2Bull Forex Blog

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!

If there is one bit of forex advice that you can take which will determine whether you have what it takes to be a winner at forex then you need to think about the question I am going to ask in this post. If you think you can win at forex trading.

What’s your trading edge?

A trading edge is - the reason you will win, when 95% of traders lose and lose quickly, so what differentiates you from the vast bulk of losers:

What’s your edge?

If you think following the news, a vendors mechanical system, or day trading, to name three losing ways of trading - you don’t have an edge.

So what is an edge and how do you get it?

The answer is you need understand the following equation for forex success and here it is:

Learning the RIGHT knowledge + having Confidence in Your Knowledge (and knowing your edge) + The Discipline to Follow your plan - Forex Success

Forget about following forex trading systems with simulated profits - you will NEVER Win. Even if you find a profitable one, you need to know how and why it works and how it gives you an edge - success is on your shoulders, no one else’s and by far the best way to achieve success is to do what all successful traders do:

Take responsibility and do it yourself - ever heard of a successful trader who is a follower? No neither have I - so don’t try it.

Forex trading success to a degree relies on method - but if you don’t have confidence in your method, you will never have the discipline to apply it and without discipline, you simply have no method at all.

A trading edge comes from understanding what you are doing and why it gives you an edge.
It can be anything, everyone’s edge is different - but you must understand what it is and why it will give you success, when 95% of traders wipe themselves out.

Forex trading looks easy and learning the basics is - anyone can learn to trade forex but very few win and the reasons never change:

Following others, no confidence and lack of discipline etc

Forex trading can give you a life changing income and to achieve this is not easy - of course its not! If there are big rewards to be made then it’s going to be hard to achieve success. There is however a big difference between something being impossible and something being achievable - forex success is within reach of anyone.

Just work smart, have confidence in your edge and the discipline to apply your plan and you can achieve forex trading success.

If you want to trade forex and want regular profits then following these simple tips can change an average or losing trader into a trader earning triple digit profits. Most forex advice would not agree with them but that’s no problem 95% of traders lose! Let’s look at them and how they can change your profit potential.

1. Understand the 80 - 20 Rule

We have covered this in greater detail in our other articles but in brief it postulates that 80% of our results come from 20% of our efforts.

This is true in many areas of life and is true for most traders in forex , they simply over trade and lose.
The lesson is cut - you’re trading down and only take the best high odd opportunities.

Many traders think they need to trade all the time like day traders, or always need to be in the market, just in case they miss a move.

Well traders that are in the market all the time and don’t tend to win they tend to get a wipe out for their troubles.

The high odds trades don’t come around very often.

When they do you can execute your trading signal - but not until conditions are ripe to enter.

To give you an example, I know a trader that trades less than once a month and makes triple digit annual profits.

High trading frequency does not mean you will make more money in forex trading, on the contrary it improves your chances of losing.

2. Do NOT Diversify

You here a lot about diversifying cuts risk and all manner of technical equations are bought out to support the view - but its not so.

Diversification in most cases does not cut your risk but simply dilutes your profit potential dramatically. If you have a small account under $50,000 dollars you don’t have the luxury of diversifying anyway, so don’t bother - you will end up risking so little your guaranteed to lose, as normal volatility hits your stop.

If you see a good trade, load it up and risk as much as you can afford.

If you have the odds on your side then hit it and have the courage of your conviction to trade it for all its worth.

FINALLY

These are simple tips but they make total sense they make you focus only on high odds trades and they make sure that’s all you focus on without the distraction of other marginal ones.

Try these two tips, there simple and they will help you enjoy currency trading success.

Amateur traders often look to external sources for the best Forex training opportunities. They try to find the latest ‘systems’ and purchase hundreds of dollars worth of books and videos. But one important (not to mention free) source that they often ignore is their own trading log.

Many traders know that they should keep a log (or record) of their own trading activities. But what kind of information should they keep, and how will that information help them improve on their trading?

Log Entry Detail 1 - Entry and Exit reasons

One of the most important details to keep is the reason(s) for entering or exiting your trades. If you entered a trade (for whatever reason), and you made money, you may then go back to analyze what went right for you. However, if you lost money on that trade, then you can also go back and think about how you could have done things differently.

Without a record of your trade entry or exit reasons, you won’t know what went wrong or what went right. Many retail traders keep making the same mistakes over and over again because they don’t know what they’re doing wrong… there’s no way for them to know because they don’t keep a trading log!

Log Entry Detail 2 - Your Feelings When Trading

Many traders who keep a trading log unfortunately don’t keep a record of this detail. They enter into their logs only objective information: entry/exit criteria, lot size, as well as the time and date. All these are facts that can be verified.

But they leave out the one important subjective piece of information: their feelings before, during and after a trade. As a human being, emotions play a big part in influencing the decisions that we make; and in the world of Forex trading this is no different.

It’s important to be aware of our own feelings when trading, so that when we look back to reflect on what we could have improved, we can better remember how we felt when trading at the time.

Were you confident before entering into the trade? What about just after the trade? Did you have any feelings of regret that influenced you into prematurely exit a trade? Or did you feel that prices were certain to go up again, and thus held onto a worsening short position?

Keeping a record of your feelings will help you become more aware of your psychological state when trading. This can be very useful in identifying your own trading patterns and behaviour, so that you can improve on them.