Can we really WIN?
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  1. #1
    Join Date
    Dec 2006
    Posts
    99

    Exclamation Can we really WIN?

    well, i know the asnwer to this question but i just want people to really think about it. when i first got introduced to the FOREX i had the impression that it was a 50:50 chance on a blind guess to make money. the way i was taught in the 4 hour seminar gave the impression that all i have to do is decide weither the market was going up or down. that it thats all. pick one, trade it and cash out big. probably after i had a 50% drawdown was when i realized that things are not so cut and dry.
    i know Babypips is an awesome site and it has respored my confidense in myself and i know many newbees are just so excited after gradulating and cant wait to get out and make some money but STOP!!!!. WAIT A SEC!!! is it really that easy? are things so cut and dry? im not here to blame anyone for my failure but the more digging i do the more i worry that maybe the odds against me are a lot higher then i realized.

    lately ive been looking for a broker and when Oanda was introduced to me i was so excited. ive been saveing up some money to open an account and ive been demoing for about 3 weeks now. the broker is not perfect but according to reviews from traders who hold accounts with them and from review blog sites, oanda is the best. ive been to forexbastards, check it out, read through all the reviews from users. Oanda only rates a two out of 5. i know there are alot of bad traders who want to blame their brokers when they mess up and i know that there are also alot of news traders having trouble makeing money with their brokers but OMG!!! after reading all the negative reveiws im really feeling sick.
    check out:
    http://www.forexbastards.com/broker_reviews.shtml
    http://www.goforex.net/forex-broker-list.htm
    http://www.fxstreet.com/brokers/forex-brokers/
    http://www.forexfactory.com/index.ph...=forex_brokers
    http://www.currencysecrets.com/2005/...roker-reviews/
    http://www.fx-reviews.com/
    now im not excited anymore about trading. infact im a bit scared. there is just so many problems with all brokers. i thought that picking a broker that is regulated, the more regulatory agencies its regulated by the better, protect you and your money better. but the truth is, even that doesnt protect you.

    THE TRUE COST OF TRADING
    many brokers claim that they get paid only by the spread. DONT BE QUICK TO BELIEVE THIS. there are so many hidden costs, its actually disgusting. some people say dont complain, its just the price of doing buisness. but come on!!! i dont mind paying an extra 15 pips per trade upfront if my broker was honest about what it was doing and why it was doing it. instead they sneak the extra pips right under your nose. the only way you will see the difference is if you actually look. we are quick to run away when we see a broker with a commission but check it out first. Im not too crazy about ECNs but they may be the only way to trade in a few year.

    read this
    http://www.forexfactory.com/forexfor...3&page=2&pp=15 (download the whole PDF... infact read the whole thread)
    http://forexfacts.port5.com/index2.htm (same as the PDF download)
    http://www.investopedia.com/articles...topHunting.asp (stop hunting info)
    http://www.fx-dealer.com/articles/stophunting.asp (more stophunting info)
    http://www.elitetrader.com/vb/showth...pagenum ber=1 (bucketshops - MM VS ECN)
    http://market-geeks.com/articles/009_StopHunting.php (stop hunting... again)
    http://www.forexfactory.com/forexfor...ead.php?t=7349 (complaining about brokers, lots to read so dig in . infact read all the stickies in the broker discussion)
    http://www.forexfactory.com/forexfor...t=stop+hunting (stop hunting. i hope i didnt post this link twice... sorry IA)
    http://www.investopedia.com/articles...arketmaker.asp (ECN Vs MM)
    *sign* if only slippage was all we had to worry about

