2Bull Forex Blog

Enclosed you will find 6 common mistakes, made by the vast majority of forex traders -make anyone of them and you will join the vast majority who lose money, so here they are avoid them…

1. Trading Expert Opinion

All the forex news you see looks so convincing and today, we have TV channels and lots of resources on the net but there only opinions. They won’t help you win. If they did, more traders would win than they did 50 years ago and this is simply not the case - the ratio remains the same. Sure, the news sounds convincing but chances are its wrong, as it reflects the views of the majority who lose.

News is discounted instantly by the market and its how it is perceived that determines the course of events. It’s a fact that - most bear trends end when the fundamentals and news is at its most bearish and markets crash, when the news is at its most bullish.

2. Trading a Forex Robot with a Simulated Track Record

You can buy these online and they tell you that you can get rich for a few hundred bucks, you won’t be surprised to learn - you can’t. Most of these robots have great track records, the problem is there simulated over past data and won’t help you make money - there not worth the paper there written on, we can all be rich if we know what happened and could trade it!

Get the right forex education and learn a forex trading strategy yourself to lead you to success. Leave these cheap, losing robots, to dreamers and lazy traders.

3. Trying to Predict Forex Prices In Advance

Prediction is another word for hoping or guessing and that won’t get you far in forex trading. You can’t predict forex prices in advance so don’t try. Act on the reality of price change and trade the truth.

Many gurus sell scientific systems that claim they have found the formula for market movement and all you need do is follow them. If however markets did move to a scientific theory, we would all know the price in advance and there would be no market. Prices move because markets are uncertain not certain!

4. Day Trading or Scalping

A fantastic way to lose money quickly - it doesn’t work and the reason is obvious:

It’s impossible to predict what millions of traders are going to do, in a few hours. Because of this, all volatility is random and you will lose - period.

Ever seen a day trading system on the net with a real time track record? Neither have I - But I have seen lots of simulated ones!

5. Placing Stops Within In Random Volatility

Another common mistake is placing stops where there almost guaranteed to get you stopped out, as there within random volatility. If you want to avoid this, make learning about standard deviation of price, part of your essential forex education.

Forex trading is all about taking calculated risks at the right time and taking a risk. If you try to restrict risk to much, you actually create it and guarantee yourself to be stopped out.

6. Over Leveraging a Small Account

You can get up to 400:1 leverage with many forex brokers and most traders think the more they leverage they use the better - but they get stopped out quickly and their accounts are soon wiped out.

If you have a small account treat leverage with respect and don’t use too much - if you do, you will soon be in the 95% of losing traders.

The above are all common forex trading mistakes and if you make them, you will lose but there easy to avoid and if you learn digest and avoid them, you can get on the road to constructing a forex trading strategy, for long term currency trading success.

Forex scalpers aim to make small regular profits and in time build this up to a large income. Forex scalping is very popular and here we are going to look at how not to lose your money at it.

The best way not to lose money is not to even try it - it doesn’t work, before we explain why you may wonder why you see so many courses and people claiming big gains so here is the answer - the gains are paper gains and not real money. Read the disclaimer below which you will always see or a similar one with any forex scalping system:

“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“.

As you can see if a trading system carries the above it’s of no real use in terms of indicating profitability. We can all make money knowing closing prices and past data - it’s easy. In the real hard world of forex trading, you don’t have this luxury.

So why is forex scalping doomed to failure? The answer lies in the data is not reliable and you cannot (no matter how clever your trading system is) get the odds on your side.

In currencies prices in a few hours can and do go any where volatility is random and support and resistance levels within a day simply cannot be used to get the odds on your side.

As all volatility is random you are destined to lose long term. If you think about this it’s obvious:

Huge numbers of traders make the final price and they all have different motivations, skills and levels of emotion that input into their trading and to say this huge mass can be predicted in short time frames is ridiculous.

Not only do you have the above to contend with but forex scalping breaks a fundamental rule of trading:

Run your profits to cover your inevitable losses.

All trading systems have losses and drawdown periods and you need to run your profits to cover them. Now scalpers do get profits (everyone is lucky some time) but what do they do - Do they run it? Not a chance they bank it!

Of course luck doesn’t last for ever and if you are trading with the odds against you your on borrowed time and will lose eventually it’s just a question of when.
So if you want to keep your equity intact don’t forex scalp - trade longer term and get the odds on your side. Sure, short term trading sounds great but the odds don’t stack up it’s a wonder that sane intelligent people in other walks of life think they can win with a made up track record and a system costing a few hundred bucks.

You can make a lot of money trading but forex scalping is doomed to failure - trade longer term, get the odds on your side and win.

This post is all about forex day trading for beginners and how to approach day trading on the face of it, day trading looks a great low risk form of trading that can make you a lot of money but as with all ways of making money, its not as straightforward as that…

Day traders don’t make money long term, the odds are stacked against them and without the odds on your side in any form of investment- your going to lose.

What about all the forex day trading systems that claim to make money?

Well there is a problem - they have never been traded and are not all they make themselves out to be. In the small print at the bottom of the track record you will normally find the statement below or a very similar one:

“CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading.”

and

“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“.

