Why winning in Forex is impossible?
- Machine learning in trading: theory, models, practice and algo-trading
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suppose you win constantly in forex. all transactions are followed by the brokerage house. if the broker discovers that you have won continuously, he will follow you and do the same transactions in big lots. this affects the market as a chain and moves against your expectations. In accordance with the uncertainty principle, what is measured is affected by the measurement.
suppose you win constantly in forex. all transactions are followed by the brokerage house. if the broker discovers that you have won continuously, he will follow you and do the same transactions in big lots. this affects the market as a chain and moves against your expectations. In accordance with the uncertainty principle, what is measured is affected by the measurement.
As a retail trader, you don't have much of a choice, unless you personally know the Brokerage and can verify that no information about the Account making the transaction is sent to any Liquidity Provider used by the Broker. All it takes is a unique account ID (no personal information required) to group all your transactions, follow your progress and get classified as a winning or a losing trader.
But ... IMHO, your worries about the Broker taking advantage of your profitability as a trader are just an attempt to find someone else to blame
for your inability to continuously earn profits while trading. It is a much more profitable strategy to bet AGAINST LOSING traders than to
try and copy winning traders, because (A) the majority of winning traders only make a very small percentage and (B) you always need a
counter-party for your trades, which would simply be the trader if you are trading against him. And that is why Market Makers prefer to have
more losing traders than winning traders. As a winning trader, you are just an annoyance to Market Makers and NOT an easy way for them to make
money.
It isn't really that hard to be profitable while trading, if you are comfortable making small profits and know how to trade the market. The problem is that many traders, especially when they start learning how to trade, have unrealistic expectations and take extreme risks while trying to achieve them, which might work for a while, but sooner-or-later ends up in losses that are much bigger than all the previous profits combined.
Greed and unrealistic expectations can easily turn a strategy that could be making small profits, into a strategy that keeps making big losses.
suppose you win constantly in forex. all transactions are followed by the brokerage house. if the broker discovers that you have won continuously, he will follow you and do the same transactions in big lots. this affects the market as a chain and moves against your expectations. In accordance with the uncertainty principle, what is measured is affected by the measurement.
I agree with your assessment; I have found that every trade I take is stopped out. These are trades given to me through favorable sources, i.e. Scott Carney's indicator. I don't believe for a second that its the indicator. I believe they are using enough lots (since I am a little fish) to remove me from the equation. It is unethical what they are doing. Only those who trade small lots seem to feel the pinch. I have heard Scott Carney mention in his YouTube classes that many of these were stop hunted. I cant wait to trade Futures. It is not as manipulated.
As a retail trader, you don't have much of a choice, unless you personally know the Brokerage and can verify that no information about the Account making the transaction is sent to any Liquidity Provider used by the Broker. All it takes is a unique account ID (no personal information required) to group all your transactions, follow your progress and get classified as a winning or a losing trader.
But ... IMHO, your worries about the Broker taking advantage of your profitability as a trader are just an attempt to find someone else to
blame for your inability to continuously earn profits while trading. It is a much more profitable strategy to bet AGAINST LOSING
traders than to try and copy winning traders, because (A) the majority of winning traders only make a very small percentage and (B) you
always need a counter-party for your trades, which would simply be the trader if you are trading against him. And that is why Market
Makers prefer to have more losing traders than winning traders. As a winning trader, you are just an annoyance to Market Makers and NOT an
easy way for them to make money.
It isn't really that hard to be profitable while trading, if you are comfortable making small profits and know how to trade the market. The problem is that many traders, especially when they start learning how to trade, have unrealistic expectations and take extreme risks while trying to achieve them, which might work for a while, but sooner-or-later ends up in losses that are much bigger than all the previous profits combined.
Greed and unrealistic expectations can easily turn a strategy that could be making small profits, into a strategy that keeps making big
losses.
I use the 2% rule. But that doesn't matter. I am stopped out only to see the trade go in my favor. Don't tell me I didn't have my stop high enough. When you trade such small amounts you can afford to place your stop in a very high place.