    im not trying to freak anyone out here but before you start trading you need to know who you are trading against. for quite a while ive been waiting for someone to give me a name of a good broker that allows scalping and news trading (without widening spreads, manipulating price feed, or just plain ol' locking out clients form their platforms). and i have yet to be given a name. Even good ol' Oanda, " the people's favorite", has been up to some nasty tricks. even on their own forum there are some threads where people are complaining about their practices and yet no reps from the company has responded to the negative claims. we all need a broker if we want to trade the forex. so at the very least we can learn the brokers' and the "big guys' " game and find a why to beat them. the forex is not as hugely regulated market like futures and stocks are (although they too have some of the same problems). your broker decides the price at which you will trade by(all brokers but MM are the ones you should worry about). many can even enter prices manually and if they make an "error" you pay for it. read your agreenment, they cant be held responsible for their own "mistakes". but many people believe that their actions are purposeful(i really dont know if its true but im definately watching out).remember, you are playing their game, on their terratory with their tools. thanks for reading and happy trading .. if there is such a thing still.

    good luck.
    Last edited by honeb; 01-02-2007 at 09:13 PM.

  2. #2
    Join Date
    Dec 2006
    Posts
    12
    If you wish trade the news, you will have to go with a non-dealing desk broker that uses STP (straight-through processing) and trades directly on an ECN (electronic communications network) with interbanks.

    The reason brokers widen spreads or lock platform during times of news is to protect themselves. Since most brokers offer fixed spreads, during news, they're unable to guarantee those spreads, so they lock platforms. Other brokers because they take the opposite side of your trade will widen spreads or manipulate price (rarely done these days in G8 countries due to tougher regulatory oversight) to make sure they don't lose money.

  3. #3
    Join Date
    Dec 2006
    Posts
    99
    what really facinates me is this thing called "Stop hunting". it really fustrates many traders. there are so many threads talking about it. and one recommentation was that people just stop putting stop losses . that goes against everything most traders are tought. ALWAYS ALWAYS PROTECT YOURSELF!!! but then again its these brokerage firms that host alot of these seminars and tutorials to begin with. its only natural for them and the big guys to get in the game and use it against us. i thought stop hunting was just totally scadelouse but when you look closely its the amateurs that get caught up in it by puting their stoplosses in obviouse areas that can easily be targeted. the truth of the matter is, if you cant beat 'em, join 'em. instread of being hunted try targeting areas that are being hunted. so no one should be crying about stop hunting if no one is stopping your from playing the game. also you much watch out for TP orders. it seems that these areas are targets too. rather then trip these areas, they actually get missed and the market retraces just shy of these areas. lol
    Last edited by honeb; 01-02-2007 at 10:03 PM.

  4. #4
    Join Date
    Dec 2006
    Posts
    184
    Honeb,

    After reading your first post it seems that you are quite panic striken about trading now. I want to try and encourage you or cheer you up a little.

    First and foremost, DON't PANIC. When you trade, it needs to feel easy and relatively free of panic. If all of your above reasons are going to lead you to feel fear and panic with every single trade, then it implies that there is some internal conflict with trading or with the methodology you wish to pursue.

    If i understood your post correctly, you are looking to scalp and news trade. These are some of the toughest trading methodologies to successfully execute. This is precisely when spreads widen and stops are hunted. Please forgive me if i am stating the obvious but when scalping, the spread is what kills you anyway. If you are scalping 5 pips on GBP/USD, then it means you must make 9 pips to close the trade with net 5 pips, because you are starting off at a loss because of spread. On the losing side, however, if you have a 10 pip stop, then you really only have to lose 6 before your trade closes (again because of spread). This is very demanding. I'm not suggesting it's impossible, i'm just saying it is very difficult to manage a healthy risk:reward ratio when doing it and it is the very thing traders are doing when they are 90% right but still end up losing. My old trading partner practically lost 40K trying to scalp. He didn't have a losing trade in months taking measly 4-5 pip gains after news releases but gave it all back in 2 hours with one trade he couldn't close.

    News trading is not meant to be easy. It is when the most volatility exists and most newbie traders think they can make a killing and treat reports like slot machines. If you insist on trading news, trade it after a certain time has elapsed after the release is out. News trading is full of profit potential, but the fact is there is nothing more risky for your account if it is not managed with precise timing and execution. And even then it's very hard. Brokers hate people who straddle the news and that is just the reality. We can either continuously be upset about it or just accept the rules and find a way to deal with it. You said it right, we need brokers. Brokers may be sneaky but they don't care about sabotaging our tiny accounts. Stop hunting, in my opinion is really a non-issue if you place your stops properly, outside of the market noise.

