I've been doing a lot of research on this particular rule, and it really seems the odds are stacked against us. You see most of the brokers we deal with are not "non-dealing desk" brokers, which basically means that they are market makers. This puts us in direct competition with them. At this point I am very skeptical that someone can win consistently dealing with these kind of brokers. I mean we are basically in competition with someone that can see every aspect of our orders, including stop losses and profit marks. If I can not find a reputable non-dealing desk broker, I'll most likely switch over and trade a regulated exchange.
The following two links will give you additional insight, please take their warnings to heart.
http://en.wikipedia.org/wiki/Forex_scams
I'd like to personally thank Phil for his efforts. It's really been an eye opener for me. Phil will be starting a public forum where forex traders can discuss their interaction with brokers, and hopefully the discussions will lead to answers. There's a lot of good information on his blog. Please study it carefully.
http://nondealingdesk.blogspot.com/2006/05/spiking-fact-of-forex-life-if-so-its.html
Sunday, July 23, 2006
Monday, July 17, 2006
Plain Old Truth - Rule #2
Okay...Let's get started with Rule #2. Bottom line don't trust anyone. If they're trying to sell you something you need to exercise some common sense. Everyone is in the Forex venture to make money. Everyone from your broker, folks selling the systems, alert service, and us the traders. There's an old saying out there that goes like this....
"If you want to make money during a Gold Rush, sell the picks and the shovels."
Well the Forex is definitely a Gold Rush, and there are a lot of folks selling worthless picks and shovels. Let's break these down a little.
The Broker:
The Broker is out to make money like you and I. How do they make their money? Mainly by the spread difference between the bid/ask prices. Well lets think about that a minute. So if a broker wanted to create more revenue how would they do it? First they could encourage traders to trade more. Here are a few examples you've probably seen. Offer monthly trading contest for a cash prize. I don't know about you guys, but when I see how many pips those top guys make, I want to start trading my ass off. Give away free software that you can create EA's (Metatrader) with to trade 24/7. Or make API's available so you can program your own robot to trade 24/7. Bottom line the broker acts just like a casino. Time is on their side. They know the longer you trade the more likely they'll get your money.
The second thing they do is stop running. This is pretty easy for them considering there is no common price between brokers for a currency pair. There's no central exchange, they are all on their own. I've actually picked the act turning point with my stop loss dozens of times. It's funny when it happens I'll open a chat with my broker and tell the support person that once again I picked the exact turning point with my stop loss. I'll go on to say that I had the same position opened with my other broker (same stop loss) and it never got stopped out. I get some pretty interesting comments. Afterwards things calm down a little, and then later it starts back up again.
The last thing you need to know is to be careful when someone is recommended a broker. You see a lot of blogs/websites with broker recommendations on it. I'm not referring to the Google Ads you see, those are pretty harmless. I'm referring to how some brokers will actually give people/companies commissions for referring folks. Here's how it works. The person that recommended you can actually get a per-trade commission fee every time you make a trade. Sometimes that fee can be $1 per mini-lot. Yeah it makes you feel pretty good about the advice you've been getting from their blog/website doesn't it.
The Sellers
I like many others I have thrown a lot of money away on crap. Looking back if I just would have used some common sense I would have saved myself a lot of money and time. Don't get me wrong there are some good courses, books, and mentors out there. You just need to make sure you do your homework. Go to Fx-Review.com and see if anyone has information about them. This is one of the few times I would recommend it, but go to the forums and do a search for the person and whatever they are selling. If someone has had a bad experience it will be their. Basically if it sounds to go to be true it is. Ask for references, ask for broker statements, get specifics from them. I would never recommend buying something from another trader. I don't care how good they say they are. I've been their and it doesn't work. I look at it like this. If I had a system that made consistent profits, the last thing I would do is sell it. Think about it, if it works your making money. Why in the world would you want to mess with customer service, answering question, just the overall BS of making sales. The bottom line is...You wouldn't. Real trading takes concentration, and good traders don't mix the two. Good salesman will though. It's obviously crap so stay away from it. The other thing you need to keep in mind is that if this person/company developed something there's good chance it won't work for. Trading personalities are all different. One system doesn't work for everyone, and a good trader knows this. So if a "good" trader is trying to sell you it, they're taking advantage of you. You also need to be aware of something else. Take a look at the following chart. This indicator calls the tops and bottoms perfectly. Just go long when green crosses the zero line, and go short when red crosses the zero line. Pretty amazing isn't it??
Well custom indicators can "repaint" themselves. So what you see here is not what you would see in real-time. Looks pretty convincing though doesn't it?? Oh Yeah, SolarWinds is not the real name of the indicator. It's an indicator that someone else developed that went by a different name. The originator however was up front about the repainting issue. You'll see this a lot. Folks take an indicator, create a system/methodology with it, rename it, and sell it. Stay away from these folks. They're just out there to take your money.
