Trading Currency Blog

Sacha Tarkovsky asked:


If you want to make money in forex trading the first point to keep in mind is you cannot make a regular income. That’s not to say you cannot make long term profits – you can, but the e-books and forex day trading courses that promise regular profits are doomed to failure.

The forex markets are volatile and they produce moves each day that in theory can make you thousands of dollars – The problem is however is trying to catch these moves for profit in advance.

The myth of regualr in income from fforex markets is spread by forex day trading system vendors, however Forex day trading systems and profits are a contradiction in terms:

Day traders always lose longer term and you never see a real time track record of profits.

Why?

Because you can never get the odds on your side, as the data in short time frames is meaningless.

There are othercurrency trading systems that say that markets move with scientific accuracy and because of this you can make a regular income.

These theories are loved by the far out investment crowd and the king of the theories is Elliot wave.

Elliot wave says it’s a scientific theory and then tells you that you have to decide which patterns are correct to trade!

Anyone can see the flaw in this theory – if it’s scientific, then you should not have to make subjective judgements it should be objective!

Let’s look at some positives when making money from forex trading.

Firstly, you can get the odds on your side over the longer term and secondly, you can make massive profits.

Just keep these points firmly in mind:

1. It’s an Odds Game

Being an odds game you are never certain to win, but as the skilled gambler knows if you play with the odds you may lose the odd hand but you will win longer term.

2. You cant force profits from the market

You have to wait for the right conditions to present themselves, for your trading signals to be effective – this means waiting weeks or months on some currency trading systems.

The two points discussed above mean that you can make money from forex trading, but your profits will be in erratic time frames.

In light of the above keep this point in mind:

It is not un-common for the top traders in the world to go for months or more than a year or more, without making a profit. When you trade currencies you need to judge your profitability over years, not months or weeks.

Many vendors put about the myth you can make regular profits from forex trading, as it suits their interest – to appeal to the buyer’s greed, these guys simply sell stories and are not traders.

If you don’t believe me ask for a track record of real profits and you won’t get one.

So forget about scientific theories and making profits every week that’s not the reality of forex trading.

The good news is:

That if you play the odds when trading currencies online and take a long term view you can make big consistent capital gains over the longer term.



BRUMWELL

Kelly Price asked:


Human nature never changes and therefore repeats so if you know the theory of human nature you can make regular profits by applying various scientific theories to catch these repeating patterns – let’s look at them and how to make profits.

There are three major scientific theories and they are:

Elliot wave, Gann and Fibonacci

These three theories claim that markets can be predicted with scientific accuracy as human psychology is constant and always will be, therefore once you know this recurring phenomenon it’s easy to spot profitable patterns in advance.

The problem is none of them work – sure, human nature is constant and repeats but this cannot be reduced to science.

You need to know the time frames.

It’s a bit like saying another earth quake will come in California sure it well but when?

Scinetific theories like Gann Elliot and Fibonacci despite the hype dont work - Elliot made no money and Gann ended up selling courses for a living and as for Fiboonacci this has nothing to do with finace at all and was devised to solve a problem to do with the copulation of rabbits in the 12th century. If leonardo Fibonacci were around today, he would be bemused how his theory has been hikjacked.

These theories appeal to lazy or the far out investment crowd, who think trading is a walk in the park and with the rewards at stake its not that simple. Of course it is possible to make money but you need to see forex trading for what it is - a game of odds.

Markets are all about timing and it’s obvious no scientific theory could work as if it did we would all know the price in advance and there would be no market!

A price moves because of uncertainty pure and simple

So if human nature is constant what can you do?

The answer is to see the markets not as a game of certainties - but as an odds game.

If you learn to play the odds you can and will make a lot of money sure, you will lose some trades but that’s just the way it is – a football player doesn’t score every time he kicks at goal but he hits the target enough to make a living.

If you want a theory to help you

Study Dow Theory – it is simply one of the best theories you can study in relation to market movement. Then use your forex charts to spot the patterns and time your trading signals

If there is one group that make excellent traders its - ex blackjack and poker players.

Why? Because they know they have to fold ( take losses ) and when they have a good hand play it for all its worth ( i.e up the bet size ) to make a living and they do this non emotionally and with discipline – and that’s what you need to do to.

Learn down theory, learn the traits of blackjack and poker and you have a great combination which will beat any scientific theory hands down in the market.

So if you want to trade currencies and you want to win – learn to play the odds and win big.



GEROULD