By John Templeton
I understand the idea of learning how to day trade the forex market may scare off a lot of people. I think most new traders are really afraid to make the same mistakes that a lot of veteran traders make. Yet, they still are fascinated with the idea of making money from the comfort of their own home.
But they think that only the real "experts" can make money day trading the forex market. It's not meant for the average Joe and Jane.
This is just simply not the case. There is no age, education, or intellectual limit that has to be met to learn how to successfully day trade the forex market. You'd be stunned to know that there are many successful day traders who never even completed high school. So, relax and stop thinking that you need a Masters degree from an Ivy League college to be able to do this.
Day trading really boils down to having a strong grasp of technical analysis. There is no way to get around this. It's a prerequisite of day trading. Now, according to what you may have heard, technical analysis does not mean putting a stochastic indicator on your chart, and buying when it's below 20 and selling when it's above 80. I am afraid you are going to have to dig a little deeper than that.
Stochastic or any other lagging indicator isn't going to get it done. Indicators like this are the exact opposite of "technical analysis".
Tuesday, August 25, 2009
Monday, August 10, 2009
The Big Bad D - Day Trade
By John H. Anderson
The day trade that exists in the market is the one thing that most traders should have avoided and must avoid at all costs. I know I sound like a tired old man when it comes to this, but I really do not see the advantage of trading in the day trade market. I have received countless emails asking me why I am so against the day trade market and this is because it does not make any financial sense.
You need the stamina of a financial horse to be able to get into the game on a daily basis and make sure that you get the pips necessary to make your day at the market profitable. But the thing is, not everyone can do this, and in my books, 99% of the traders in the world cannot do this. Those who are doing this, and those who I know personally have plethora of computing power, systems up the wazoo and enough white hair to make a wheat field.
You have to know the market so well, your technical analysis must be so spot on, that you cannot almost go wrong in your trading. And these people make mistakes all the time, although they can keep it down to a minimal 2 - 4 a week. Can you do this? I would tell you now. No. And I am not saying that there is probably people out there that can day trade if they wanted to, but if they are those type of people, they should be joining a bank right now and make some serious money as an advice trader.
The other set of people that actually go about in the day trade are massive companies that have access to billions of dollars, and because of this, they are able to make their day on the market profitable. They also have an army of market analysts and traders to help to make positions and win trades. The ratio of the people that have actually succeeded as beginners on the day trading market is, in my memory and experience, is about less than 1%. So, if you are new in the Forex market, trading stocks and futures, all you need to do is to do everything but day trade.
The good thing is that most people out there realise the power of the market already, and they do not need to go to super advanced methods of trading like this. Look at the market and see it for yourself. Look at the day trade statistics, you can see that there is really a question of one sided profit taking in a market that is designed to buy and sell and keep itself profitable. So, when you trade, trade smart. That is the advice that I give most people all over the world when people asking me about trading and the various trading platforms that are out there. So, good luck in your trading and remember, always trade with patience and some knowledge.
The day trade that exists in the market is the one thing that most traders should have avoided and must avoid at all costs. I know I sound like a tired old man when it comes to this, but I really do not see the advantage of trading in the day trade market. I have received countless emails asking me why I am so against the day trade market and this is because it does not make any financial sense.
You need the stamina of a financial horse to be able to get into the game on a daily basis and make sure that you get the pips necessary to make your day at the market profitable. But the thing is, not everyone can do this, and in my books, 99% of the traders in the world cannot do this. Those who are doing this, and those who I know personally have plethora of computing power, systems up the wazoo and enough white hair to make a wheat field.
You have to know the market so well, your technical analysis must be so spot on, that you cannot almost go wrong in your trading. And these people make mistakes all the time, although they can keep it down to a minimal 2 - 4 a week. Can you do this? I would tell you now. No. And I am not saying that there is probably people out there that can day trade if they wanted to, but if they are those type of people, they should be joining a bank right now and make some serious money as an advice trader.
The other set of people that actually go about in the day trade are massive companies that have access to billions of dollars, and because of this, they are able to make their day on the market profitable. They also have an army of market analysts and traders to help to make positions and win trades. The ratio of the people that have actually succeeded as beginners on the day trading market is, in my memory and experience, is about less than 1%. So, if you are new in the Forex market, trading stocks and futures, all you need to do is to do everything but day trade.
