybill]

I don't know the guy in question... but if these numbers are right... it is quite impressive.... not that much for the ROI or the Win Rate.... but..... 20 years???
That is amazing consistency in the long haul

Have you seen his audited records? Who is his auditor so we can ask him?

Do not believe everything you read unless it is a certified record.

 

[Enzzo]

Have you seen his audited records? Who is his auditor so we can ask him?

Do not believe everything you read unless it is a certified record.

Yes.. I agree 100%.. that's why I wrote "if these numbers are right".....

In every "profession" there are always people lying about their real performance, or what they earn, etc, etc.... by I found along the time that trading is the one with more liars and cheaters "for square meter" I've ever known...
So I do not believe practically anything first hand, unless it comes from a "trust-able" source/person of mine....

 

[Splitlink]

Most of the time people believe what they want to believe, whether it be about finance, politics, or whatever. A fast talker will always find those who want to listen so, if you don't want to, no matter, there will be plenty of others. This is the unfortunate truth.

 

[Mike Kshemaraja]

Most of the time people believe what they want to believe, whether it be about finance, politics, or whatever. A fast talker will always find those who want to listen so, if you don't want to, no matter, there will be plenty of others. This is the unfortunate truth.

Good post, yes we see what we want to see and not what is there, specially when we look at the charts.

 

[sureshshetty2110]

You should maintain Take Profit and Stop Loss in order to maintain Good profit and Less loss. Some companies provide sms alert service about trends in forex trading.

 

[angelnish]

I think:- poor planning is the key to failure.Poor money management follows.Taking high leverage could be a course too since it posses higher risks.

 

[Enzzo]

I think:- poor planning is the key to failure

that is really key!!!
If you affront market everyday with the homework done the night before, and knowing what exactly are you gonna expect for the session...(if and them)....then is a game of waiting with patience for the market shows you that your analysis was right.... if not, no problem... one shouldn't trade what it is not in his plan!!!

 

[rsh01]

my results are always slightly worse than 50/50

Well all you need is rr of 1:>1 and you're close to making money. 1:2 and you're laughing.

 

[arbus]

No matter what I try, my results are always slightly worse than 50/50

I find always doing the opposite to what the guru's in the mainstream news reports say is a good place to start.

Seriously, your system does not work. Find a system that works, and test it, for a long time before you trade real money.

 

[Enzzo]

I find always doing the opposite to what the guru's in the mainstream news reports say is a good place to start.

What a huge truth!!!

Find a losing system.... the biggest losing system (or trader) you can find....
Study it a little bit and do exactly the OPPOSITE...
there you go... a real killer system... :cheesy: