What I've learnt after 4 years of Forex Trading
Page 1 of 7 1 2 3 ... LastLast
Results 1 to 10 of 67
  1. #1
    Join Date
    Jun 2013
    Posts
    55

    Talking What I've learnt after 4 years of Forex Trading

    I'm a computer programmer who got into FOREX trading about 4 years ago. Since then, I've been analysing this market, and this are my conclusions:

    1. This is a random market.

    2. Market moves (considerably) only when news comes out.

    3. Your broker will not quote you when market moves considerably. Your stops will be ignored and your money management strategy will be ruined. Of course, this does not happen when you backtest a trading strategy.

    4. You'll be profitable only while you are lucky.

    5. Don't be fooled, the only guys making solid money in this market are trainers, brokers and companies selling trading bots (that work until you run out of luck).

    I will post on each of this points when I have time, cause I don't want to sound like another frustrated trader. I opened a 300$ account 4 years ago, and I have 150$ now, so it's not a big deal, I don't really care.

    This has been enough to try some systems, and programatically and statistically analyze this market, so I can back up all of this statements with some kind of "proof".

    So the only point of this posts are to share my experience, and hopefully find someone to open my eyes and stop me from quitting this market and putting my time into something else. Coz believe me, I've really tried making this work for me, but no luck so far!!

    The last thing I'm planning to do in FOREX is putting one of my "random market" bots in my account, and see if I hit the jackpot!

  2. #2
    Manxx's Avatar
    Manxx is offline Superior Master Contributor and Member
    Join Date
    Aug 2015
    Location
    “A ship is safe in harbor, but that's not what ships are for"
    Posts
    861
    Quote Originally Posted by averied View Post
    1. This is a random market.
    I am not sure that "random" is the right description here. Perhaps erratic, complex, unpredictable, confusing, illogical, and surely many more descriptions might apply, but not really random. What one sees in market movements is often a function of what dimension of the market one is looking at. If one stares too long at price movements on a 5m timeframe then it is certainly hard to find any logic there. But on a daily, weekly, monthly timeframe there are clearly trends that form and continue and have an identifiable reason for them - albeit often after the event! - but that does not make it random, just maybe a little camouflaged.....

    We should always remember that foreign exchange is not all about speculators just taking a view. There is a real, commercial movement of funds between currencies which relate to changes in economic and trade conditions, government monetary policies, investment opportunities, risk developments, etc, etc. These are not random changes. However, when we add a considerable layer of speculative trading on time frames from weeks to mins or even ticks then there are interests in both directions at every pip we pass through.

    This is why we need a strategy that can identify the red line that is winding through the fog of price irrationality and a brain that can interpret what is realistic.

    One thing is for sure, there is no point is seeking an automated approach that works on repeated reaction anticipation in response to pre-determined events because a currency does not always react in the same way to the same events - and, of course, forex is about a relationship between two currencies, never just one.


    Quote Originally Posted by averied View Post
    2. Market moves (considerably) only when news comes out.
    Certainly, a currency pair may move considerably to certain news events, but not to all. You are referring here to a fast considerable move. But there are also moves that are considerable that can take place over a period of even years. Structural changes in economies, natural resources and industries, for example, can take a long time. Again, this depends on the timescale one is focusing on. If you only look at a 1 hour or 15m timeframes, for example, you will be see a disproportionately large and fast move after certain news events that may not be so unusual on a longer term chart.

    Quote Originally Posted by averied View Post
    3. Your broker will not quote you when market moves considerably. Your stops will be ignored and your money management strategy will be ruined. Of course, this does not happen when you backtest a trading strategy.
    I have never had this problem - ever. Even in relatively fast markets. I do not personally look to trade volatile data releases like NFP, but the unexpected can and does happen at other times, too - I have not had non-quotes or ignored stops. There are, of course, the famous "black swan" type events, which fit your description, but these are extremely rare and certainly not the norm for a trading environment.

    Of course, there are brokers who will be guilty of these types of practices and it is a very important part of the trader set up process to find a reliable broker.


    Quote Originally Posted by averied View Post
    4. You'll be profitable only while you are lucky.
    "Luck" in trading has been the topic of many threads here, and no doubt will continue to be. No doubt, luck is a useful friend, but I think profitability is more likely to related to an effective assessment of probabilities combined with a suitable risk/reward management and exposure control. These, I do not believe, can be easily or optimally embedded in an automated system which is designed to expect markets always to react in the same way to the same input - to quote a famous president "that won't happen".

