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Why Trading Forex is so Difficult: Randomness in the Markets: Clusters of Bad and Good Luck. David Paul, Financial Trader comments. If you found value in watching this video, PLEASE LIKE AND SHARE so we can do more! It is always my understanding that it is difficult to make money long term when trading currencies and indices - how do you manage? Most trend following systems have less than a 50% correct hit rate. This means that you get a series of losing trades from time-to-time - how good would you be with executing your system with precision when you get 5 losing trades in a row.
Even if u win 50% of the time with Risk:Reward = 1:2, you are still profitable. If u win 30% of the time with Risk:Reward = 1:3, u r still profitable.
Trading is Mind Game.
It tests your Patience to wait for the perfect entry. Sniper Entries? They are done after a setup forms on Daily. Then wait for a setup of 4H, then 1H and then take the shot. This process requires PATIENCE. Trust the process and you will win.
I am quite profitable in Forex and been working very hard for the last 2 years. It was a great journey. It fucks with your mind, but you have got to be Patient. No greed.
People saying that forex trading success must be luck are clearly not understanding the video. He is saying that even with the most optimal strategy, luck will eventually take you out unless you manage your risk. He isn't saying that success must equal luck.
Hey man, I feel you bro. Lost a lot of my money in the beginning, then really opened my eyes and listened to real investors. Now I just buy long term stocks, etfs, index’s and just focus on compounding. I don’t even check my account anymore, but every time I do, it goes up higher and higher. Slowly, but it really works. Day trade and swing trade really screwed me over.
there is a simple solution to all this (Because of Market Manipulation.. I call it the Snail and the hare), Distant your stops and trade short ( meaning a psychological not to think big, because big is a gamble) trade with low constant profits, follow the trend and sell if you have to and stay ahead.
I managed to lose so much money investing - my wife dragged me to spend a weekend camped on the sand of an isolated private beach in another country.. one with no internet or cell service as luck had it our $60,000 USD grossly jammed into bitcoin ripple bitcoin gold went to shit when the market went south Jan 2018
Anyone trading forex based on luck is doomed to fail because trading isn't about luck but pure skill cultivated over a period. It is like developing any other skill such as writing, singing, instruments, cobbler etc. You have to understand markets and how and why price moves in markets. People who succeed in forex understand where market movers are willing to buy and sell.
Anyone who believes primarily in luck for trading success has a problem with his/her view of reallity. Your view is being obscured by irrational, illogical, non-evidence based mentality which can be found mainly in people of faith and people with high credulity.
I don't have rabbits feet, I don't kiss beads, I don't cross my fingers & luck is a random word u use to fit a sentence or solution in place of wisdom. I don't believe in luck & never had a 5 in a row losing streak. Average 80% winners even though it's only going to give u a 10%+ return.
But hey, I like listening to new ideas & everyone has an opoinion. But your math is based on luck.
It is always a challenge to keep listening when the person mentions a strategy in the first minute that is the exact opposite from what you are comfortable with and you trust and feel is the right strategy for you. I will get back later when my teachability is better. Of course strategies are as personal as tastes are. Trading is all about personal psychology. There are probable as many profitable strategies as there are people.
IT IS NOT 50-50, not even close , just had an experiment on my demo account, 100 trades which I executed on random basis (not even all random, had some good strategy trades, but market always shaked me off even tho I was setting up my stop losses according to 14 days ATR. My winning ratio was only 25% , even tho my risk reward was 1-2.5. I was trading Crude Oil.
If I had edge of only 32% I would be profitable.
For some reason we are hardwired to lose.
100 trades is not a small sample, and what really creeps me out is that the universe doesn't want everybody to have 50% chance, why is that ?