Why are you using stops, if you know that? Seriously. Why? I never use stops. I open and close all my positions manually, because I've observed the exact same thing you are describing. If something does not work for you, accept it and look for a different solution. If you keep making the same mistakes, don't be surprised if the outcome doesn't improve.
Learning how to trade is not about joining seminars and repeating what you've been told. It is about trading on your own, learning from your mistakes and finding out what works and what doesn't work FOR YOU, then using that to improve YOUR trading strategy. It is a process, which takes a lot of time and is different for everyone. But you need to learn and adapt, not just do what someone else told you to. Otherwise, you'll just be joining 90% of traders who keep losing money and eventually give up.
The biggest mistake most traders do, is to over-use leverage. I'm NOT against using accounts that give you high leverage. I also trade on
accounts with 500:1 leverage. What I mean is that you HAVE TO make sure that your total exposure (open volume on all symbols) is low enough to
survive the worst possible thing you can imagine happening on the market before the price turns in your anticipated direction and you can
collect your reward. The root of all evil on leveraged accounts are margin calls, which always happen if you over-use the leverage.
Also, please keep in mind that each instrument available on the market is different. There is a HUGE difference between trading Stocks and Forex, but there are also big differences between each currency pair on Forex. For example, even if you know exactly how and when to trade EURUSD, do NOT try to trade EURAUD or NZDUSD or XAUUSD or any other pair by blindly following the rules that worked for you on EURUSD, because active trading times a different, range of movement is different, the spread is different, on some accounts even margin requirements are different, and ... most importantly ... people who trade these instruments are different. Everything that matters is different. The more instruments you trade, the more opportunities you will have, but you need to handle every instrument with respect to its own rules, or you'll keep losing money.
So ... how long does it take to become profitable?
Well, it depends on a lot of factors, but ... in my experience ... the most important are (1) your ability to learn from your mistakes, (2) your imagination in looking for solutions to the problems you will face, and (3) the amount of time you can dedicate to trading. If you trade with low volumes (keep your exposure low) and execute all your trades at the current market price (avoid using Take Profit, Stop Loss, Buy Stop, Buy Limit, Sell Stop or Sell Limit orders), you can learn trading on a DEMO account, without risking real money.
Once you have a solid trading strategy that works CONSISTENTLY over a LONGER PERIOD of time (I mean six months and longer, not a couple of weeks), then you can make a small deposit on a REAL account and try the same with REAL money. There will be differences, offcorse, because your actions will have an effect on the market, especially when liquidity is low, and ... because you will also have to learn how to control human emotions like fear and greed, but ... if you do NOT deviate too much from what you've already learned while trading DEMO, you should have comparable results on a REAL account. Unless something fundamental has changed and the market conditions are completely different now, in which case you should re-evaluate your trading strategy.
Obviously, you should trade DEMO with the same amount that you plan to deposit on your REAL account once you've learned how to trade. If you trade DEMO with $100k USD, but then only deposit $1k USD on your REAL account, you will end up with a margin call very quickly.
I know there are A LOT of self-proclaimed "Gurus" out there, who take advantage of people naive enough to fall for their stories of big
riches, just waiting for you to grab on Forex, or the Stock Market, or trading Options. With words like "Get my PROVEN STRATEGY for ONLY $100
(normal price = $1000) and enjoy financial freedom for the rest of your life". But ... in reality, the ONLY way to achieve a point where you can
trade profitably, is to do your own research (there are a lot of free websites that explain how the markets works, what indicators are and all
the other stuff you should know), then trade by yourself and work on developing YOUR OWN trading strategy. And ... always keep in mind that
Trading is a LONG-TERM PROFESSION. If you approach Trading like gambling, or dream about becoming rich quickly, your results will be random
at best, but you will be losing more and more money over the long run. And, last but not least, there are a lot of ways to make money. If you do NOT
like sitting in front of the Screen and looking at the Charts, then Trading might not be the right PROFESSION for you.
Not Easy doesn't mean Impossible :)
Is winning in a Business is Impossible ? Financial market is the same.
Not Easy doesn't mean Impossible :)
Is winning in a Business is Impossible ? Financial market is the same.
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