Day trading systems and methods are one of the most popular ways to trade Forex.
Lets look at a common mistake in relation to day trading that you need to avoid to make money.
Here is the most common day trading mistake.
Believing the logic works
It amazes me people do not see that the odds are against you when you day trade as the logic it is based upon is simply not true.
The biggest mistake of all is that people think they can make money longer term day trading forex.
So why cant you win?
Its common sense really the data is unreliable and cannot be used.
Think about this:
Trillions of dollars are traded daily by millions of traders all with different investment objectives and levels of skill.
Very few pay any attention to daily volatility (its obviously random) and daily ranges which simply are not relevant - volatility in daily session goes wherever it wants.
Most traders accept this fact but not day traders they believe there is order in hourly or daily frames and of course there is not.
No indicators work in short time spans
Day traders of course use pivot points and support and resistance to enter trades and place stops and wonder why they continually get stopped out.
Day Trading breaks one of the fundamental rules of investment
Which is of course run profits and cut losses quickly
Of course day traders cut losses quickly and keep them small and they of course have a lot of them!
Day traders though cant run profits. This is alien to day trading, they are happy to scalp a few points and get any profit they can but of course these can never cover the huge amount of small losses they generate.
The result of relying on unreliable data is a lot of small losses and a few small profits which sees them wiped out over time.
TRY THIS TEST
Find a day trader who can give you a real time track record of profits made in the market over the longer term say 2 or 3 years and you wont get one.
There are many vendors selling day trading systems and they make money from selling their method to you and are not foolish enough to trade it themselves.
They produce hypothetical track records that are done in hindsight.
Thats not hard when you know the closing prices anyone can make money!
The real proof is making money and the fact is day trading is not a way to do this and ask for a real track record and you wont get one.
Get the odds in your favour
The biggest mistake in relation to day trading is to believe that it works it doesnt and there are far better ways of making money where you can put the odds in your favor.