If you have read and understand the above, you will see that the track records have all been simulated on back data not real time data and that of course is easy.

Try and find one with a real time track record and you can get ready for a long search. The fact is forex day trading is a theory that sounds good but that’s all it is - a theory which doesn’t add up in practice, which appeals to greedy and naive traders. They buy automatic day trading systems in droves and really don’t think about the disclaimer or don’t even read it!

Why doesn’t day trading work?

It’s pretty obvious if you think about the logic its based on which is about determine what millions of traders are going to do to price in a very short time period.

You have millions of traders trading to make the price and they all have different systems, motivations, aims, skills and subject to their emotions - How can you tell what this vast diverse, mass of traders are going to do in just a few hours?

Answer -You can’t!

All short term volatility i random and prices move randomly in short time periods. Support and resistance levels simply cannot be used to time trading signals and get the odds on your side.

Forex day trading is sold on the fact that it keeps losses small and yes it does however you are going to get stopped out the majority of time. This means that by placing stops to close by trying to avoid risk you are actually creating it and guaranteeing a huge amount of losses, as your stop is to close and within daily volatility ranges.

When it comes to profits (and by the law of averages you are going to get some!) what do day traders do - do they run there profits to cover their inevitable losses?

Of course they don’t, they snatch or try and scalp a small profits which of course can never cover their vast amount of losses. Running profits and cutting losses, is one of the keys to successful investment and even the best trading systems are going to be stopped out the majority of the time.

If you believe the trade for “a regular income” or “make money on 70% of the trades” - then you are falling for the hype of advertising copy and that’s not the real world of trading. Anyone who believes these statements really needs to continue with their forex education and get a reality check.

Day trading is one of the most popular forms of trading for novice investors and if you have read and understood the enclosed the most important fact related to forex day trading for beginners is - don’t try it, unless of course you want to lose your equity!

If you are looking at short term trading strategies in forex trading you really have two methods you can use forex scalping or day trading and on the other hand swing trading but which is best? Let’s tak a look…

Day trading or scalping is a method where traders seek to take advantage of intra- day moves of a few hours and use support and resistance levels in this period to determine when to execute their trading signals.

The problem is it doesn’t work. You have countless millions of traders trading with different forex trading strategies and methods, all with different motivations and to say what this group of traders will do in such a short time span, is laughable.

Of course, you see lots of short term trading strategies claim to make money but none them do. If you see a track record of profits, then you will see the disclaimer below as well - read it and you will see why the track records are meaningless:

“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 there you have it - they have never been traded and are made up.

All moves in a day are random and that’s why you never see a real track record of gains - day trading is a mugs game - Avoid it!

Forex Swing Trading

The other short term trading strategies are based around swing trading which tries to catch the intermediate moves in trends or trading ranges and these moves normally last for between 2 days and a week.

This method works and is an excellent way for novice traders to trade, for the following reasons:

1. It’s easy to devise a swing trading system based around support and resistance, momentum and breakouts.

2. There are lots of opportunities - which is an advantage as most traders are impatient.

3. You take profits and losses quickly, normally within a few days - so you don’t need the discipline to sit on trades for long periods.

Swing trading is essentially taking advantage of trades that last anywhere from a few days to a week and taking advantage of over bought / oversold scenarios and these tend to occur all the time.

If you want short term trading strategies for profit, take a closer look at swing trading and you will find it a great way to trade especially if you’re new to forex trading and forget forex day trading all it means is guaranteed losses

Many novice forex traders want to learn forex day trading online and scalp small regular profits to build into big consistent profits over the long term this is article is all about forex scalping and day trading success…

If you are considering learning forex day trading online then think again it will lose you money! Why?

Because you cannot judge where prices will go in the short term and will lose all your money over time.

The Myth of Forex Scalping and Day Trading Profits

Of course there are plenty of forex mentors and gurus who try and sell you forex systems all with great track records and they all have a problem - they all carry this warning, read it:

“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“.

If you have read the above you will see why these forex day trading strategies are unlikely to work for you.

- They haven’t been traded and are just made up!
- Anyone can make money knowing the closing prices but that’s not the real world
- You could ask yourself the question - why if the systems are so good why the sellers don’t trade them, shut up, keep quite and not bother you for a few hundred bucks!

Well you know the answer these systems are designed to be sold and rely on traders not reading the warning to closely and falling for clever marketing copy.

Try and find one without the above disclaimer and your in for a long hard search I have never seen one with a proper real time track record supported by account statements and neither will you and if you do let me know!

Forex day trading looks good in theory - but is doomed in practice ask yourself this question:

You have a huge number of traders who all contribute to the price and who have different motivations, skills and methods of trading and you have to decide what this unpredictable mass is going top do in a few hours.

Its impossible to do so don’t bother trying!

95% of forex day traders lose (100% in respect of day traders) and it’s hard to make money but it’s possible if you put the odds on your side and this means looking at longer term data where you can get the odds on your side.

If you want to win you must use valid data that can help you predict the odds - if you can’t play the odds you can’t win, it really is that simple.

Learn Forex Day Trading Online is a loser’s game so don’t even try it unless of course you want to lose all your money!