Your wrong about 4 - 5 times trend setups fail. I would say 70% of trend setups work. Its just you don't know what a trend setup is. 1) You need to define a trend. http://en.wikipedia.org/wiki/Trend_lines_(technical_analysis) This is a good definition. 2) You then need to define a setup. A setup is a high probability trade based on experience, back testing, or forward testing. When I say high probability, it means more than 50% this setup should produce a profit. Now lets look at your next theory that there is too much bad news during the day. 1) Use a professional news service. Many use briefing.com, I used CNBC Pro today when I traded. There was actually only good news today and the market was trending up. I took a real trend trade, and made a profit. 2) You do need to use the market to confirm reality. A good or bad news report can come out, and the market will be trending in the opposite direction, so price matters more than these reports, but I have found these reports help with my bias for the day. Now lets look at your other thought, should I trade breakouts or should I trade with the overall direction of the day. Or should I trade swing trades based on higher time frames. 1) This is really what I call developing a trading strategy or edge. Yes, all trade setups even those with edge have losses. No matter what time frame you choose to trade, you will have a losing trade. During the day, I have seen price move more than stocks I have held for months at a time, so for me trading, I rather do it during the day based on my setups. Now lets look at solutions: 1) Decide what type of trades you want to take for example swing, position, scalp, and what time frames you want to trade. 2) Find a trade setup that you want to use, either by looking over charts for patterns, watching the market during the day, having a mentor, paying for a trade course, buying a book, reading over threads here at ET. 3) Test the setup over time keeping a Journal or Excel spreadsheet. For a long time I kept an Excel spreadsheet, it had why I took the trade, did I win, did I lose, summary, was I making the same mistakes. I have found that sometimes taking winning trades is against human nature. 4) Setup some trade management rules with stops and profit targets. 5) Create your own rules of trading. For me this is a Word document that lists my setups and includes some charts which illustrate winning trades based on those setups for my review. Last week I saw I was making the same stupid mistake, and I corrected it, so Fri, Mon, and Tue based on this new rule which I wrote in my document, I have had 3 good days in a row. I hope this is helpful to you. Remember it takes a long time to start trading correctly and to stop making mistakes.
if markets only trend 20 % of the time, then trends fail 80 % of the time. 4 out of 5 trends really fail. Turtle trader was a mentor not just another snake oil vendor , all his funds with real money failed People greater than u failed. http://en.wikipedia.org/wiki/Richard_Dennis
Somebody posted " day trading currencies is extremely difficult" nowadays .50 % of the fundamental moves/profitable trends in FX happen at night , in the Japanese session.That is no good for day traders. 50 % of the volatility of a currency pair is due to one currency e.g euro, 50 % is due to usd , in comparison with crude oil , only 50 % chance of success before trader starts trading fx. There is 100 % chance of success on oil CL . unlike 50 /50 fiat twolet paper. Dealing in sheet/shaky fiat paper , manipulated by crooked governments who can't print commodities i.e gold and oil and silver, but their crappy fiat toilet paper which is bought by the masses.It is not legal tender, C L oil is , Gold is ,everything else is fiat toilet rolls. http://wallstreetmess.blogspot.com/2009/03/public-enemy-1-alan-greenspan.html
Some common advice is to keep your screen the same. The less you change it the better you get to know what's in front of you. The better you know what's in front of you the more comfortable you are with it. Losses are inevitable. If you stick with it you'll see more and more success.
not sure where you are heading with this. so are you giving up on forex trading and focusing now on oil and gold? if you think currency trading is 50/50, then why are you still working on it? moving from 1mins charts to 1hr charts you mentioned earlier? or you want to use this thread to convince everyone that daytrading forex is "extremely difficult" when others have been doing really well with it? it's like sitting in a restaurant and telling everyone in the room that the food is no good, tasteless, and the chef can't cook. but everyone else in the restaurant likes the food and eating well. i guess you can visit another restaurant that suits your taste buds (oil, gold, silver) and leave this restaurant to those who find the food enjoyable. (i did quite good this week daytrading forex, but that's just me. huge trending moves exceeding average trading range on many pairs intraday)
I was making a point about the 50/50 chance on pairs trading, crude is also affected by currency movements, but approximately 25% volatility is due to currency fluctuations. I had a good week on pips but only to give it back , due to discipline, over trading (larger positions) and loss of concentration.
well i certainly disagree with your insistence that forex intraday trading is 50/50 at best, that trends failed often. i held the opposite view as i do trend-following and reversal trades on 15mins chart intraday (using 5mins for fine entry, and 60/4hrs for gauging "trend"). enjoyed the discussions and i will unsubscribe from here. can't agree to alot of what you said so i shouldn't be here. good luck
Here is a report http://www.stator-afm.com/support-files/article_downsw_psychologyoftrading.pdf Here is a quote The greatest number of losing traders is found in the short-term and intraday ranks.This has less to do with the time frame and more to do with the fact that many of these traders lack proper preparation and a well thought-out game plan. By trading in the time frame most unforgiving of even minute error and most vulnerable to floor manipulation and general costs of trading, losses due to lack of knowledge and lack of preparedness are exponential. These traders are often undercapitalized as well. Winning traders often trade in mid-term to long-term time frames. Often they carry greater initial levels of equity as well. CONCLUSION: Trading in mid-term and long-term time frames offers greater probability of success from a statistical point of view. The same can be said for level of capitalization. The greater the initial equity, the greater the probability of survival.
Last week I made good money on overnight swing position trading , but gave it all back with forex day trading.That is how it is going. Here are some great articles on trading psychology Psychology is 90% of trading success say many commentators. http://www.brettsteenbarger.com/Classic_Articles.pdf Overleveraging - the Risks of Forex Leverage http://www.stator-afm.com/support-files/article_downsw_psychologyoftrading.pdf Brett Steenbarger Articles on Trading Psychology and Trading Techniques[/QUOTE]