2Bull Forex Blog

Human nature is constant and humans decide the price in any market and many new forex traders as part of their forex education look to follow one of the many scientific theories to help them predict market movement and enjoy currency trading success, let’s look at them…

You will see lots of forex trading systems say they can predict market tops and bottoms with scientific accuracy but how accurate are they?

The major scientific theories are those based upon the works of Fibonacci, W D Gann and Elliot.

The above theories and any others that claim that markets move to science are wrong markets don’t and cant by there very nature.

Why?

Because humans are not logical and do not conform to a universal ideal and this should be pretty obvious as if there was a scientific theory of human nature we would all know the price in advance and there would be no market.

It’s a fact that if any of the so called scientific theories worked everyone would follow them and of course they don’t. Fibonacci, Gann and Elliot made no money with their theories but that still doesn’t stop the far out investment crowd claiming they work when they quite obviously do not.

Trade to Win By Trading the Odds

If you want to win at forex trading, don’t look for something that doesn’t exist and look at the right way to trade forex markets to win and that means trading the odds.

An essential part of your forex education should be that, forex is a game of odds NOT certainties. Don’t let this dishearten you though - if you learn how to trade the odds and use a simple soundly based forex trading strategy you can win and win big.

The fact is markets move based upon the supply and demand fundamentals and human perception of them. At certain times greed and fear take hold and humans push prices to far from fair value and a price spike occurs.

These short term price spikes are easy to see on a forex chart and can be traded for profit. Sure you won’t win every trade- but if you win more than you lose, keep your profits small and run your profits you can make huge profits.

Today science has enriched our lives and we marvel at some of the advances that are made. You can however only apply science in certain areas and forex trading is not one of them.

Keep It Simple!

Forex trading remains and always will be, odds based game and if you think about it 95% of traders lost 50 years ago and 95% lose today despite all the advances in science and forecasting.

Forex trading relies on a simple method and your ability to execute it with discipline through periods of losses to achieve currency trading success.

If you get the correct forex education and learn how to do this, you may not be perfect with every trade - but you will make a lot of money.

Forex day trading is simply one of the best ways to lose your money and the logic it is based on is absurd and common sense should tell anyone why it doesn’t work. Yet year after year day traders trade and lose using day trading methods. Lets look at why.

Before we look at why day trading doesn’t work lets first look at all the systems that supposedly make money on the net. They don’t make money in real trading though it’s all simulated made up track records using past data.

If you see a day trading system which claims that it makes money simply look for the following in the small print at the bottom:

“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”.

The above disclaimer simply means nothing in terms of future profitability. Why?

Because if you want to make up a track record using past history - anyone can do that.

If we all knew prices in advance we would all buy the bottom and sell the top and never lose any money - in fact we would all be multi millionaires. Shame it’s not that easy though!

We have to trade without knowing what will happen and that really is a lot harder

Day trading is a good story and marketing companies know this so why not write some hyped up copy to appeal to greedy traders, make up a great track record and then sell it to the unsuspecting trader?

That’s what happens and time and time again the novice trader falls for it - He thinks he is going to make his fortune by handing over a few hundred bucks and then he gets his lesson in reality his equity is lost.

So let’s look at why day trading is a loser’s game

The reason day trading doesn’t work is that the logic it is based upon is absurd - think about this:

We have millions of traders, all with different motivations and forex trading systems and day trading is supposed to allow you to gauge what this vast diverse mass of emotional beings will do so you can enter trades on a tick chart?

Its common sense this cant be done and that’s why over the longer term day traders lose.

All volatility in daily time frames is random, support and resistance levels cannot be used and you cannot get a trading edge so you will lose.

If you can’t get the odds in your favor you will lose period

Avoid forex day trading unless you want to lose your money and lose it quickly.

Leave it alone and trade the longer term trends where you can get a trading edge and you can get the odds in your favor - Period.