Why Trading Forex is so Difficult - Randomness in the Markets: Clusters of Bad and Good Luck
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- Опубліковано 26 сер 2024
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Why Trading Forex is so Difficult: Randomness in the Markets: Clusters of Bad and Good Luck. David Paul, Financial Trader comments. If you found value in watching this video, PLEASE LIKE AND SHARE so we can do more! It is always my understanding that it is difficult to make money long term when trading currencies and indices - how do you manage? Most trend following systems have less than a 50% correct hit rate. This means that you get a series of losing trades from time-to-time - how good would you be with executing your system with precision when you get 5 losing trades in a row.
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dont listen to a forex trader who says its easy. he hasn't hit the wipe out yet. trading forex is a humbling experience. theres absolutely nothing 'easy' about trading currencies.
If it was easy then everyone would be doing it...
He’s only 24; that’s what trading does to you
Even if u win 50% of the time with Risk:Reward = 1:2, you are still profitable. If u win 30% of the time with Risk:Reward = 1:3, u r still profitable.
Trading is Mind Game.
It tests your Patience to wait for the perfect entry. Sniper Entries? They are done after a setup forms on Daily. Then wait for a setup of 4H, then 1H and then take the shot. This process requires PATIENCE. Trust the process and you will win.
I am quite profitable in Forex and been working very hard for the last 2 years. It was a great journey. It fucks with your mind, but you have got to be Patient. No greed.
This master just summerized entire successful trading in just few sentences. Take a bow for your experience n wisdom sir.
Well said. The best trader are not the ones with high IQ, PhD in math, nor the technical or fundamental analyst expert, but the ones who arent mentally destroyed in bad times and still have his own alarm and rationality in good times.
i am just starting to learn trading at 62. My son said this is what teenagers do. I will show him wrong! FX is like Chinese to me now but i will become a successful institutional trader!
Legend has it, he’s still holding eye contact!
I have to agree with him, it gets hard to check myself when my trades are going right, there is a sense of invincibility that comes when you are getting it right and it can be also be devastating if you end up in the chop. Discipline is everything in trading!
The psychology of trading is the hardest aspect to overcome!
I've learned that blocking the emotions and sticking to the strategy even during a bad run is a good habit to have. I've managed to lose 5% over 5 trades and then made it back to break even in one trade. Patience and persistence. And never stop learning.
Risk management is everything. Profits take care of themselves.
I loved this interview. That was liquid gold running from his mouth, shining diamonds of knowledge in every sentence. So good, so so good
That shit stressed me so bad that I started coming out of remission from my thyroid issues. I had to quit Trading Forex recently. My health and well being are my most important investments.
Listening to this confirmed a crucial mistake I used to make for years and now corrected. "YOU DON'T PICK THE TREND FROM THE DAILY!" The randomness from the daily to lower TFs increases as you go lower. The trend picking should always and only come from the Monthly/Weekly TFs. Know this and have peace!
My best trading week i was taking huge risks, around 10-20% per trade, i was very emotional too because of lot size.What made me tons of money was just adding to winners, cut losses when i realize i was wrong and sticking up with a strategy. Now a days im too scared to do it again, just thinking that 3 or 4 wrong trades could have destroyed me...but ended up very very good. Number 1 rule: go with trending markets, dont try to find the top or the bottom
Excellent interview. Key point for me is managing risk. Forget about how many losing trades you have just try to keep them small and let your good trades play out. In practice you can have more losing trades than winning trades and still turn a profit if you have the discipline to cut your loses and let the winners run.
Hey man, I feel you bro. Lost a lot of my money in the beginning, then really opened my eyes and listened to real investors. Now I just buy long term stocks, etfs, index’s and just focus on compounding. I don’t even check my account anymore, but every time I do, it goes up higher and higher. Slowly, but it really works. Day trade and swing trade really screwed me over.
I could listen to him talk about forex for hours - this is gold.
I believe the key is to know when to leave it alone. I'll wait weeks if necessary until I see a clean, clear trend. I've lost too much trying to trade anything else.
10million points for saying "muthi". this Zulu will now listen to you for ever
As a forex trader it's almost inevitable that you're going to experience some ups and downs along the way. Alertness and decisiveness are both fundamental in the recipe for a successful forex trader.
This guy is unbelievably honest. He sounds like success is all about understanding statistics and risk /Money mgmt, not about market knowledge!
Good lesson, biggest trade he ever had was one he forgot about. I think we are our own worst enemy. Winning trade? Let that shit run. Easier said than done. :)
He said it all "Market makers & Algos". They control the market very carefully, markets are not random. What is "random" is your outcome or results in the SHORT TERM.
Everything this man has said is great content.
One of the best interviews!
Two words Risk Management 👌
Forex is difficult not because of the randomness of the market (because it's not random as u may think) but the ability to control your emotions
Trading FX is the most difficult thing I have ever done.. but I wouldnt want to do anything else.
