Wednesday, May 28, 2008

The Best Informaiton on forex trading education

Forex Trading - The Day Trading Myth(s)

There is a whole mythology surrounding day trading. Numerous myths have sprung up around it. Some myth busting needs to be done. :-)

1) There is a trade (or more than one) every day. No. There isn't. If you try to trade like that, you are going to have problems. It's called over-trading. The spread will eat you alive. You're trying to trade like a broker without the advantage of being spread positive.

2) You're always flat at the end of the day. Not true. This relates to the first point. If you try to get in and out quickly, you won't let the market give you anything. But it doesn't matter if the market gives you anything or not, the broker is going to take his share one way or another. You will (in terms of your account balance) bleed to death.

3) It's easier than other kinds of trading. Really? I think the real meaning of this is it's easier to sell day trading courses than other kinds of courses. Remember the old line about a sucker being born every minute (they're actually being born faster now). It's still true.

4) The market is the same on all time frames. They would have you believe that things happen on the five-minute chart just like they do on the daily chart, just the daily chart is slower. Not so. The market is much more random on the faster time frames. More randomness, means it's harder to discern what is really going on. And that means it's a recipe for being separated from your money.

Do you want to learn more about how I trade? I have just completed my brand new guide, "Forex Trading - What Finally Worked For Me".

Download it free here: Forex Trading

Nathan Pennington is a forex trader and the author of Winning Forex Trading -THE Definitive Guide


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