Day Trading - Want to Lose Money? Then Go Ahead and Day Trade
Day trading systems, everywhere I look I see them on the internet. They offer huge profits with little or no risk but the fact is day trading simply loses money.
Ask any e-book seller for a track record to support their claims that their day trading system makes money and you will normally be met with a deafening silence.
They can't produce one, because day trading is doomed to failure.
In theory, day trading sounds exciting and profitable:
Hopping in and out the market, taking a few pips here and there and overtime your day trading will make you huge profits with low risk.
This however is not the reality for the following reasons.
1. Currency price trends
Currencies are subject to supply and demand and are a reflection of the underlying health of a countries economy.
If you look at any price chart you will see that over the longer term trends can last for weeks, months or even years.
Shorter term moves tend to be random.
2. The shorter the data the less reliable it is
Let's take an insurance company when they calculate your life insurance premium.
Ask yourself this question:
How much data do they use?
Do they calculate premiums based upon when say 10 people?
Of course they don't.
They use hundreds of thousands or more, as the more people they use the more reliable the data is for their calculation.
It's the same in currency trading:
You can't anticipate what is going to happen in a day because you simply don't have reliable data.
It's common sense really.
Let's look at another problem.
3. Volatility
Consider a snapshot day in currency trading
Trillions of dollars are traded - that's a lot of money!
Traders are all trading for different reasons and it is literally impossible to calculate what volatility or price movement will be in a specific day.
Day traders make the mistake of thinking they can.
Stops take them out the market when they least expect it, as volatility rears its ugly head.
Day trading creates risk
Day traders like to talk about restricting risk, but they actually create it for themselves, by trading with stops that are to close guaranteeing they will lose.
On the other hand, they restrict their profits.
The idea is to take profits quickly and move on.
Let's look at the day trading equation:
High chance of being stopped out + never run profits = loses
The way of course to make money in forex trading is:
Run your profits to cover your inevitable losses.
This is a fundamental rule of trading!
The acid test
Finally, day traders remind me of the old Burger King advert.
When they were looking at McDonalds burgers and insinuating they had less beef than theirs.
"WHERE'S THE BEEF?"
Was the memorable phrase and to be fair McDonalds burgers, at least they had some!
Ask a day trader:
"WHERE'S THE PROFIT?"
And you won't find any!
Thinking about it
That e-book I was going to buy offering me huge profits for just $99.00 - Might have a Big Mac and fries instead its better value and I get change to.
Related Tags: day trading, daytrading, currency day trading, day trading systems, forex day array trading systems
MORE FREE BETTER TRADING INFO
On all aspects of becoming a profitable trader including articles and free PDF downloads and an exclusive Gann Trading Course visit our website at http://www.net-planet.org/index.html
Recent articles in this category:
- Sbi Best Sip Plans 2010
SBI Mutual funds have introduced many mutual schemes. Each scheme has different limitations. SBI SIP - Icici Sip Plans 2010 - Best Sip Plans
ICICI Prudential offers many schemes. These fund schemes have SIP. What is SIP? SIP's expansion is S - Determining Where To Invest Money
There are several kinds of investments, also you will find numerous factors to find out where to inv - Retirement Plans A Necessity Of Life
A person works whole life to give a decent upbringing to his children and families. But while improv - Stock Market Timing Signals
Follow the PlanThis would seem a statement of common sense, but the fact of stock market timing sign - A Selection Of Financial And Investment Strategy Guidelines For Turning A Profit
Yet, we don't often have the money to leave work right at this moment. We need a constant salary to - Find Out The Profitable Way To Invest In Small Cap Stocks
Everyone wants to find a penny stocks list or other investment strategies that can turn your literal - Portfolio #4 - Watergate
IntroductionThe problem is not that the world is running out of water. No, the problem is that drink - Dulton Group: Information Content Of Dividends
Dulton Group helps you to analyze the information content of dividends, an important factor affectin - Coping With Fear In A Markets
The real fact is that all traders, investors as well as stock market investors, who feel afraid, occ
Most viewed articles in this category:
- Investor Stress: A New Approach
George Muzea is both an investor and a stock market advisor. In any given month, he will be paid $10 - Real Estate Investment Financing
1. Location: Your real estate investment's location is arguably the most important component of your - Canadian Oil Sands - Who Are the Major Players
The Canadian oil sands represent one of the most lucrative investment opportunities to oil and gas i - Why Bulk Preconstruction?
Bulk preconstruction is the latest trend in secure, high profit real estate investing. By buying wit - Investing - It Is Not As Scary As You Think
Many people want to have more money - OK everyone does. However, most people don't know how to go a - How Do I Know Which Programs Are Scams?
Although it is virtually impossible to tell if a HYIP is a scam until the moment when they stop payi - Currency Trading Success - 6 Tips to Increase your Profits
If you want to increase your profit potential and achieve currency trading success then the simple t - The Business Cycle
Investors who want to beat the market should be followers of the business cycle. The business cycle - Pros and Cons of Real Estate
Like any other profession, there are good and bad things about what are available. Each of the thin - The Fixer Upper
Real estate investing has become almost a national pastime. Millions are made every year on the buyi