    Quote Originally Posted by averied View Post
    5. Don't be fooled, the only guys making solid money in this market are trainers, brokers and companies selling trading bots (that work until you run out of luck).
    Well at least this makes a change from the usual claims of conspiracy amongst the large banks, who apparently just manipulate the markets to feed off all the retail - which, if true, would be the very opposite of a random market....

    Yes, these guys do often make money, but that is their business. Our business is trading. If we don't make money trading then that is our own fault. I pay my broker for a service. I could not access these markets without them. They designed my trading platform and give it to me for free. They provide me with a market spread that is equivalent to interbank rates. They provide me with leverage to effectively trade an amount that is larger size than I actually have in my bank account. I am happy to pay a reasonable amount for all this and I don't consider it a rip off.

    Again, of course, we all know there are cowboys out there selling garbage to the innocent. But, again, it is up to us to tread carefully and get our learning from reliable source. In this respect, as in many others in trading, it can be a lonely walk.

    ...Just some thoughts on a quiet Friday evening..........
    Last edited by Manxx; 05-19-2017 at 02:18 PM.

  3. #3
    Join Date
    May 2017
    Location
    Fort Worth, Tx
    Posts
    31
    1. This is a random market.
    Even if this is true. It would still be possible to be profitable. For me, entering into a trade long or short isnt a matter of expecting the market to go up or down. The truth is i have no idea. Instead, i acknowledge the fact that i have no idea what the market is going to do. I see my trades as a low risk/high reward oppurtunity based on price action, s/r levels and market conditions

    2. Market moves (considerably) only when news comes out.
    I agree

    3. Your broker will not quote you when market moves considerably. Your stops will be ignored and your money management strategy will be ruined. Of course, this does not happen when you backtest a trading strategy.
    Find a good broker
    4. You'll be profitable only while you are lucky.
    The harder and longer you work, the luckier you become

    5. Don't be fooled, the only guys making solid money in this market are trainers, brokers and companies selling trading bots (that work until you run out of luck).
    There are succesful traders out there. Not many, but they exist

  4. #4
    Nice post Manxx.
    Although 4 years seems a long time it really isn't when it comes to clawing your way through and out the other side of "trading hell". It's not only time you need but a continued obsessive drive to succeed when it doesn't seem even remotely plausible.
    The only thing I can offer by way of encouragement is my own experience. As I've mentioned previously my husband took almost 8 years...many long and difficult years of mistakes and useless, misleading and damaging advice, psychological self-sabotage and a long held fallacy of what is actually required (mathematically speaking) to come out ahead. The seemingly simple concept of accepting a trade as being one very small part of a much larger whole, and being able to sustain that acceptance through many many losses is an exceedingly difficult concept to master.
    Was it all worth it? Ultimately, yes it was. Testament to the fact that it can be done ...he taught me and now I am just starting to teach my daughter the very basics. A wild ride ahead methinks!
    Being able to trade from home and, given enough time and patience, make it work, is an opportunity I think we now take for granted. How people perceive, grasp, utilise and persevere with "opportunity" is where the difference between success and failure can often lie.
    Patience, patience, patience...and then when you think you have used up every ounce of patience you have....dig a little deeper and you will find a little more.

  5. #5
    Manxx's Avatar
    Manxx is offline Superior Master Contributor and Member
    Join Date
    Aug 2015
    Location
    “A ship is safe in harbor, but that's not what ships are for"
    Posts
    861
    Quote Originally Posted by FundamentallyFlawed View Post
    Although 4 years seems a long time it really isn't when it comes to clawing your way through and out the other side of "trading hell". It's not only time you need but a continued obsessive drive to succeed when it doesn't seem even remotely plausible.
    I can certainly concur with this. Although there is no set timescale for the retail trader's apprentice period, it is certainly most often measured in years rather than months. And 4 years is not anything extreme or unusual at all, probably quite realistic in fact.....

