I’ve tried day trading strictly sticking to rules, position sizing, target profit, fixed 1% stop loss for each trade and still lost in majority of my trades.
I found in google that majority of retail traders(97%) lose and the remaining 3% mostly earn equivalent of a bank teller. And that only the hedge fund managers, big banks and corporations make money in FX. Small retail traders like us lose and only fattening the brokers.
Please feel free to voice me your opinion on whether you agree. Thanks.
I’m going out on a limb here. The top pros are just as capable of ‘enjoying’ losing trades providing the fewer profitable trades outweigh the losses. In their case, it’s a lot more.
The % stats are meaningless, although it’s more likely that a significant number of retail beginners lose their capital because they risk more on each trade - in other words, they haven’t learnt how to control their emotions in order to make money from Forex.
As for a S/L set at 1%, IMO that’s not giving the trade enough breathing space. There are three ways to improve that. 1) reduce lot size. 2) use the ATR number at 1.5 - 1 ratio, e.g. ATR is 100, set your S/L at 150 providing it doesn’t exceed maximum 2% of your capital. 3) Use PSAR balls to set a S/L on the entry price of the last ball - again ensure it doesn’t exceed 2% of capital…
And finally, trade the 1hr chart providing the trend is in synch with the daily chart.
Mine was a whole lot worse today, John. having set up a great trade of USD/CHF sale, I mistakenly set a close trailing stop to keep profits, and got stopped out quickly .
Ugh.
So I opened another trade to continue the tend - and as at now 15.04, I’m making a small gain.
So yes, for me it’s so difficult to let profits run unattended…
UK and EU brokers are required by the regulators to publish up to date percentages of their clients who are losing money. On average they say on their website and documents that 70-80% of their clients are losing money - take a look at a few. Trading is not easy but it is easier to join a successful group of 20-30% than one of 3%.
Friday still is my best day, I’m in profit today, but a small weekly loss. Tuesday and Wednesday trades were affected by fundaments, IMO - on Wednesday that saw GBP rising after the BOE announced 150 billion more QE. Of course, I was happily watching it fall on NZD’s sword, only an hour later to see my profits wiped out.
Now I’ve included reading financial news before opening any trade.
The key words here are “Day Trading” now compare this to the 100% of people who make money buying and holding the S&P 500. When you buy and hold the market you are betting on the house and the house always wins , when you day trade you are betting against the house and are now in a negative expectation game. I am sure there is a small group ( like 3%) that do well day trading but the same can be said for craps and blackjack players. To summarize trade in the direction of the long term trend, buy the dips and you will make money
Yes, that’s what I would do. On my $2000 capital, I risk 1% = $20. However, I use a lot size of 0.16 = $16,000 trade and then tweak the S/L bar on the 1hr chart to around 200 points (20 pips) Depending on the currency, I sometimes have to reduce the points to meet the $20 loss stop.
On this range, if a trade is going to lose, the S/L will cut the loss. Only downside is trend retracements.
But if you get stopped out more often reduce your lot size to 0.05 - 0.08 and see if that works better.
Maybe that is what @steve369 means. However I believe that your stop loss goes in a logical place in relation to support and resistance and other relevant places.
What most traders don’t understand is that if in placing the appropriate stop loss in the correct position you are risking more than your 1% of your $1000 account than you cannot take that trade. Unless of course you are happy to risk more than the 1%.
This post talks about day trading and the percentages of winners and loser. What I find frustrating is that there are traders who think that if you are a day trader you just trade intraday. Or if you are a swing trader or a position traders or an investor you trade more long term timeframes.
Truth is that if you are a successful trader you have more than one string in you bow. A successful trader is experienced enough to be able to trade a number of ways over a number of timeframes.
It does seem many think you can do one style ie day trade and not the other ‘swing trade’.
Of course it’s possible to do both - but I think many like to categories themselves as ‘day trader’ or ‘swing trader’ - if only as some sort of ego boost.
It gives them sort of trading identity and does probably make it easier for newer traders.
For myself, I was (in my earlier years) a jack of all trades - I’d call myself a ‘seat of my pants trader’, if there was a trade on any time frame Id take it.
But mixing up so many styles and methods and timeframes never did me good.
For some it’s okay, the best trader in the world, Paul Tudor Jones could do that easily.
For me results improved when I focused where I was best and left the rest.
Im woefully bad at multitasking and I’m just as bad at multiple timeframes
And that’s the name of the game. But you don’t day trade. As a day trader you have to realise what you are trying to do.
I try to capture what I can from the market. I look for high probabilty trades that have good volume and good momentum. However when you are trading a smaller timeframe you have to expect small profit levels. I may take one trade a day two trades a day or more. It just depends on how traders set up. A successful trade for me may be 10 pips 20 pips or 50-100 pips or more. I take what I can get from the market. If it gives me only 10 pips. That’s it move on look for another trade. If it gives me 100 pips well happy days that is the cream on the top.
I agree. I gave up trying to teach my trading style. I honestly have no idea why it works for me. It’s like trying to teach someone how to swallow a gulp of water.
Alberto Salazar was a world-class marathoner, but he had a horrible running form. That’s me as a trader (working up to world-class, no doubt).
I suck at most aspects of trading except scalping. It’s like I can “feel” if there will be a burst of momentum coming. It’s very fleeting, so I take a small profit, go to bed and do it again the next day.
While I’m definitely in the ‘don’t approve of scalping camp’ the stuff I’ve read about it it does seem scalpers have an intuitive feel about it.
I liken scalpers to the players of fast reaction gamers. Or to the best dancers who know where the music is going to before it’s even gone there.
But is your feel for it some mystical sixth sense or simply having spent lots of time in front of the screen and having developed hyper focused pattern recognition?
I do think much of what we intuitively feel is really our brains having processed the same scenario multiple times giving us muscle memory.
