FOREX day trading is more popular than ever and online you can get a huge amount of e-books and FOREX day trading systems, which promise you regular income and huge capital gains.
Here we will look at how to separate out the myth and see the reality in relation to day trading and how to win in the markets.
Myth Day Traders Have Profitable Real Time Track Records
Reality
FOREX day traders don't make money and the proof is that of all the e-books and systems for sale, you never see a real track record of real profits made in the market over the longer term.
What you do get is a hypothetical track record, but these are not worth the paper their written on.
Why?
Quite simply because their devised in hindsight - knowing the closing prices.
Well, if we all knew tomorrow's prices today we would all be millionaires!
Hypothetical track records are simply made up and have no bearing on how successful you will be trading the system.
Myth Day traders trade their own systems
Reality
Most FOREX day trading systems are sold by failed brokers, or marketing people who have the sense not to trade the system themselves.
They don't need to, as they make money anyway.
They can simply rely on writing some marketing copy to appeal to the greed of investors, then sell them the system.
They get their fee and the FOREX trader gets the loses fair deal for them!
Myth You can predict short term volatility
Reality
This is of course why day trading does not work.
Trillions of dollars are traded each day by millions of participants and to say you can predict where prices will go in a matter of hours is laughable.
The only people who take notice of support and resistance are losing day traders.
Volatility can and does, take prices anywhere in a day and levels of resistance and support are constantly broken handing day traders loses.
Myth Day trading restricts losses and runs profits
Reality
As day traders work with meaningless data they can't win of course but many think that day trading restricts risk, but it actually creates it.
Losses are small, as they are near daily support or resistance ( which get broken frequently as the data is meaningless) which simply ensures they get stopped out with a loss albeit a small one.
Running profits?
Forget this with day trading!
They are looking to scalp a few ticks or close positions out quickly.
The result is they can never run profits to cover the huge amount of small losses they get.
The biggest myth of currency trading is that day traders make money they don't.
They lose and system sellers laugh all the way to the bank.
The proof of the above is:
If you ever ask a day trader for a long term track record of real profits Try it and see if you get one.
If you want FOREX education avoid day trading and learn FOREX Trading methods that actually give you a chance of winning.
Day trading is simply one of the best ways to lose your money in online FOREX trading, so don't fall for the myth understand the reality.
Frequently Asked Questions
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QUESTION:
How can I get free audiobooks of stock investing and day trading for dummies on my iPhone?
I own both books but I want to get the audiobooks somewhere for free so I can get the information faster and be able to listen when I am unable to read due to lack of time. Thank you most helpful answer will get 10 points -
QUESTION:
How much money should a beginner start out with before investing online?
I want to invest in stock online. How much money should I start out with? How many different stocks should I buy? Whats the best online trader? Is day trading difficult to do? Thanks-
ANSWER:
Your best bet is to get some education and experience before you start putting your hard-earned money on the line. Read a book (Investing for Dummies is a good starting point) or take a course to learn how the markets work, how brokers work, what types of investments you can buy etc. Find a website that will let you create a free "practice account". This is basically "pretend" investing where you enter buy and sell transactions of real stocks but you don't actually own them. You can see how your "investments" react over time and whether you made or lost money and then learn from your successes and failures.As for how many different stocks you should buy, there's no rule and it's completely up to you but a good piece of advice is to spread your risk around so that your money is not tied up in the fortunes of just one company. The best way to do this is with mutual funds and ETFs. Mutual funds look like stock in that you buy shares at a particular price and then it either goes up or down and you make or lose money based on that. The difference between mutual funds and regular stock is that a mutual fund owns stock in many different companies, so when you buy mutual fund shares you're actually buying shares in lots of different companies rather than just one. ETFs, or Exchange Traded Funds, are the same idea except that they are usually tied to an index or a commodity. For example, you could buy an ETF that is tied to the movement of S&P 500 index or one that is tied to the price of oil or natural gas futures contracts.
Whatever you decide to do, don't ever invest more money than you can comfortably afford to lose. And don't be in a rush to sink your money into something you don't really understand. Learn as much as you can first, get some practice experience and seek out the advice of professionals or people you trust who have some investment experience before stepping onto the investing roller coaster. I rushed in when I had some extra cash sitting around and I promptly turned ,000 into about 00 by not knowing what I was doing and making rash, emotional decisions. I've learned a lot along the way and my investments are slowly recovering, but I sure wish I hadn't gotten my education the hard way! lol
Good luck!
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QUESTION:
I am 19 and would like to learn about the stock market. Where is the best place to learn about it?
I am 19 and want to learn about the stock market. I have done plenty of research but I need either an actual person teaching me or more hands on work. I am more interested in shorter term trading. Not necesarilly day trading but definitely not long term. Anyone have any ideas on where to find instructors or decent learning material. Thanks.-
ANSWER:
I am a finance senior.First there are two books you should read. Way better than textbooks. The first is called "the math behind wall street".
http://www.amazon.com/Math-Behind-Wall-Street-Market/dp/1568581602/ref=pd_bbs_sr_1/002-9307096-4545628?ie=UTF8&s=books&qid=1177570772&sr=8-1
Then read this one;
http://www.amazon.com/Investing-Dummies-Business-Personal-Finance/dp/0764599038/ref=pd_bbs_1/002-9307096-4545628?ie=UTF8&s=books&qid=1177570661&sr=8-1
If you want to jump into it right away, the University of Arizona has a lot of good materials online. The books are better, but here is the link;
http://www.studyfinance.com/
Read the books. Read the Wall Street Journal every day, highlight the terms you don't understand & look them up online. Google the term "_____ definition".
Finally play the fantasy stock market. It is a cheap way to learn.