The good thing is that most people out there realise the power of the market already, and they do not need to go to super advanced methods of trading like this. Look at the market and see it for yourself. Look at the day trade statistics, you can see that there is really a question of one sided profit taking in a market that is designed to buy and sell and keep itself profitable. So, when you trade, trade smart. That is the advice that I give most people all over the world when people asking me about trading and the various trading platforms that are out there. So, good luck in your trading and remember, always trade with patience and some knowledge.
Monday, August 3, 2009
Time to De-Consider the Day Trade
By John H. Anderson
This is really a fact that I have been stressing for a long time now. Day trade and the trading that comes with it is something that should be avoided at all costs and I am not kidding when I say that there are more failures that I can count in my years of experience in trading than there are people who have actually won out. Of course, there are those who will boo me from the stands and roll out the charts and profits by financial companies who specialise in the day trade, but for the matter of the fact, these are massive companies who have large access to resources and they also are not showing you their books.
So, do you have millions of dollars at your beck and call? Do you have a whole host of staff working day and night looking at the market so hard their eyes might be bleeding? No. Day trading is tough, it really is. I know because I have actually tried it and I tried to for 3 years. It is a dog eat dog world out and you must consider that the very reason you are in the market is to make sure that its liquidity is there and that buyers will be there most of the time. Basically then, the whole reason that you are there is so that you can give other people money.
Yes, I made money on the day trade, but when you compare with the money that can be made in other trades which are not so stressful, it does not add up. And i did not win all the time. In fact, I lost a lot of the times, and had to relearn my trading techniques because the game is really something unique. They take the weight off their feet in front of computer screens and search for a stock that is moreover moving up or down in price.
They feel like they need to ride the impetus of the stock and get out of the stock way before a negative price change occurs. They don't know for sure how the stock will move about, but they're on tenterhooks that it'll shift in a single course, either up or down in worth. And this is the life of the day trader, constantly on the edge of their seats and sweating buckets. In any case, you should know that true day traders don't own any stocks during the night because of the tremendous danger that prices will modify fundamentally from one day to the next, leading to great losses.
You must gaze at the market incessantly throughout the day at your processor. It's tremendously easier said than done and demands huge attentiveness to look at dozens of ticker quotation marks and cost fluctuations to mark market trends. You'll also have far above the ground payments, paying your firms a huge quantity for their services, for tuition and central processing units. This is why you need to de consider the Day trade.
This is really a fact that I have been stressing for a long time now. Day trade and the trading that comes with it is something that should be avoided at all costs and I am not kidding when I say that there are more failures that I can count in my years of experience in trading than there are people who have actually won out. Of course, there are those who will boo me from the stands and roll out the charts and profits by financial companies who specialise in the day trade, but for the matter of the fact, these are massive companies who have large access to resources and they also are not showing you their books.
So, do you have millions of dollars at your beck and call? Do you have a whole host of staff working day and night looking at the market so hard their eyes might be bleeding? No. Day trading is tough, it really is. I know because I have actually tried it and I tried to for 3 years. It is a dog eat dog world out and you must consider that the very reason you are in the market is to make sure that its liquidity is there and that buyers will be there most of the time. Basically then, the whole reason that you are there is so that you can give other people money.
Yes, I made money on the day trade, but when you compare with the money that can be made in other trades which are not so stressful, it does not add up. And i did not win all the time. In fact, I lost a lot of the times, and had to relearn my trading techniques because the game is really something unique. They take the weight off their feet in front of computer screens and search for a stock that is moreover moving up or down in price.
They feel like they need to ride the impetus of the stock and get out of the stock way before a negative price change occurs. They don't know for sure how the stock will move about, but they're on tenterhooks that it'll shift in a single course, either up or down in worth. And this is the life of the day trader, constantly on the edge of their seats and sweating buckets. In any case, you should know that true day traders don't own any stocks during the night because of the tremendous danger that prices will modify fundamentally from one day to the next, leading to great losses.
You must gaze at the market incessantly throughout the day at your processor. It's tremendously easier said than done and demands huge attentiveness to look at dozens of ticker quotation marks and cost fluctuations to mark market trends. You'll also have far above the ground payments, paying your firms a huge quantity for their services, for tuition and central processing units. This is why you need to de consider the Day trade.
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