Forex trading for a beginner
Discussion
Rob,
Putting £20k in your demo account is pointless unless you plan to do that for real. Put £1k in your demo account and see how quickly you hit your margin stops. That is realistic. Anyone can put £500k in to a demo account and then make it £1 million, but that actually teaches you nothing about how to trade and how you will trade if it was real money.
Putting £20k in your demo account is pointless unless you plan to do that for real. Put £1k in your demo account and see how quickly you hit your margin stops. That is realistic. Anyone can put £500k in to a demo account and then make it £1 million, but that actually teaches you nothing about how to trade and how you will trade if it was real money.
Shaoxter said:
I think he means 4.5% including the leverage.
I think he took 1,944/20,000 and divided by two for two days trading to get the daily rate.What is going wrong is:
- You are gambling on something completely random (as you admit) but think somehow that you can develop a "system" because obviously no one has tried that before.
- You have ignored the substantial impact that fees will have when you trade with just £1k.
- You have ignored how you will trade with tighter limits and get stopped out far quicker on £1k.
- You have ignored the simple fact that your psychology is completely different when using fake money to using your actual hard earned.
Dummy accounts are good so you can understand the mechanics of how to lose your money.
They aren't a very good guide to exactly how quickly you will end up losing it.
Hint - faster than you expect is the right answer.
You are doing the equivalent of watching the roulette wheel and convincing yourself that you can develop a system.
Let me help - the system is: own the roulette wheel.
robinessex said:
That makes it 380 days to go to buying the Lambo Aventador !!!!!!!!!!!!!
Just to give you a sense of how utterly bonkers what you are suggesting is......if you actually compounded your 4.5% daily gain and started with just £1,000 in 380 days...
...you would have £18.4 billion.
WRT demo accounts, they're only really useful for getting a feel for how a platform works. The next step is depositing a minimal amount and risking minimal amounts to see if you can identify a way of making money. Then you need to ask yourself if what you're doing is scalable. If it isn't then back to the drawing board.
walm said:
Just to give you a sense of how utterly bonkers what you are suggesting is...
...if you actually compounded your 4.5% daily gain and started with just £1,000 in 380 days...
...you would have £18.4 billion.
So there's this Prince, a chessboard, a Vizier who is claiming a prize, and some rice......if you actually compounded your 4.5% daily gain and started with just £1,000 in 380 days...
...you would have £18.4 billion.
Hoofy said:
walm said:
Let me help - the system is: own the roulette wheel.
Question is - if owning the roulette wheel is the key, why are there so many players sitting at the wheel rather than owning wheels? Surely some of them must be making money on the retail side?With FX trading, day trading, spread betting etc... the machinations of the roulette wheel is slightly obscured.
The blatant two or three zeros in green aren't there to give you such in-your-face evidence of a gamble you will never win long term.
People "know" that you can make a lot day trading.
"Traders all drive Ferraris" etc...
So while it is common knowledge that the house always wins it is apparently also common knowledge that day trading is a route to instant (well 380 day) riches.
However, my mission in life is to bust that myth. It is total b
ks.
Come on, pay attention at the back! The 'amount' in my demo account is £20,000. When I do a trade, I gear up by a factor of 25, so I trade with £500,000. I've used the same amount on all my trades. So the return so far is £1,844. This is 0.3688% of £500,000. But when the profit is dumped back into my account when I close a position, the £1,844 is 9.22% on £20,000 over 2 days.
walm said:
robinessex said:
That makes it 380 days to go to buying the Lambo Aventador !!!!!!!!!!!!!
Just to give you a sense of how utterly bonkers what you are suggesting is......if you actually compounded your 4.5% daily gain and started with just £1,000 in 380 days...
...you would have £18.4 billion.
robinessex said:
walm said:
robinessex said:
That makes it 380 days to go to buying the Lambo Aventador !!!!!!!!!!!!!
Just to give you a sense of how utterly bonkers what you are suggesting is......if you actually compounded your 4.5% daily gain and started with just £1,000 in 380 days...
...you would have £18.4 billion.
Can't fault your ambition I suppose...
Surely there is a diference bewteen the roulett wheel, and the forex market. A roulette wheel is a random number generator, whilst the forex market is following some 'pattern' dictated by the 'investors' in it. Which is why I suppose that huge amount of time, money and effort is put into it writing programmes that try to identify this pattern, and invest accoringly. So maybe intuative investment/gambling MAY result in an edge which gives you a profit.
Maybe I ought to take the wifes suggestion, and look at porn instead.....................!!
Maybe I ought to take the wifes suggestion, and look at porn instead.....................!!
walm said:
robinessex said:
walm said:
robinessex said:
That makes it 380 days to go to buying the Lambo Aventador !!!!!!!!!!!!!