Here is that link.
http://www.investopedia.com/
And the guide.
http://simulator.investopedia.com/stock/game/
Buy a Hewlett Packard financial calculator ( bucks), & READ THE MANUAL.
If you do this and like it, I'd recommend finance as a major. Although it is pretty intense.
Very cool that you want to learn.
Good luck
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QUESTION:
I ws told tht day trading is nt fr beginners.what are the steps to be taken to reach day trading level?
suggest any courses or readings tht will help me reach the level of day trading and currency trading(priority tradin in India) and be succesful.I know nothin about stock market,economics or accounts,not even basics.But I am ready to give all the time to learn it. Kindly suggest some good reading,tutorials for starters which ll give me knowledge abt the very basics of market and help understand trading and investing better .-
ANSWER:
To be a trader you must first learn how to invest. You must know the products and the markets in which they trade and more importantly you must know the rules that govern those products and markets. So you must know what you re doing, why you re doing it, and how to do it. You should start by reading Investing for Dummies by Eric Tyson.Then here s a list of books you should consider, at least read half of them
Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea
How to Trade in Stocks, Jesse Livermore
Millionaire Traders, Lein & Schlosberg
One Up on Wall Street by Peter Lynch
Reminiscences of a Stock Operator, Edwin Lefevre
The Disciplined Trader, Mark Douglas
Trader Vic-Methods of a Wall Street Master, Victor Sperandeo
Trader Vic II-Principles of Professional Speculation, Victor Sperandeo
Trading for a Living, by Alexander Elder
Trading in the Zone, Mark DouglasAnd when you think you want to trade, try some paper trading to test your skills without spending you money http://simulatorinvestopedia.com/ http://www.moneyworks4me.com/
and/or http://www.tradingsimulation.com/Before you enter your first order you need to address four major policies and have very strong discipline to follow them
1 - You need a written sound trading/investment plan with rules that will not only help you but more importantly protect you, mostly from yourself. Always use stops either to protect you on the down side or to lock in profits on the up side. Never trade on emotions, when emotions get involved walk away. Don t try to out-smart the market, you ll loose but if you always take what the market is willing to give you, you ll be successful. Other words, you don t trade against the trend since the market is always right. And NEVER trade on emotions, once you let emotions in your trades you will loose
2 - A written money management program is essential. Remember never invest 100% of your capital into any one security and never have 100% of your capital invested. Never go into a trade without knowing when and where you are going to get out of it. Never let a loss on a trade get greater than 8%-10%, always take you loss and walk away - don't loose more than you need to and don't be afraid to take the loss. Remember you never can get hurt taking a profit. Never average down, but you can average up.
3 - You must have sufficient trading/investment capital. Use your own money, there s no need to go into debt so that you can trade and/or invest. Margin can be used but only with restraints, never let the account wall below 45% equity. Unless you fully understand margins you should not use it.
4 A full and complete understanding of the rules & regulations of the industry. If your going to play in the game be sure you know the rules of the game and always follow them.Unless you are willing to study and follow the above you will never make it as a trader. To be successful as a trader it takes work and constant study of the markets and the products traded in those markets, there is no easy way.
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QUESTION:
what's a safe and free trading tool I can use to teach myself day trading?
Are there good free trading tools that I can use for practice (not using real money) that are safe for my computer or that I wouldn't have to download? I'd appreciate any advice or additional recommendations.
Thanks and Happy Holidays!-
ANSWER:
To be a trader you must first learn how to invest. You must know the products and the markets in which they trade and more importantly you must know the rules that govern those products and markets. So you must know what you re doing, why you re doing it, and how to do it. You should start by reading Investing for Dummies by Eric Tyson.Here s a list of books you should consider, at least read half of them
Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea
How to Trade in Stocks, Jesse Livermore
Millionaire Traders, Lein & Schlosberg
One Up on Wall Street by Peter Lynch
Reminiscences of a Stock Operator, Edwin Lefevre
The Disciplined Trader, Mark Douglas
Trader Vic-Methods of a Wall Street Master, Victor Sperandeo
Trader Vic II-Principles of Professional Speculation, Victor Sperandeo
Trading for a Living, by Alexander Elder
Trading in the Zone, Mark DouglasAnd when you think you want to trade, try some paper trading to test your skills without spending you money http://simulatorinvestopedia.com/ http://www.moneyworks4me.com/
and/or http://www.tradingsimulation.com/Before you enter your first order you need to address four major policies and have very strong discipline to follow them
1 - You need a written sound trading/investment plan with rules that will not only help you but more importantly protect you, mostly from yourself. Always use stops either to protect you on the down side or to lock in profits on the up side. Never trade on emotions, when emotions get involved walk away. Don t try to out-smart the market, you ll loose but if you always take what the market is willing to give you, you ll be successful. Other words, you don t trade against the trend since the market is always right. And NEVER trade on emotions, once you let emotions in your trades you will loose
2 - A written money management program is essential. Remember never invest 100% of your capital into any one security and never have 100% of your capital invested. Never go into a trade without knowing when and where you are going to get out of it. Never let a loss on a trade get greater than 8%-10%, always take you loss and walk away - don't loose more than you need to and don't be afraid to take the loss. Remember you never can get hurt taking a profit. Never average down, but you can average up.
3 - You must have sufficient trading/investment capital. Use your own money, there s no need to go into debt so that you can trade and/or invest. Margin can be used but only with restraints, never let the account wall below 45% equity. Unless you fully understand margins you should not use it.
4 A full and complete understanding of the rules & regulations of the industry. If your going to play in the game be sure you know the rules of the game and always follow them.
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Source: http://binaryoptionsblog.net/?p=24638
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