    Quote Originally Posted by FundamentallyFlawed View Post
    The only thing I can offer by way of encouragement is my own experience. As I've mentioned previously my husband took almost 8 years...many long and difficult years of mistakes and useless, misleading and damaging advice, psychological self-sabotage and a long held fallacy of what is actually required (mathematically speaking) to come out ahead. The seemingly simple concept of accepting a trade as being one very small part of a much larger whole, and being able to sustain that acceptance through many many losses is an exceedingly difficult concept to master.
    Was it all worth it? Ultimately, yes it was.
    This interests me. We talk a lot about a trader's problems and difficulties but rarely about how it affects other members of a trader's family and friends.

    So you were not a trader yourself during your husband's 8 years of walking the financial "valley of death". How did this affect you? How did you feel about it at the time and how did you understand what was going on? Did you have deep concerns at any time about your financial security or your husband's health, etc? Did you sometimes wonder what he could possibly be doing just watching charts and occasionally scribbling things down and sometimes suddenly bursting into a bubbling hysteria of excitement and mumbling incoherent terms and exclamations? Did you learn a lot of new swear words that were previously unknown to you? Did you ever get annoyed when he was clearly miles away in his own thoughts as you were explaining something very important to him?

    The pressures of trading are not always entirely our own problem! My wife has gotten used to it already ages ago and just occasionally mutters as she passes by, "How are the curves today?"
    Last edited by Manxx; 05-20-2017 at 06:12 AM.

  6. #6
    Join Date
    Mar 2017
    Posts
    26
    Yes, it’s a random market! But professional Forex traders are able to understand the hidden meaning of market movements! So, they are trading with a high probability ratio! But, there is no connection with luck! If you opened a trade according to the market flow, then definitely you’ll get here TP otherwise not! By the way, You have spent here almost 4 years but till now you are struggling that means your learning process was wrong!

  7. #7
    Join Date
    May 2017
    Posts
    18
    Quote Originally Posted by averied View Post
    1. This is a random market.
    Not in my opinion.

    There wouldn't be so many people consistently making a living from it if that were true.

    Making more than a living, really. Making six-figure salaries and seven-figure bonuses. Many people.

    A very small proportion of those active in the market, of course, but still many people.

    Quote Originally Posted by averied View Post
    2. Market moves (considerably) only when news comes out.
    This depends on what you mean by "considerably" and on the time-frame you're looking at.

    The extent of moves is correlated with the time-frames.

    I won't repeat everything Manxx said but in my opinion, markets can move considerably even in the absence of news.

    Quote Originally Posted by averied View Post
    3. Your broker will not quote you when market moves considerably. Your stops will be ignored and your money management strategy will be ruined.
    This hasn't been my experience.

    I think we probably trade very differently and in different places.

    I use brokers that prefer me to win than lose because they're not trading against me.

    I don't trade the news. I avoid it.

    Quote Originally Posted by averied View Post
    4. You'll be profitable only while you are lucky.
    In the short term there's always a bit of luck in it.

    In the long term that evens out.

    That's why some people make a consistent living while many more people come and go and replace each other endlessly without success.

    That's not just luck, of course.

    Quote Originally Posted by averied View Post
    5. Don't be fooled, the only guys making solid money in this market are trainers, brokers and companies selling trading bots (that work until you run out of luck).
    And all the people making their livings? And the institutional ones making their 7 figures year after year?

    Are they all imaginary people?

    Sure, it's easier for most people to make money by selling training, services and software.

    Sure, that side of it is a scammy trade.

    That's because there are so many naive noobs with unreasonable expectations and they're a soft touch for scammy vendors.

    Quote Originally Posted by averied View Post
    I don't want to sound like another frustrated trader.
    Honestly, you do sound like that.

    You made sure of it by mentioning your 4 year struggle and saying "I've really tried making this work for me, but no luck so far".

    Quote Originally Posted by averied View Post
    hopefully find someone to open my eyes and stop me from quitting this market
    It seems to me that keeping on trying the same things that you've been trying for 4 years probably isn't going to help you.

    Your current beliefs about the markets, and about luck and skill, and about how you can trade, make that most unlikely.

    I think either a really dramatic shift in viewpoint and beliefs, or a different hobby might work out better for you.

  8. #8
    Join Date
    Oct 2016
    Location
    Devon, UK
    Posts
    361
    Possibly on a minute by minute basis the market is random. And it might be impossible to gauge where price will end up in 10 minutes' time nor how how and how low it went on the journey there. But trading forex on a 10-minute time-frame is a game for only the top rank of skilled traders.

    Look at market behaviour on a multi-day basis however and you find that price action is clearly not random and can be very much more easily a route to profitable trades.