Just to give you a sense of how utterly bonkers what you are suggesting is......if you actually compounded your 4.5% daily gain and started with just £1,000 in 380 days...
...you would have £18.4 billion.
Can't fault your ambition I suppose...
robinessex said:
Surely there is a diference bewteen the roulett wheel, and the forex market. A roulette wheel is a random number generator, whilst the forex market is following some 'pattern' dictated by the 'investors' in it. Which is why I suppose that huge amount of time, money and effort is put into it writing programmes that try to identify this pattern, and invest accoringly. So maybe intuative investment/gambling MAY result in an edge which gives you a profit.
Maybe I ought to take the wifes suggestion, and look at porn instead.....................!!
I don't know a huge amount about the quant traders but here is my impression of how they work.Maybe I ought to take the wifes suggestion, and look at porn instead.....................!!
They look for patterns.
Say FX moves following certain lead indicators such as the second derivative of GDP or unemployment or M2 money supply or god knows what.
They then run huge back test models to tell them historically what changes in certain variables did to the FX rate.
They assume that relationship holds and use the ongoing updated numbers from new lead indicators to trade because history has shown them such a trade made money in the past.
This takes a team of Oxford Mathematics D.Phils and a server room that makes Google jealous.
Now - if that is what you are doing then I take it all back and you might have an edge.
It just didn't sound like that.
walm said:
Hoofy said:
walm said:
Let me help - the system is: own the roulette wheel.
Question is - if owning the roulette wheel is the key, why are there so many players sitting at the wheel rather than owning wheels? Surely some of them must be making money on the retail side?With FX trading, day trading, spread betting etc... the machinations of the roulette wheel is slightly obscured.
The blatant two or three zeros in green aren't there to give you such in-your-face evidence of a gamble you will never win long term.
People "know" that you can make a lot day trading.
"Traders all drive Ferraris" etc...
So while it is common knowledge that the house always wins it is apparently also common knowledge that day trading is a route to instant (well 380 day) riches.
However, my mission in life is to bust that myth. It is total b
ks.So my question is: why are so many people still being the punter in financial trading and providing the house with continued revenue? They (the punters) can't all be losing.
Hoofy said:
So my question is: why are so many people still being the punter in financial trading and providing the house with continued revenue? They (the punters) can't all be losing.
They're not all losing but the losers have lost more than the winners have gained, and the house takes the spread. So same as roulette really.I trade for a living, so this thread is interesting to me, so I'll add my thoughts.
Yes you can make a decent profit trading any market, however there are some caveats.
Never go live unless you can triple a demo account. So Take £1k to £2k, then £2k to £4k, then £4k to £8k. If you cant do this, then dont trade.
Admittedly, the guy with 25k to 85k, sounds stupid, but there are some rare truths in his trading. Essentially, he is cutting his losses fast, not getting involved in rangebound markets, and hitting trends hard. That is what you need to do.
A lot of it is psychological, you could give 10 traders a winning strategy. 9 would conspire to lose money by taking side trades when they should be doing nothing.
Yes you can make a decent profit trading any market, however there are some caveats.
Never go live unless you can triple a demo account. So Take £1k to £2k, then £2k to £4k, then £4k to £8k. If you cant do this, then dont trade.
Admittedly, the guy with 25k to 85k, sounds stupid, but there are some rare truths in his trading. Essentially, he is cutting his losses fast, not getting involved in rangebound markets, and hitting trends hard. That is what you need to do.
A lot of it is psychological, you could give 10 traders a winning strategy. 9 would conspire to lose money by taking side trades when they should be doing nothing.
Hoofy said:
Erm. You've missed the point of your own roulette wheel. I thought you were just suggesting to be the house rather than the punter.
So my question is: why are so many people still being the punter in financial trading and providing the house with continued revenue? They (the punters) can't all be losing.
I was suggesting be the house and I was trying to explain that the vast vast majority are losing!So my question is: why are so many people still being the punter in financial trading and providing the house with continued revenue? They (the punters) can't all be losing.
Perhaps not all - some might do some genuine research - mo' trading generates some alpha... some might be quants.
Retail punters ALL LOSE though.
walm said:
I was suggesting be the house and I was trying to explain that the vast vast majority are losing!
Perhaps not all - some might do some genuine research - mo' trading generates some alpha... some might be quants.
Retail punters ALL LOSE though.
Thing is, there are a hell of a lot of retail punters out there paying the likes of Saxo, right?Perhaps not all - some might do some genuine research - mo' trading generates some alpha... some might be quants.
Retail punters ALL LOSE though.
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