How do so many people lose money?

[BrianSNJ]

I trade with MB Trading. Fast, they allow trading within the spread and only charge a commission based on lot size traded. So if you trade a standard sized lot (100K) you will be charged $5 in and $5 closing it and you also have to take into account the currency value. If you trade 1 mini lot (10K) the comm. would be roughly $.50 in and $.50 out = $1 total.
No spreads to worry about.


Example from MB website -
USD/JPY
US dollar based pairs: $5.00 per 100,000 shares.
Formula: Deal Size x 0.00005

100,000 shares (10 lots) x $0.00005
= $5.00 commission

EUR/USD
100,000 shares (10 lots) x $1.3310 x $0.00005
$133,100 x $0.00005
$6.665 = $6.67 commission

I am just starting with them. So far, I am happy. Executions are QUICK! I get in and out, scalp a quick 5 pips and make $50.

You can trade in sizes ranging from 1 mini all the way up. Since I am testing a new system, I am using a DEMO account. Once I am ready, I will trade it live with only 1 mini lot until I am comfortable, then I will trade 1 standard lot.

OH, they also have a NON-EXPIRING demo. You can practice all you want, it never expires.

BUT - do not open an account with them if you want charts, etc.

I use StrategyBuilder FX. They give you a NON-EXPIRING demo that you can use for charting, EAs, practicing, etc.


Finally, I am not getting any money to promote MB. I am just sharing my circumstances. As always, read, read, read and chat, and think and do your due diligence! lol

[mytwopips]

Originally Posted by Kabish

hayden, which broker do you use? I only know OADA with such flexible lots...

IBFX mini accounts let you trade mini, micro, and nano lots. You can dial in your lot size all the way to the penny a pip that you want.

Example:
If I wanted to trade $1.23 a pip, I could.
If I wanted to trade $0.02 a pip, I could.

At first I thought only Oanda allowed that. After I opened my live with IBFX, I found they allow you to fix your lots too.

P.S.
Now before someone comments on different pairs being different amounts, I already know that and assume readers know that too. I am just trying to make my example as simple as possible without getting too technical or confusing.

[BrianSNJ]

Originally Posted by mytwopips

IBFX mini accounts let you trade mini, micro, and nano lots. You can dial in your lot size all the way to the penny a pip that you want.

Example:
If I wanted to trade $1.23 a pip, I could.
If I wanted to trade $0.02 a pip, I could.

That is nice...being able to trade .02 per pip. That would be handy for a long term trend following test. Although, probably a demo would offer the same experience since you would not be that involved. I guess you could do it for short, day trades too and get the "real life" experience on the cheap.

[Kabish]

IBFX looks sweet, mytwopips, but is only Windows compatible, and I'm on a Mac

Thank you anyway for the info.

[mytwopips]

Originally Posted by Kabish

IBFX looks sweet, mytwopips, but is only Windows compatible, and I'm on a Mac

Thank you anyway for the info.

They use MT4. There's no MT4 for Mac?

[Kabish]

No, it was one of the first things I looked to since everyone here talks about MT4. But is only for Windows.

Maybe I should go trought Parallels and work with Windows...?

[Andrewunknown]

Originally Posted by Kabish

No, it was one of the first things I looked to since everyone here talks about MT4. But is only for Windows.

Maybe I should go trought Parallels and work with Windows...?

I partitioned my (Mac) laptop's hard disk, set up Windows on the other side, and now run both OSX and Windows natively. The only hassle there is pinging back and forth between the two sides if, for example, I want to pull a chart from MT4. So, it can be done, if with a bit of difficulty.

[Kabish]

I had Parallels and installed it on my virtual Windows partition. It looks like a nice piece of software but nothing I cannot do with the tools that the brokers I've seen so far provide, except the automated trading that is something I'm not interested while I don't become experienced.

I have been trying lately the IGMarkets broker and I'm happy, anyone has ever tried it live?

[triphop]

Going back to the original poster, why so many people lose money, I met a broker who said:

1) 80% of clients regularly lose money (not 95% - I'd always wandered where this figure came from).

2) Almost every losing customer has more winning trades than losing trades. Which is odd when you think of it. Only these winning trades are generally only a few pips, with the losers being 100+

So back to the usual issues of cutting winners short and letting losers run. I'd add to that they'll doubtlessly be bad money management thrown into the mix as well. And finally, you'd be amazed /horrified how bad so many of the systems are if you backtest them properly. The vast majority have the same expectancy as coin-tossing.

Good luck - question everything!

[tymen1]

Originally Posted by triphop

Going back to the original poster, why so many people lose money, I met a broker who said:

1) 80% of clients regularly lose money (not 95% - I'd always wandered where this figure came from).

2) Almost every losing customer has more winning trades than losing trades. Which is odd when you think of it. Only these winning trades are generally only a few pips, with the losers being 100+

Good figures, Triphop.

.............................. I'd add to that they'll doubtlessly be bad money management thrown into the mix as well

If you want to see some proper money management in real live action, particularly with regard to a correct risk/reward ratio, you can find it discussed extensively in my thread :

THE JOY OF CANDLESTICK TRADING - a Learning Experience

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