6 Guaranteed Forex successful trades in a row
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It was very sad to note how many new traders fall for tall claims. But this is not their fault. Many decide to trade forex with one limited objective and that is to overnight make tons of money.
No doubt you will find people who have overnight made fortunes in these markets, however, their number is limited but there are countless who have lost everything (some even their lives) in a bid to make this kind of money.
Many of you signed in just out of curiosity, many for fun and maybe some took it seriously.
I don’t know how many noticed that this thread was started in Rookie Discussions section and not as any Trading Method or Trading Discussion thread.
If you really want to succeed in your life, it is through hard work, being nice, helpful, humble, knowledgeable and wise.
Maybe I have lived more life than many of you and I think that gives me a right to share a little what I have learned from my experience. If I look back at my life, feel that I would have been more successful had I focused on few goals and objectives and tried to excel over the years in whatever trade or profession I had selected. I am not saying I did not narrow down my focus on few particular skills or a field of knowledge, but only later in my life……….. but it still paid off.
“Success is progressive realization of a worthy idea”. Set a goal for yourself and work towards it, day in and day out. It will take time but you will get near. If trading is what you want to go for, learn everything related to markets and trading, get formal education in economics and finance. Make it your profession and someday you will be good professional trader or banker or investment advisor or investment banker or fund manager. It will be good for you and for your dear ones. This is the only trade that will never fail. Like I said it will take time, you will have to wait for the “right set-up”. More time and efforts you spend more yield and return you will get.
The first mistake which most new traders make is that they fall for leverage. When they hear that they can take a position 50 times greater than their trading capital, they start calculating profit which is 50 times over. Some even go to the extent of 1:500 leverage.
A few years ago I met a trader-couple who trades successfully. The husband and wife told me that they take only one trade in a year or sometimes one trade in even two or three years. They hold this trade until it shows good profit. This is not the science. The science is understanding what works and how.
They told me that they do not follow trend, but go against the trend. They told me that they have all the working, tons of it, to prove that trend followers cannot be as successful as they both were. They sold when market was very high and bought when market was very low.
I did my own research on their method and came to conclusion that they were only 50% right. At this point, I really understood the meaning of an old saying that “If you buy and hold a losing position it may empty your wallet. But if you short sell and hold, it may empty your vault”. I correlated this with my gambling rule #2 “There is limit to how much you can lose, but no limit to how much you want to gain, therefore you are eventually bound to lose”.
Putting all these three together, I came to conclusion that there is only one way one can gain without losing a single trade, that is: Buy to sell, and never short sell to buy later when it drops – Why? Tell me, can gold go to zero? Can it double in value? If you buy it at $1700, it will never go to zero and therefore the maximum drawdown will be less than $1700, but there is no limit to how much you can gain. But if you short sell it today, it can go to $5,000 or higher but your profit will never be more than $1700.
Same is true for currencies. Stable currencies can go to zero only in rare circumstances, ….very very rare……… but there is no limit to how much they could rise. If you are playing with right leverage (or no leverage) and only buying, you will lose only if you sell before it shows profit or if you don’t have enough money to pay for the carrying cost. Carrying cost (interest/swap) is not trading loss, it’s an expense. Similarly if in rare circumstances, a currency fails, the loss is not a trading loss but a capital loss. Hence, technically, you have no trading loss.
Therefore, the bottom line is: control your leverage, buy only when it is very low and hold. You should have adequate holding power and your leverage should be such that you could survive even if it gets to lowest level possible. It should work better for commodities because commodities cannot go to zero. The preference therefore should be 1) Commodities, 2) Major Reserve Currencies or Market Indices, and 3) Stocks. Individual stocks can go to zero.
For more details about the above use this link:- http://www.forexfactory.com/showthread.php?t=400483