    All this to say, why must you trade the news or scalp trade? Those seem to be the quick way to riches but nothing could be further from the truth. If it seems quick and easy, then it is very likely the least effective route to take. It seems unscientific, but to be honest it is the very reason i started to stay away from news and scalping and day trading in general.

    I hope you are not considering quitting. At the very least consider some other style of trading that triggers less panic or stress. Why not consider swing trading, or trend following or something a little longer-term? The stress levels are much lower and you are not subjecting yourself to the same broker tactics you outline in your post.

    Don't fear trading or brokers honeb. I think if you were to scrutinize every single unsuccessful trader's trades, i'm 100% sure you would not find broker tactics to be the focal point of his/her failure.

    Keep your head up and stop thinking about brokers. They may not be the boy scouts we want them to be but i also don't beleive they are out to sabotage us. Only we do that. We just have to accept certain truths and work around them.

  5. #5
    Join Date
    Dec 2006
    Posts
    99
    dont worry im not going to quit trading. if i sound paniced its because i just fell hard from a place where i was so excited and eager to get in the market. IMO these emotions can be dangerouse. im right now at a place where im more realistic and im going to take my time getting back into the market. i do focus on the bad where people give details about what is actually wrong (the fair negatives). the postives are easy to find and they mostly all you see. but you are definately right about the fact that a trader who fails is not because his broker is messing with them. if your bad, your bad, its just that with what i was talking about before you get taken out easier and faster.

    anyways, im not a scapler or news trader. you are right. these are the most riskiest trading styles and everything that ive been talking about, compounds the risks. im just surprised that these are still viable methods of trading and i am very curiouse how the successful traders manage to trade like this and what they have to say about everything i brought forward. i was actually studying how to be a news trader but with all the noise i cant see how it would be possible for me. ill just stick with trading technicals for now. im a swing trader and maybe i might consider long term trading w/carry trading in the mix. that seems to be safest bet for me.

    thanks for being the voice of reason though. you brought my confidence up a few notches.
    Last edited by honeb; 01-02-2007 at 11:42 PM.

  6. #6
    Join Date
    Dec 2006
    Posts
    40
    How I agree with Pipbull. One broker commented to me that if you are going to try and straddle the news, you might as well go to the casino and put your money on black. Those in the know also tell me that scalpers are unpopular with brokers and are liable to be 'flagged' and encounter all sorts of problems with their accounts. Far better to profit from the RESULTS of the news which in my experience is much safer!

    HAPPY NEW YEAR

  7. #7
    Quote Originally Posted by pipbull View Post
    Honeb,

    After reading your first post it seems that you are quite panic striken about trading now. I want to try and encourage you or cheer you up a little.

    First and foremost, DON't PANIC. When you trade, it needs to feel easy and relatively free of panic. If all of your above reasons are going to lead you to feel fear and panic with every single trade, then it implies that there is some internal conflict with trading or with the methodology you wish to pursue.

    If i understood your post correctly, you are looking to scalp and news trade. These are some of the toughest trading methodologies to successfully execute. This is precisely when spreads widen and stops are hunted. Please forgive me if i am stating the obvious but when scalping, the spread is what kills you anyway. If you are scalping 5 pips on GBP/USD, then it means you must make 9 pips to close the trade with net 5 pips, because you are starting off at a loss because of spread. On the losing side, however, if you have a 10 pip stop, then you really only have to lose 6 before your trade closes (again because of spread). This is very demanding. I'm not suggesting it's impossible, i'm just saying it is very difficult to manage a healthy risk:reward ratio when doing it and it is the very thing traders are doing when they are 90% right but still end up losing. My old trading partner practically lost 40K trying to scalp. He didn't have a losing trade in months taking measly 4-5 pip gains after news releases but gave it all back in 2 hours with one trade he couldn't close.