Honestly he's 100% right. I've been on and off with forex but recently I came across some really good risk management advice and a simple strategy and honestly my mind is blown. I'm pretty busy rn so I haven't even got around to setting up a new demo account but I've been watching the charts when I get a break and just watching and there is money to be made if you can stick with it. The strategy doesn't necessarily get you out at the best time it's consistent in being right more often than not. Add risk management and you're good. At least it appears that way.....I'll know in a couple months.
It's all about RISK MANAGEMENT, assuming you do you technical (chart) analysis thoroughly, based on proven historical trends, and thus enter a viable trade, then put in place a trailing stop loss of 1 or 2% of your a/c, you can't go far wrong. You may have say 3 or 4 losses before you have a win, but if those losses are small and controlled, you should make steady gains over time.
This right here is one of the BEST video i've ever come across on UA-cam
This guy give some of the best advice on the entire Internet in less than 10 minutes
Wow, this gentleman just described what have been my observations and conclusions after 6 years of trading. Unfortunately, as simple as it all sounds, it takes years of losing money to reach those conclusions. To be a profitable trader, you have to have very clear in your mind how probabilities work, which by the way, most of the time, are counter intuitive.
Now I understand how my Grandma feels When I Try to Explain social media to Her 😂 😂 😂
He is somewhat correct, you will lose in the fx market if you are gambling but if you have set certain rules then you can execute every trade with accuracy ! 99.99 % of traders are speculators which is why so many traders lose. speculation is the form of all evil. if you don't have a winning system Don't trade !
Love how he just quitely slipped in how he trades at the start. Clearly no hidden agenda there.
I've been day trading full time for 4 years now. About 50% of my trades are in the forex. Its a different beast for sure from stocks or futures but it isn't more difficult imo. You need different strategies. Its more similar to trading penny stocks. True that with every trading strategy or system even if you have a 80-90% strike rate you will hit draw-downs sometimes many in a row although that isnt typical. Any vetran trader will tell you they dealt with these things early in their careers but that goes away after a while. The psychology angle he's referring to is mostly for new traders. Those big bets hes referring to i went through as well. i cut that shit out long ago. Gotta manage your risk and position size constantly. There is some silly stop hunting going on in forex for sure
The more Timeframe you use to analyze..the more you will get confused..try to use 1 tf only..that how u can easily trade n make money in forex..use 4hour is the perfect tf
He's not lying here he's talking about the real reason why traders fail it all comes down to risk management.
This is a masterclass from the best.This guy has the best advice I have heard from anyone I've heard.11/10 sir.......110%.....
One of the most important things if you're going to be a trader is psychology. What he speaks of around 05:00 is squarely a psychology issue. Best material on this subject is Mark Douglas' books, The Disciplined Trader and Trading In The Zone, which audiobooks are in abundance on YT. Choose which one works best for you bc they are not all the same.
wow. My inner divine voice just got replaced. Spot on. A week of wins and I got cocky at NFP day of all days. 😅 Wiser for it.
after this video i am considering selling my granny
For 50% win rate? Wack.
Six years later and your information is still relevant 🙌
You are correct. It is all about self-discipline when making & losing money. In forex, you must gauge risk every moment and regulate your position size and stop loss to weather the storms (clusters of luck). If you are disciplined enough on your risk, you won’t even need a stop loss, and can focus on your profit taking spots.
there is a simple solution to all this (Because of Market Manipulation.. I call it the Snail and the hare), Distant your stops and trade short ( meaning a psychological not to think big, because big is a gamble) trade with low constant profits, follow the trend and sell if you have to and stay ahead.
feel like i've just been hit by a truck, He had me on every word. Exceptional.
This video was one of the many keys that sparked my profitability in the markets, I come back to it often. Thank you ❤
David should see how high my probability for 10 bad trades in a row is.
He is using the 4-hr chart to enter a trade. His horizon must be in months and his stop loss is 150 pips.
I'd walk through glass to be this man. He's on whole another level.
True, i lost everything by getting overconfident after a good run
I remember this video since 2018, and that was an " WOW ! Moment " for me. Thanks a lot for sharing a such inspiring interview.
Basically if you cut losses short and you keep a minimum 1:3+ Risk ratio you’re onto something decent.
@Allan Mena
I agree with you those who know how to trade forex will never tell you......
There are a number of strategies out there. Risk management is the key, as the video suggested. If you want a strategy, go to babypips. Also, this channel has a number of good ones. Mark posts them all the time.
This guy is a great story teller , so entertaning !
My boy blinked only like 4 times in this whole video
Sir Forex may Be Deficult but India index option is 😢
i think i'm going to watch this chap everyday before i put any trades on
Excellent interview.
Why do many successful traders get bankrupt many times before achieve the success ? I like the markets but I don't want to get bankrupt before achieve the success.
His best trade was when he didn't touch his position for a few days. I always thought it's the best strategy ;)
Ayy did he just say "muthi" in zulu .. all the way from SA 🇿🇦🙌🔥
In 2023, unfortunately, what this guy says don’t work anymore. It used to work maybe 15 years ago, but not now. What works now is only Algos.
Hes so right about the Market makers and algos picking off those stoplosses 😂. The market will pick your pockets clean
14days of hardwork and focus can put you many years ahead i just got into forex and I made my first profit wish I knew about this earlier
The reason you lose is because you cannot see one minute into the future.
