I just made 1000 pips yesterday daytrading the forex market now let me show you how! Does that statement sound familiar to you. It seems these days if you go online everyone and thier grand mother has an amazing new system for daytrading forex. Before you try any system it is important to know the 4 biggest lies about successful daytrading so you can define what might work best for you and your particular situation.
1. Daytrading forex is just so risky: The simple fact is the longer you expose yourself to any market the longer the timeframe will be for potential profit or loss.There are 3 things any market can do:
Rise, Fall or Stay in a range trading
When you daytrade then you are agreeing to expose yourself in most cases for only hours to a market. There fore if positioned properly you can manage risk just as well as long term speculators perhaps even better because while the forex market is volatile and will take on all the 3 characteristics mentioned above during any timeframe by daytrading often there may be less of a drawback against you. Put simply by limiting your time in the market you don't set around long enough for bad news to get worse. The 80 - 100+ pip stops I am hearing some guys talk about in their system just means they stay longer and have to be willing to take $1000+ loss in order to hope for larger gains long term. I am not saying this is good or bad it is just a matter of taste and finance if you can't take that kind of heat then you might want to cook in a successful daytraders kitchen. I trade a system that allows for only 20 - 30 pip stops and exposes me for no more than 6 hours per completed trade.
2. Forex Daytrading movements are RANDOM: Another lie is that daytrading is so random no one can do it successfully. I don't believe in random events at all and the forex market responds to news, technical analysis and investor sentiment to different degrees in different timeframes. This can on the surface seem random but let me ask you what was the last random place you ended up at on one given day? Probably unless you have been kidnapped lately no answer comes to mind because there is a method and a purpose to everywhere you travel and the same can be said for the forex market in any timeframe.
Some examples are on sick days you stay home from work, on holidays you might sometimes travel a long distance to visit friends and family and on weekends you might take outings or just stay in but none of this is random. What you need is to understand how to spot the different days and how to capitalize on them to find success in daytrading the forex market.
3. forex Daytraders don't make money: I see some traders declaring no one can really make money daytrading forex. There are by most accounts 2 trillion dollars plus changing hands on a daily basis in the forex market. The fact is that in a market 2 parties make an exchange and one of them will leave with profits. Therefore considering the daily volume of trades on the forex market someone is making money and not just the position traders either. Again it is really just a matter of taste and what your definition of Risk v Reward is for you and your financial situation.
The BIGGEST LIE in forex Daytrading
4. The holly grail forex system that works Every day: One of the biggest out right Lies in daytrading is that you can trade a particular currency every day and generate a profit consistently. NO or at least not to my experience you can't and here is why. Suppose you are part of a corporate environment and go in to visit your boss one day. You quickly notice he has spilled coffee on his shirt and the guy who came in before you has ticked him off and you find out someone took his parking spot in passing conversation. However you just read a great new book entitled " how to go in and ask for a raise and get it everytime".
I bet if you try the suggestions in the book that day and even if you execute it to the letter it will most likely not yield the desired results. This is an example of the big day trading lie about a system that you can use every day on the market to pull profits out again and again. The point is that every day is different and with that said you need a system comprised of various sub systems that will be used for different days and that will call you out 70 - 80% of the time because some days the best deffense is simply not being exposed at all.
Now that you know the biggest lies about forex daytrading. The next step is finding out the truth and who is really making money daytrading, Why they make money daytrading and how can you join them in doing so? You need to focus on the picture through the eyes of a successful daytrader and this article is just a small step in getting you on your way.
About the author:
For more information visit at http://www.digital-intuition.com and Download your free copy of forex flows the best forex trading software available using computerized A.I. Developed by Alfred / David Carroll 2 successful, full-time forex speculators now for 4 years plus.
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