More novice traders try forex day trading than any other method and while you will hear people telling you it makes money and see gurus selling courses, the fact is you never see a real track record of profits – Why? Because – it doesn’t work.
Forex day trading doesn’t work in the real world – because all daily volatility is random.
The net result is that support and resistance levels (and any technical tool you try) have no chance of working, therefore you have no chance of winning.
Millions of traders, trade trillions of dollars and to say that you can tell what this huge mass all driven by different motivations, experience and emotion will do in a few hours is laughable.
The illusion day trading makes money is just that – an illusion.
Traders back test data and bend their systems to make them fit the data.
Of course, when these systems are traded the data never replicates itself EXACTLY the same way again and they lose.
This is known as “curve fitting” i.e. bending the system to fit the data.
One trader I know likened this to shooting at a barn door and then afterwards drawing a circle around everyone, to show it as a bulls-eye.
If we all knew tomorrow’s price today, we would all be rich – shame it’s not that easy in forex trading – we have to trade not knowing the prices!
Vendors feed on this naivety and greed, by making up track records based upon hypothetical simulations done knowing the closing data, put a disclaimer on and forex traders think it will work in the real world.
They don’t – ask for a real time track record and you simply won’t get one.
The vendor makes a guaranteed profit from selling the myth and the trader gets the reality of a loss.
The Reality Is..
If you can’t trade with the odds in your favour, you’re going to lose and we have already told you why.
Another reality is that forex trading involves risk.
Day traders think their restricting risk and will have small losses – sure they do but over time they get a lot of them!
Of course one of the well known phrases of trading is “cut your losses and let your profits run” this totally alien to forex day traders – what do they do when they get a profit?
They snatch it!
So they have lots of small losses and a few marginal profits (even day traders get lucky ) and the result is the demise of their account equity – PERIOD.
If you want to win at forex trading – forget forex day trading and either try forex swing trading or long term trend following, where support and resistance levels can be used to generate high odds trades.
Today, most traders are looking for an easy buck and forex trading is not easy, they buy day trading systems with the illusion of low risk, regular profits and that’s all it is an illusion.
The reality is a wipe out of equity.
Avoid forex day trading, if you want to win at FX Trading.