    News trading is not meant to be easy. It is when the most volatility exists and most newbie traders think they can make a killing and treat reports like slot machines. If you insist on trading news, trade it after a certain time has elapsed after the release is out. News trading is full of profit potential, but the fact is there is nothing more risky for your account if it is not managed with precise timing and execution. And even then it's very hard. Brokers hate people who straddle the news and that is just the reality. We can either continuously be upset about it or just accept the rules and find a way to deal with it. You said it right, we need brokers. Brokers may be sneaky but they don't care about sabotaging our tiny accounts. Stop hunting, in my opinion is really a non-issue if you place your stops properly, outside of the market noise.

    All this to say, why must you trade the news or scalp trade? Those seem to be the quick way to riches but nothing could be further from the truth. If it seems quick and easy, then it is very likely the least effective route to take. It seems unscientific, but to be honest it is the very reason i started to stay away from news and scalping and day trading in general.

    I hope you are not considering quitting. At the very least consider some other style of trading that triggers less panic or stress. Why not consider swing trading, or trend following or something a little longer-term? The stress levels are much lower and you are not subjecting yourself to the same broker tactics you outline in your post.

    Don't fear trading or brokers honeb. I think if you were to scrutinize every single unsuccessful trader's trades, i'm 100% sure you would not find broker tactics to be the focal point of his/her failure.

    Keep your head up and stop thinking about brokers. They may not be the boy scouts we want them to be but i also don't beleive they are out to sabotage us. Only we do that. We just have to accept certain truths and work around them.

    Well put. There are safer methods to trade the news, not requiring to trade on the spike. Guys like forexbastards, the Rob guy, see orders through the main feed, so this obviously does not affect them. True- brokers are out to stop scalp traders.

  8. #8
    Join Date
    Dec 2006
    Location
    Colorado, USA
    Posts
    142

    Default How & where to place stops properly?

    Quote Originally Posted by pipbull View Post
    Stop hunting, in my opinion is really a non-issue if you place your stops properly, outside of the market noise.
    For me, I just watch and wait on the sideline during major economic news release. It's too risky.

    Pipbull I am curious to know what methodology do you use to properly place your stops outside of the market noise. How many pips have you seen broker's platform can spike the price just hit your stop loss? Is it really that hard to regulate brokers platform to avoid this type of hunting?

  9. #9
    Join Date
    Dec 2006
    Posts
    99
    Quote Originally Posted by forexcranium View Post
    True- brokers are out to stop scalp traders.
    alright, can you name some "true-brokers" please. thanks

  10. #10
    Join Date
    Dec 2006
    Posts
    184
    Quote Originally Posted by ramrocket View Post
    For me, I just watch and wait on the sideline during major economic news release. It's too risky.

    Pipbull I am curious to know what methodology do you use to properly place your stops outside of the market noise. How many pips have you seen broker's platform can spike the price just hit your stop loss? Is it really that hard to regulate brokers platform to avoid this type of hunting?
    I think you are smart for waiting on the sidelines during economic releases. At the very least, if you have a position open and it is in profit, you should either cash out or lock in some profit before the release.

    Since i am swing trading, the stops i place are a safe distance away from the previous swing high or low, where support and resistance can be expected to hold. The other technique you can use to safely avoid random market noise is the ATR*3 (Average True Range). Look at the ATR of whatever time frame you're in over the last 14 periods, take the average of that, and multiply that by 3. This will place you with a wider stop, but it is considered by many to be the best way to stay away from the noise. I don't use that technique so i might be getting the exact calculation wrong, but that is the jist of it. You can read about it anywhere and everywhere. Just make sure your risk:reward remains favorable.

    Cheers

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"Failure is a part of success. There is no such thing as a bed of roses all your life. But failure will never stand in the way of success if you learn from it."
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