    I have to see forex day-trading as the equivalent of base-jumping. A great thrill when you land OK: but not a sport that generates minor injuries.

  9. #9
    Join Date
    Jun 2013
    Posts
    55
    It's been 4 years, but been hearing the same stuff from my first month. You can see things more clear in bigger timeframes, and it will not seem so random. The only difference between long term and short term strategies, is the time it's gonna take for you too run out of luck. I will talk more on this sometime.

    Another big one is people talking about risk reward ratio. They say, if your risk reward is 4 to 1, you only need to be right once every 4 trades, and you will still be profitable. Guys, seriously? Do the math, it's all about statistics.

    If your risk reward is 4 to 1, statistically on the long term your profit will be zero; actually negative, as you are paying either spreads or comissions. If your Stop loss is 10 pips away, and your take profit if 40 pips away, it's 4 times more probable that the trade hits the SL.

    So, what people try to do? Find an edge?, find a market situation where it's more probable that the market direction favours you? You cannot do this in a random market. Actually, you're right, it's not exactly random, only because we can predict that the market will move (very probably) when news comes out. But that's it, you cannot "probably" guess the direction of the move. So at the end, it might not be literally random, but I will correct myself:

    1. This market behaves like a random market.

    Let's talk more about finding an edge. What people will try is technical analysis, fundamental or a combination of both. Of course, those who use fundamentals, will tell you that you cannot program a bot. Why not?, I can tell my bot not to trade when news are coming (there are economic calendars), and I can stop them at any time. And about managing a trade, I can tell my bot what rules I use to manage my trade. So don't tell me I cannot do bots. Actually, bots will do better than humans. Face it, it's 2017 already.

    Let me share something for fundamental analysts. I would like to get your opinion on random behaviours. No need to go very far. This time, It's oriented to short term traders. I will post long term examples sometime. For now just let me tell that probably you will run out of luck when something like Q4 2008 eurusd happens again, and the thuth is you cannot predict when it will happen, so it will catch you by surprise.

    Back to short term:

    Take a fundamental event, for example, "Mario Draghi speaks". This is what happened the last 4 times (All examples EURUSD M15 Timeframe)

    Name:  MD1.jpg
Views: 7
Size:  26.1 KB

    Name:  MD2.jpg
Views: 6
Size:  26.3 KB

    Name:  MD3.jpg
Views: 7
Size:  25.1 KB

    This one is actually funny:
    Name:  MD4.jpg
Views: 6
Size:  27.3 KB

    Each time, the behaviour is random. Fundamentals don't give you a clue about what direction the market will go. It all depends on what people speculate, and the volume they put into the trades. So we go back to.. will you be lucky? Until when?

    For technicals, for the moment let me share this YouTube video:



    I could add some more ideas, but much of what I've found is well explained here.

    Have a nice day!
    Last edited by averied; 05-21-2017 at 08:08 AM.

  10. #10
    Manxx's Avatar
    Manxx is offline Superior Master Contributor and Member
    Join Date
    Aug 2015
    Location
    “A ship is safe in harbor, but that's not what ships are for"
    Posts
    861
    I wonder why this reminds me of those who proved that the bumble bee simply cannot fly - it is aerodynamically impossible. But the bees just quietly go on flying.....

    Thanks for the interesting perspective. You have a nice day, too!

Forum Sponsors

Similar Threads

  1. What do your family think about your forex trading?
    By ForexNewbie1 in forum Beginner Questions
    Replies: 45
    Last Post: 07-23-2016, 01:40 AM
  2. Hi I am couple of years study forex trading
    By lrajaan in forum Introduce Yourself
    Replies: 1
    Last Post: 11-02-2015, 07:43 AM
  3. Back into forex after years absense with renewed vigour
    By Lordofpips in forum Introduce Yourself
    Replies: 1
    Last Post: 07-25-2015, 01:44 PM
  4. What you should avoid/be aware of in trading Forex
    By AngelFX in forum Beginner Questions
    Replies: 3
    Last Post: 04-27-2014, 03:15 PM
  5. 30 days into my Forex training, and what I have learnt.
    By Nickylikessss in forum Expert Advisors and Automated Trading
    Replies: 3
    Last Post: 09-08-2009, 08:25 AM

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
"Always bear in mind that your own resolution to succeed is more important than any other one thing."
Abraham Lincoln