If I have traded opposite of myself, I would be rich by now!

Trading Discussion
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Did anybody else noticed how the trades we make would be profitable if only we would have done the opposite?

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According to the statistics that ESMA now requires European brokers to publish, about 80% of their clients would have to entirely agree with you! :joy:

Kinda scary really, and no-one has really managed to explain why that is. There are many separate reasons why certain individual trades may have gone wrong, but no clear reasoning why so many traders consistently lose instead of gaining.

My own opinion is that most losing trades from Newbies fall into three main categories;

  1. chasing markets: entering whenever they think a move has started just because the price has already started in a certain direction - and then reversed on the next candle

  2. outstaying their welcome : Trends tend to start slowly as more and more people with no positions gradually take positions according to their own particular method. But when they end, everyone is in that trend and wants out at the same time! So trends do not follow a nice blue sine wave pattern, they climb a slow gradient - and then fall off a cliff. The key is how to judge when to bail out before the precipice! :slight_smile:

  3. Stops too close to entry: This is where I get stoned for heresy, but I do not believe in risk/reward ratios (shhh). So many people complain about getting stopped out and then the market zooming back to their targets. I use stops but only as damage limitation “air bag” stops in the event of a sudden major move. I very rarely actually get stopped out, my normal exit is either a reverse signal or a “gut reaction” to lack of action or over-action.

Exit strategies are rarely talked about, mainly because they are so difficult to define - but they are more relevant than entry strategies most of the time…

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I don’t know about you but it seems my trades are more successful when I put in limit
orders and wait for the market to come to me then when I put in stop orders.
I don’t get as many fills, but the trades seem to work out better, in general, of course.

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That’s a great observation, @cigarmanstan.

Do you tend to trade ranges or breakouts?

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I agree with you 100%.
All the above applies to me. I personally lose money for three main reasons. First, impulse trading which would relate to your number 1 category. Second, impatience that leads to fear of losing money or losing the opportunity to make money and my trades end up either in red or I get out with minimum profit. Third, not following my strategy hair by hair. It is so weird that even though I know that I should not enter a trade, but I still end up entering and then I regret it. I have been WATCHING the market for about 4 years. I have actively been trading for about 8 months with real money out of the 4 years of watching the market and have had about 400 trades so far. Although I am getting better slowly I don’t know if I can last in this game much longer since I am still not able to control my emotions (feeling down) when I lose money.
A thought on the so called smart money. Is it possible that those guys have different price category for lets say British Pound. Once they get in given that all their indicators align, they wait until it profits. Since they have huge capitals they can withstand the market fluctuations (like 5000 pips). It could take maybe a year for it to profit. That is why after taking into account the interest on money and all the costs associated with the trade, overall their profit margin is 20 to 50% on an annual basis.
I hope I am being clear.

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very true. most of the times when i plan my trades, it works.

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With that strategy, more so with ranges, but it works too if you don’t want to chase breakouts.
Instead of going long on a breakout with a tight stop, you can put in a limit order where you would put in your stop and plan on it coming back to you. As stated above, chasing breakouts…

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You also have to understand daily price movement ranges. For instance, EURUSD average(68% of the time) can move
.009-.0105. That’s like from 1.1650 to 1.1550, today. 30-40 point stops often times are set off when you don’t give 'em
room enough to breath.

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I usually trade Pound pairs but once it goes against me and hits my stop, it is very difficult to make the lost money and make a profit on top of it. I personally have come to realization that it is better for me to trade pairs that move very little (20 to 30 pips) since I can hold on to it much longer and give it room to breathe.

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I show Cable average daily movement .01-.0125, even more then EURUSD.

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lmao i mean, there are only 2 options, buy or sell, so i guesss youre right :joy:

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We see two possible reasons in support of your observation that limit orders are beneficial.

  1. By setting a limit order and waiting for it to be filled you are exercising patience and being selective about price you are willing to accept. If nothing else, this is an improvement over traders who enter a trade immediately with no thought to whether the current price available in the market presents a good risk/reward opportunity.

  2. Limit orders give you the potential to benefit from positive slippage when your order is filled at a better price than you requested. In July 2018, which is the last full month, for which FOREX.com compiled execution statistics, 59.14% of limit orders executed at a price better than the requested price, and the average price improvement per limit order was 1.01 pips.

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If I can add a little here @anon46773462, When I started off in early 2000’s I was doing “ok” at first.

SO I decided to “Learn more” and trade full time - After a few months of trading - I had lost £3000 of my £5000 account and stopped to “Learn more” However I also had all my records so I analysed my performance as well and was amazed to find that in fact I had traded slightly positive - but the “Spreads” had cost me the £3000 !

So I would add ;

4 ) - SPreads - You have to trade really quite profitably just to cover the costs of the spreads - especially so on short - term trades.

    • Believing that “Others” are better judges of the market than you are and trying to be “Part of the crowd” by betting the same way they do (Remember 95% of THEM are going to lose money too ! ). Trust your own judgement and take responsibility for your own decisions - it can be hard - not having “someone to blame” when it turns to ratchett, but at the end of the day your bank manager will blame you anyway ! (This section includes in my opinion - “Mentors” and “Courses” ) - Ok for “Learning” from as a lesson - no use (IMO) to Teach you to trade - You can only trade “Your way” - nobody else’s
    • The expertise of “The market” in getting you thinking in exactly the wrong direction ! - Anyone who doesn’t believe this just go “scalping” 5 minute chart, on a demo account - without indicators - just take a bet ! Your sole objective is to allow 2 pips per bet for spread (If “Paper trading”) and to trade for a day and come out of it “in profit” - Those same feelings will invade your thoughts, whatever timeframe you trade ! SOme say it is deliberately set up that way - some do not. :slight_smile: Whichever - it is certainly an expert in Crowd psychology !

  3. Trying to “Range trade” a trend - or to “Trend trade” a range ! The market is not static - it ranges, trends and has “Dead periods” when nothing at all seems to happen. Knowing what condition it is in is sometimes the hardest part ! - Not Knowing will get you killed ! :scream:

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i wish you could elaborate more on #6.

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i also come up with different reasons as to why i am not profitable. the more i try to make sense of the market the more i realize that purely lack of capital is the main reason. that is why many people are profitable with demo accounts. after all if i enter at a reasonably good price compared to the average price of a currency, with enough capital i could withstand the fluctuation and take the profit once it gets there. this forex market keeps going up and down all the time.

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Hi @alirezaakbarizj,

Have you tried placing smaller trades in your live account?

For example, if you had success placing standard lot trades (risking about $10 per pip) in a demo account with a $50,000 virtual balance, then you could try placing mini lot trades (risking about $1 per pip) in a live account with a $5,000 real balance, or try placing micro lot trades (risking about 10 cents per pip) in a live account with a $500 real balance.

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i have thats why i am still in the game.

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If you reduced your position sizes for live trading, then why do you still consider lack of capital as the main reason for your not being profitable? Is it possible you have not reduced your position sizes enough?

What percentage of your balance do you risk per trade? You may find this article helpful in understanding the rationale behind risking only 1% of your account balance per trade: The Most Important Math in Trading | New Trader U | Page 4

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BC i am trading with a 100 account.

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i am planning on topping my ctrader account to 1000 then continue trading 0.01 lots. that way i can withstand 200 to 300 pips movement without suffering a stop out. today for example i got stopped out of GBP/USD on two trades then the damn pair skyrocketed. on my metatrader account i didn’t put any stop loss and it is going well. don’t ask me why i have two accounts, i cant even explain it myself.