I HAVE HAD ENOUGH OF HEARING THIS NONSENSE. This is hands down the most misleading and stupid interview I have ever seen. Trading forex is not random for god's sake. Price is driven by supply and demand. economic news releases are all priced into the forex markets like you wouldnt believe. People lose because of 3 main things. 1...psychology (fear, impatience, greed, stupidity) 2...No understanding of money/risk management and 3...They dont have ONE strategy/setup that they have mastered/backtested, and understand in which conditions the strategy/setup works a HUGE majority of the time, and in which conditions it doesnt. I trade 1 setup with a 90-95% win rate with a risk:reward of minium 1:2 per trade. This guy in this interview is not a good trader. Period.
If your strategy/setup works "50%" of the time then it can work 90-99% of the time. How you may ask? It is simple. Find the common factors/market conditions as to why your strategy only worked in that "50%" bracket of wins. You WILL find that all your winners have similar things. Then, have the PATIENCE to WAIT and only trade when the market is in those EXACT similar conditions. For example. was the market structure trending? was it ranging? was it during london session? newyork session?
Just think about it...
Theory is all nice and dandy, but this does not happen in real trading. What happens in real trading is that you can get 2 wins, for example followed by 6 losses in a row, then 5 wins, followed by 1 loss, then 9 followed by 3 and so on. It is much more random than you think. You cannot theorize your success rate. Also, much more important is not the frequency of your losses, but the consequences of each particular loss. You can be wrong 9 times and right just 1 to make it even when it comes to money. The opposite can also happen, where 9 wins get erased by 1 loss. So frequency is not so important as consequence .
And Forex is a Zero-Sum game. That what you win must another lose. And there are mostly Banks and other professional Traders against you. I tried it but the Stock-Market is easier in my opinion because that is no Zero-Sum game and when the Stocks go up all can win. Win-Win-Situation for everybody . Thats much easier.
He has it.
Its all psychological. It's not centered on the strategy or the market, not the news or the value but in the behavior of the humans trading.
The reason why many people lose in trading is they lack knowledge and discipline. They don't know how humans behave in certain scenarios and don't put in the amount of effort to learn it. Because of this they go in blind with a strategy they learned that might not work because it conflicts with the most important factor in trading: "Human." Sometimes these strategies work like fitting a triangle through a circle but other times they fall hard because the market doesn't behave in the way that strategy works best.
We must develop the skills to read past the charts and ratios and see the way a human reading those charts will feel about them and the decisions they themselves will choose. We aren't playing a numbers game against computers, we are playing a mind game against fellow humans.
"If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle." - Sun Tzu
There is no randomness in forex market everything controlled right to a PIP! yes a PIP. Algorithms do that not ppl. Its easy to predict the market once you know what algorhitms will do for the day. Second thing if you make more that 5 loses in a row quit trading because you have 0 understanding about markets
Excellent interview. Key point for me is managing risk. Forget about how many losing trades you have just try to keep them small and let your good trades play out. In practice you can have more losing trades than winning trades and still turn a profit if you have the discipline to cut your loses and let the winners run.
They (and they are out there) that 90% of all traders fail. because they still need ditch diggers and burger flippers, go to college and take a loan for $50,000 + and spend 4+ years of your life taking courses that don’t mean shit, they (individuals) come out and have to work minimum wage. Now that’s failure...nobody takes about that.
Trading stocks typically have the lowest fees on eToro, which is one reason why I recommend you stick to this market when starting out.
All trades charge both a spread and daily rollover fees.
It really comes down to individual trading strategies and preference. But to give you an idea, I tend to hold on to stocks for a minimum of 6 months and all other trades tend to have an average duration of about two-three weeks.
A final word on over-trading.
This is a point that I want to expand on a little more, specifically in relation to copying other traders. Below is a screenshot of my equity chart over six months. The red line shows the number of people copying me.
My equity vs copiers chart.
The same holds true for the stock market in general.
Long-term growth of UK stock market.
How to Start Trading Cryptocurrencies.
Cryptocurrency trading can be extremely profitable if you know what you are doing, but it can also lead to disaster. Even though most traders decide to either go with fiat or bitcoin, other cryptocurrencies can represent viable income sources, as long you as you tread carefully and understand what you are doing. This guide is for those who want to start getting involved in cryptocurrency trading.
Where to trade.