Knowing that currency prices are almost normally distributed helps. Making money in forex is difficult analyzing a chart. Rather apply statistical analysis on currency prices over the very short term. 1 minute, 5 minutes and 15 minutes.
TRUST ME i have been able to help a lot of people make more profit and myself as well from the help of all your videos and sessions i have been listening to. you are such a great teacher and a friend...... i will continue saying a big thank you
Hommie didnt mention about the green space on roulette...
It's a tradition to come here once a while
How have I never come across this master before.
It’s easy to pick apart a chart when everything is done but in a live market it’s not that easy especially with forex. You can look at the daily chart for trend and momentum can change in a heart beat. For those who think they will become millionaires by doing this be prepared to lose your capital before you start seeing any positive results. It’s a probability game simply put. Market is a cycle accumulation, manipulation and profit release. You do not know which cycle is present in front of your eyes till many bars later. Ranging markets are a true killer to your account it will wipe your whole account.
Anyone trading forex based on luck is doomed to fail because trading isn't about luck but pure skill cultivated over a period. It is like developing any other skill such as writing, singing, instruments, cobbler etc. You have to understand markets and how and why price moves in markets. People who succeed in forex understand where market movers are willing to buy and sell.
Anyone who believes primarily in luck for trading success has a problem with his/her view of reallity. Your view is being obscured by irrational, illogical, non-evidence based mentality which can be found mainly in people of faith and people with high credulity.
Lol, clearly a big believer in TA...
clearly, you did not get the wisdom behind his message. even if he tried using simple words to make the point.
So why does price move in the market?
That lad has some right chat! Bald, skinny, past sixty and she was hanging off his every word. Super smooth! 👍🏻😂
When he said umuthi I thought it was a mistake 😂😂 as a South African Half Zulu half Mpondo man, I can confirm he is not lying 🙌🏻
I would like to thank UKspreadbetting for running these videos, especially the man in this one. He recommended a book to read from Mr. Toppel. I just started reading this book and it started to make sense about trading the FOREX for me. I was basically "nuking" it from all the research I have been doing to try and build my trading skills. Sometimes you have to take a step back to take two steps forward. Its a true statement. Thank you UKspreadbetting!
Sadly the average trader isn't aware of these odds and those who are don't really live by it. Trading is nothing but risk management and you cannot understand risk unless you understand probabilities
This guy is awesome. "All the ADX's of the world makes no darn difference"
I started forex trading last wednesday and over two days, i made 21 trades and won 18 of them (85%). Over those 18 wins i made $435 trading 0.1 and 0.2 lots for 5 - 15 minutes at a time. Key to good trading is judging when to enter and exit the market
Hes right. Discipline is the hardest part of trading
David speaks a lot of sense and I love his videos but the title about randomness in the markets is WRONG.
The markets are driven by supply and demand.
Had not thought about it being clusters before... very interesting... I like "The objective of doing business is doing business with the least risk"... Thanks for being a blessing and sharing...
I got a sick winrate, way better than what he mentions, but I risk 1 to make 1 lol. I like winning, so I prefer it that way :)
Just wanted to say, there is not just 1 way to do things.
David was just on point. Hope he is ready to coach newbies on his avid risk management strategies
Study the markets, be in tune with the market, and you’ll get the market to become rich.
his first sentence , a gem already!
"And many trend following traders would sell their granny for a 50 percent system" classic
Experience is the best teacher.
It has nothing to do with luck. Theres a particular method that outperforms the rest. Genius
No matter how many trades you make, your chances will ALWAYS be 50\50. It's hard to listen to someone who is wrong at a foundational level.
Im confused about the Stats : If you trade twice, your chance of getting 2 bad in a row is 1/2 x 1/2 or 1/4. I take this to mean that if you are going to trade / gamble 2 times, your chance of getting both bets wrong is 1/4 or 25% and if you are going to trade 3 times, your chance of getting 3 bets in a row bad are 1/2 x 1/2 x 1/2 or 1/8 so in 8 spins, you will get 3 wrong. I may be wrong
i want to know when he will 3 times bigger when he think he is right,when is the timing?
It is crazy how many of these guys start with the negative instead of giving you something you can use. All of this negative programming by these markets have an affect. You can achieve anything!!!!!
i heard of traders who are apart of my company receiving 80% accuracy, but after hearing this i'm not sure what to think.. its definitely not easy
Trading forex really difficult. The Unusual spikes, even you go higher time frame you will get frequent SL hit.
Wow, I needed this. I'm in a minor drawdown, didn't want to turn a pillow fight into a gun battle and so I took a break and searched for some wisdom.
This is (muthi) right here.
The problem with forex and trading in general is the required capital to start with if you want to live off by trading, at least 50k to 100k, with proper risk management
you pick the trending instrument, decide when to be involved with the trend, and let a robot do the execution. Humans are far more emotional than a machine
Thank you sir. You sound like a professional trader 😉
Wow, so glad I stumbled upon this guy. His crocked tie exudes wisdom.