How do so many people lose money?

[VingTsun]

Originally Posted by europeanson7

What's the point of doing all that stuff if a system like Ozfx's works? I guess what I'm asking is do systems like his (or the Cowabunga system for another example) work? Because if they do I don't see the point in doing all that work.

I am sooo new in this FX stuff...
But mine sense is telling me that only way to be successful is hard work,not taking others hard work.
I have NEVER think about taking some others system when the time comes to think about systems...I am the kind of person that likes to do everything on mine own rather than let others do it for me..A part of this attitude is that i have confidence in my self and i believe that when time comes i will be able to make a damn system.
Mine decision is to trade for a living,it will take few years but this is possible.
May be you have different intentions when it comes about trading.
The point is you MUST know what you are doing.There are bypass ways,but usualy in life they are wrong ways.
Cheers!
VTK

[Andrewunknown]

Originally Posted by europeanson7

What's the point of doing all that stuff if a system like Ozfx's works? I guess what I'm asking is do systems like his (or the Cowabunga system for another example) work? Because if they do I don't see the point in doing all that work.

Meaning, "are they profitable?" Two very different systems which are both, generally, profitable. What does that mean, though? Profitable in backtest, or profitable as they're traded forward by specific traders? There's usually a significant difference.

Making a system "work" is, again, more to do with the trader than the system. Take a better look at OzFx, as an example. Not the outline of the method, but the "signals" Oz would provide and the way in which different people would interpret them. Even Oz would generate signals that didn't correspond to the original system and weren't taken off of AES - Oz simply conjured up trades that were loosely based on OzFx (who knows, maybe he thought they were legitimate) but did not correspond to system criteria. Others, who aren't "dumb", look at the same entry and money management criteria and have remarkably different trades.

The best thing to do is pick a system, backtest it, develop some data on results, and then begin trading it forward. And for added value to the experiment, do it dumb (well, uneducated) about the market but doggedly follow the system, just to see if that's all it takes. You'll soon see what everyone here is talking about....

[Kabish]

I guess "a system that fits you personally" has more to do with your work, time you spend in front of the computer, the money you can risk, etc. rather than if you are funny or depressive.

[scottyPIPin]

This comment has already been mentioned, but I think it's important to mention it again... "Personality" in trading is more or less how you prefer to trade the market. OzFX for example is a longer term strategy that involves trades being open for anywhere from 1-3 or even 4 days. Scalping on the other hand is when trades are on the table minutes or less. Ingots Rainbow on the other hand is a very long term strategy with trades open for weeks or months... All are viable strategies and tend to work if you can "follow the rules", but where does personality fit in? I, for example, tend to be a bit ADD. I like to get in and either walk away and do something else, or get in and out in a very short period of time. Others may feel comfortable with a strategy like OzFX where you open a trade with a 100-300 PIP stop loss and let it ride for days... Not me. Can I follow the directions on OzFX? Sure! And I have. I actually did ok with OzFX; however, it didn't fit my personality. I don't like having my money (fake money at this point) out there in this volitile market for days, but I CAN - just don't want to.

I also want to offer another perspective on things... A strategy that uses indicators may have clean cut rules on when this oscillator does this and that, buy. But do you know WHY? I came into this Forex stuff about a year ago with a similar attitude as I'm seeing here. After screwing around with every indicator under the sun I realized that just throwing indicators on a chart doesn't make me an expert. I needed to know what each indicator was trying to tell me... I ended up surfing the internet, reading technical trading books and Borders, and researching forums to find my answers. Trust me when I tell you this! Knowing WHY a stochastic moves the way it does, and how an ADX can give you an idea of what may happen, or what the RSI is telling you when it's above 80 is VERY VERY important... simply looking for patterns won't always do - I wish it was that cut and dry...

Have fun learning this stuff. It's all very fascinating! It's like a big challenge, and if you have a competitive personality, use that to your advantage and learn learn learn as much as you possibly can.

I normally say happy PIPing, but in your case, Happy Learning, then Happy PIPing!!

[rhodytrader]

Originally Posted by scottyPIPin

OzFX for example is a longer term strategy that involves trades being open for anywhere from 1-3 or even 4 days.

Four days is longer term? Yeah, right. Some folks wouldn't even consider that swing trading (though I do)

[hayden]

speaking chronically, losses come from trades you close at a loss and ones that are closed as part af a margin call... neither being productive, it can seem hard sometimes to choose to avoid one or the other... then you get that rogue news report you didnt read for the pair that u ordered on count that it couldnt get any worse, but it still is... when to pull the plug...

[Kabish]

Yep, sorry, I did a mess with the pages and I was commenting one older reply. Anyway is good pointing it out again.

But once I've started with that I would like to comment another thing that is passing through my mind these days, and is the insistent advice about not going live until you are absolutely profitable in demo.

Well, what I see is that I graduated in the school of Pipsology and read some books and demoed for less than a couple of months and, honestly, I think that demo is fine to learn the basics, patterns and to how to use the indicators (even if i would need a deeper insight of each of them as scotty says). On the other hand, I feel is very easy to be profitable demoing with a $100,000 account (I already are being totally ignorant in this business), where you have much broader margins than I could afford, risking much more that I would do, and when, to put it short, you are not sweating each trade you are entering.

I understand the point of not going live when you are a beginner and also the advices about not opening an account with less than $1000, because you are going to lose your money. But I think too that just with demoing you will never put the neccessary effort on each analysis to make you really learn and deeply understand what is going on, because, let's say it, when is real money involved you really put the effort.

Yes, you know you are not going to be profitable with a small account beign a beginner, but even considering that you will lose it all, is it not a fair price to sacrifice a couple hundred of bucks to have real training?

Btw thank you scottyPIPin for the welcome and for the advices . Maybe do you have any good resource for learning more about indicators? (or you just wikipedia them)

Cheers!

[hayden]

id agree, thats why i did some demos weher you can set the starting deposit and did it for what i could do, then i jumped straight into live with a cents micro account and $20 deposit, man... that first 20c profit i closed was a feeling i never got on the demo servers...

when its really your mony and the profit or loss could really be yours the heat is on, and the emotions really come through...

[Petronix]

Originally Posted by hayden

id agree, thats why i did some demos weher you can set the starting deposit and did it for what i could do, then i jumped straight into live with a cents micro account and $20 deposit, man... that first 20c profit i closed was a feeling i never got on the demo servers...

when its really your mony and the profit or loss could really be yours the heat is on, and the emotions really come through...

Damn, finally i see some intelligence spark on this forums! Hayden, good on you for going live, put in a bit more around 200 buck will give you plenty of practice on micro lots, even if you blow the whole thing, the lessons you learn will cost much more!!!

[hayden]

Originally Posted by Petronix

Damn, finally i see some intelligence spark on this forums! Hayden, good on you for going live, put in a bit more around 200 buck will give you plenty of practice on micro lots, even if you blow the whole thing, the lessons you learn will cost much more!!!

i only could spare $20 (it was going to be originally $10) !, as im living at home unemployed...


i plan to turn that $20 into a lifetime of riches though... just gotta avoid the ol' margin call...

im allready upto $79 in about 5 days trading !