How do so many people lose money?

Beginner Questions
43

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.:slight_smile:

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

44

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.

45

That is niceā€¦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 ā€œreal lifeā€ experience on the cheap.

46

IBFX looks sweet, mytwopips, but is only Windows compatible, and Iā€™m on a Mac :frowning:

Thank you anyway for the info.

47

They use MT4. Thereā€™s no MT4 for Mac?:mad:

48

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 Windowsā€¦? :confused:

49

I partitioned my (Mac) laptopā€™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.

50

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 Iā€™ve seen so far provide, except the automated trading that is something Iā€™m not interested while I donā€™t become experienced.

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

51

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% - Iā€™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. Iā€™d add to that theyā€™ll doubtlessly be bad money management thrown into the mix as well. And finally, youā€™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!

52

Good figures, Triphop. :slight_smile: :slight_smile:

ā€¦ Iā€™d add to that theyā€™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 :

http://forums.babypips.com/newbie-island/10812-joy-candlestick-trading-learning-experience.html

Page 33 on.

53

While I am here, I would like to apologize on behalf of Petronix, who is from Australia as I am.

His posts on this thread indicate an arrogance, self-rightousness and pompousness that is completely [B]un-Australian[/B].

The only people that display that attitude in this country are politicians, judges and lawyers and police.

The rest of us are totally normal. :smiley:

We are just a happy, easy-going, friendly people.

Petronix claims 3000 pips/week tradingā€¦gold! Yeah??? :rolleyes:

Lets do some mathsā€¦At 1 standard lot = $10/pipā€¦

thats 52x3000x10 = $1.5 million dollars per year!!

Mmmmmmmmmmmmm.

I wonder if the tax department knows about him? :smiley:

Bet they donā€™t. :stuck_out_tongue:

But then maybe he is trading a micro, or probably a nano account!!

Thats more like $150 per year. Ha Ha.

He says that we are wasting too much of our time posting on this forum.

Well, I am a retired school teacher and I love teachingā€¦that is why I have devoted so much time on my candlestick thread which is now more than 60 pages long.

I prefer to do that than make 3000 pips per week - yes, really, because I find it more rewarding.

I make sufficient on the stock market.

Having been on this forum for a while now, I have seen his ilk come and go.
Unfortunately they contribute nothing useful to this forum, end up telling blatant lies, and arrogantly tell the rest of us that we are ignorant.

I would like to see Petronix say that to Rhodytrader, who has rubbed shoulders with people like John Bollinger, Gerald Appel and many other world famous market greats.

But maybe they are ignorant too!!

Shame Petronix, shame!!!

54

hmmm I was looking at easy-forex after one website gave them a good review. website looks clean but its web trading only, which isnt too bad as i can check on things from work then but its a pain in the ass having to go get charts etc from elsewhere.

easy-forex spread on gbp/usd is only 3 pips though and i believe it may be possible to get it lower if you ask them. ibfx is 4 pips. it also seems funding your account on ibfx with a debit card costs $20 ā€œconvenience feeā€!?!?!?! and then you cant make a withdrawal for 30 days, or you can use a bank transfer which must be in USD (meaning anyone in uk gets charged a fee from their own bank, usually 2.75% both in and out again) and THEN wait 5 days for it to get there.

seems like easy-forex and mt4 may be better than ibfx? no fee debit card deposit and withdrawals, 3 pip spread.

this will be my first attempt so i want to pick a good one rather than chop and change trying to find one.

perhaps bad brokers are one reason why some people lose money :stuck_out_tongue:

55

no fee debit card deposit and withdrawals, 3 pip spread on GBP/USDā€¦but have you considered that easy-forex may be a scam?

http://forums.babypips.com/54209-post290.html

Maybe theyā€™re not; but the mere suggestion of it is sufficient reason to steer clear. There are too many other brokers out there without the stigma (and possibly legitimate claims of criminal activity) attached.

Anyway, thatā€™s tangential to the larger discussion here.

