If you could get an idea of when and how a completely hopeless loser trader would trade, would this enable you to devise a profitable strategy by taking the other side of his trading decisions? If so, how would you go about finding out how the "loser" would trade, and what sort of signals would he generate?
I don't think its possible.. Only if the losing trader is a disciplined trader that takes all and only the signals his system generates.. which would mean the system he is trading is a loser... Most losing traders trade emotionally.. not following a well defined trading plan which would make it very difficult to trade the oppositte of with any consistency.. Just my 2 cents.. ( I myself I am not a consisten winner.. so speaking from experience on the losing side)..
I'm not thinking of the struggling trader who makes some good decisions, but then makes some mistakes that outweigh them. Rather I'm thinking of the completely hopeless case that only ever seems to get in or out at a significant top or bottom in the market. IMO a key feature is that they don't realise they are terrible.
Are not most of these fx shops counting on being on the other side of poor traders plus getting the spread and adjusting their market to hurt them
It only hurts when you are attempting to incorporate daytrading tactics from scalping stocks into the FOREX market which was never intended for such a purpose but rather for LONGER TERM TREND FOLLOWING!
your assuming that the trade decisions of a Loser will generate a profit on the opposite side of every trade. this is not the case. If you want to learn to trade correctly you need to study the correct things and trade setups. NOT STUDY INCORRECT THINKING AND CONCEPTS OF FOOLISH THINKING! Hang around with 4 fools and you will become fool number 5.
Taking the opposite side of a loser? It does not work because often losing trades can be traced to trying to trade in a FLAT market. Both of you will end up broke. Not a good thing.
I will point somthing very improtant. Loser also enter randomly, and they might be in context with the weekly trend and sit on the trades and Profit huge. I remember when i started trading last year and did know 10 time less than what i know now, I made $12K profit in 7 trading days on $63K x 4times margin. But latter i lost $32k in matter of 2 monthes. Today and never in future i might be able to Gain $12K in 7 days, and i entered randomly as a very loser trader
Nana Trader points out something very true. The less you know , the easier it is to make a ton of money OR lose a ton on money in a short time. Only with experience does your game flatten out in one direction or the other. Hopefully in the green.
The bucket shops and fx shops and probably all the brokerages know that most traders take their winners and let their winners run. Then other losing traders take their losses but take smaller winners. Finding an edge seems to be a difficult process so I think yes you could take the opposite side of a losers trade because you are probably going to have at the very least cut losses and big winners. Finally how many times a year does a market break so hard one way or another that point do not get retested. I do not know but that is a good question.