56

EASY FOREX has a VERY BAD reputation in Forex forums all over the web. It is well believed that people at Easy Forex post positive reviews in forums to boost sales. Some forums have traced the IP addresses of the posters back to the same location. THAT IS OBVIOUSLY BAD NEWS.

I would definitely choose IBFX over Easy Forex. Hands down. But again, I trade with an ECNā€¦MB Trading. I have never been a client with IBFX so I cannot give personal experience, but their rep is solid.

57

Some people have some truly bizarre manner of judging
brokers/firms. People actually quibble over $20 fees
for credit card deposits and fluctuating spreads?
You can all send a personal check to your brokers/firms
you know. And if you knew the level of credit card
fraud these days, you would agree with the terms that
it is more than reasonable. But again, you can send in
a check but something tells me that if you are inclined
towards the likes of easyfx and are quibbling over a lousy
$20 fee, you probably donā€™t belong anywhere near FX trading
or any trading for that matter. And once again blaming the
brokers. Letā€™s get this straightā€¦ only losers and completely
unwinning traders blame the brokers. People lose money
because they make poor choices thinking easyfx are legitimate
while totally ignoring what a lousy traders they truly are.

58

True. You cannot 100% blame bad trades on the broker. I have been trading since 2001. I can tell you that choosing a broker CAREFULLY is very important. I can also tell you that very deceptive practices occur and very sneaky things are done by the ā€œfancy, get rich quickā€ brokers.

A serious broker will provide quality services, will be regulated, will be able to fill your orders quickly, etc.

Now, if you donā€™t know how to trade properly or have no plan, then you are screwed no matter how great the broker is.

59

So if you can trade and win 50% of the time. All you have to do is set your entries with Tp targets at say 50 and set your stop loss orders at say 30.
This way if you win 5 and lose 5 you will be up 250 pips and down only 150 for a net profit of 100 pips.

And for all the money that someone loses someone else makes.
So 80% of the people are supporting the 20% of people.
I used to be in the 80% but I have switched over to the 20% side :slight_smile:

60

Ahhh the rule of 80/20. One of my all time favorites because it is so true. lol

All you have to do is set your entries with Tp targets at say 50 and set your stop loss orders at say 30.
This way if you win 5 and lose 5 you will be up 250 pips and down only 150 for a net profit of 100 pips.

Absolutely true and a PRIME example of just how important MONEY MANAGEMENT is in trading and other areas of life.

I always have a low RISK, high PROFIT target in my trading. I always trade at least 1:1 if not 1:1.5 or better.

Forex, IMO, will make you work your rear off if you are not smart about your trading. I believe most systems and styles will work if you are careful with the money over the long run.

61

Well Ive been searching for broker reviews for 2 weeks and to be honest i havent yet found one that doesnt have dozens of bad reviews saying scam this and scam that. Granted many of those are probably from idiots losing their own money from their own lack of knowledge, but it doesnt make it any easier to find reliable reviews of any of them that you can actually believe.

62

You need reliable reviews of FX brokers/firms?

Itā€™s simple!

Pick one from the top 5 biggest regulated,
well capitalized, and reputable firms.
Why is this such a difficult task?

You think that some magical broker/firm
will not ā€œcheatā€ you and not ā€œrobā€ you
like you read in all of these stupid
scam reviews on stupid sites like
ForexBastardsā€™?

And as for EasyFX, they actually do have a history
of having scammed, robbed, and stolen from
people. They arenā€™t regulated, never will be,
and their capitalization is a joke not worth mentioning.

Itā€™s your money, hopefully hard earned right and not
stolen from others? Right?

Then pick 5 top regulated, over capitalized, reputable
firms in Canada, USA, or UK and pick one!

If you are twiddling your thumbs over a broker/firm
while thinking EasyFX is some wonderful firm, you
truly have no business even contemplating FX trading
or any type of trading or even investments. HYIP or
MLM may be your thing.