I'll elaborate on the "sellers" section a little more when I get into Rule #4. Who knows I might even give you some specific examples I've been through.
Summary:
Just use some common sense. Initially don't trust anyone. The people that sell the picks and shovels are slick. They know you need certain things to make it in the Forex gold rush, and they are going to make whatever they're selling as attractive as possible.
"If you want to make money during a Gold Rush, sell the picks and the shovels."
Well the Forex is definitely a Gold Rush, and there are a lot of folks selling worthless picks and shovels. Let's break these down a little.
The Broker:
The Broker is out to make money like you and I. How do they make their money? Mainly by the spread difference between the bid/ask prices. Well lets think about that a minute. So if a broker wanted to create more revenue how would they do it? First they could encourage traders to trade more. Here are a few examples you've probably seen. Offer monthly trading contest for a cash prize. I don't know about you guys, but when I see how many pips those top guys make, I want to start trading my ass off. Give away free software that you can create EA's (Metatrader) with to trade 24/7. Or make API's available so you can program your own robot to trade 24/7. Bottom line the broker acts just like a casino. Time is on their side. They know the longer you trade the more likely they'll get your money.
The second thing they do is stop running. This is pretty easy for them considering there is no common price between brokers for a currency pair. There's no central exchange, they are all on their own. I've actually picked the act turning point with my stop loss dozens of times. It's funny when it happens I'll open a chat with my broker and tell the support person that once again I picked the exact turning point with my stop loss. I'll go on to say that I had the same position opened with my other broker (same stop loss) and it never got stopped out. I get some pretty interesting comments. Afterwards things calm down a little, and then later it starts back up again.
The last thing you need to know is to be careful when someone is recommended a broker. You see a lot of blogs/websites with broker recommendations on it. I'm not referring to the Google Ads you see, those are pretty harmless. I'm referring to how some brokers will actually give people/companies commissions for referring folks. Here's how it works. The person that recommended you can actually get a per-trade commission fee every time you make a trade. Sometimes that fee can be $1 per mini-lot. Yeah it makes you feel pretty good about the advice you've been getting from their blog/website doesn't it.
The Sellers
I like many others I have thrown a lot of money away on crap. Looking back if I just would have used some common sense I would have saved myself a lot of money and time. Don't get me wrong there are some good courses, books, and mentors out there. You just need to make sure you do your homework. Go to Fx-Review.com and see if anyone has information about them. This is one of the few times I would recommend it, but go to the forums and do a search for the person and whatever they are selling. If someone has had a bad experience it will be their. Basically if it sounds to go to be true it is. Ask for references, ask for broker statements, get specifics from them. I would never recommend buying something from another trader. I don't care how good they say they are. I've been their and it doesn't work. I look at it like this. If I had a system that made consistent profits, the last thing I would do is sell it. Think about it, if it works your making money. Why in the world would you want to mess with customer service, answering question, just the overall BS of making sales. The bottom line is...You wouldn't. Real trading takes concentration, and good traders don't mix the two. Good salesman will though. It's obviously crap so stay away from it. The other thing you need to keep in mind is that if this person/company developed something there's good chance it won't work for. Trading personalities are all different. One system doesn't work for everyone, and a good trader knows this. So if a "good" trader is trying to sell you it, they're taking advantage of you. You also need to be aware of something else. Take a look at the following chart. This indicator calls the tops and bottoms perfectly. Just go long when green crosses the zero line, and go short when red crosses the zero line. Pretty amazing isn't it??
Well custom indicators can "repaint" themselves. So what you see here is not what you would see in real-time. Looks pretty convincing though doesn't it?? Oh Yeah, SolarWinds is not the real name of the indicator. It's an indicator that someone else developed that went by a different name. The originator however was up front about the repainting issue. You'll see this a lot. Folks take an indicator, create a system/methodology with it, rename it, and sell it. Stay away from these folks. They're just out there to take your money.
I'll elaborate on the "sellers" section a little more when I get into Rule #4. Who knows I might even give you some specific examples I've been through.
Summary:
Just use some common sense. Initially don't trust anyone. The people that sell the picks and shovels are slick. They know you need certain things to make it in the Forex gold rush, and they are going to make whatever they're selling as attractive as possible.
Saturday, July 15, 2006
The Plain Old Truth
Like most of you I have seen a lot of things take place in the Forex community that just isn't right. I've decided to sum some of my expriences up into rules. Hopfully someday someone will stumble across this site, and it will make them better prepared to tackle the Forex and the Forex community when they start their quest to become a full-time trader.
Anyway I've pretty much summed everything up into 8 Rules. I'm planning on posting all the rules here and then, as time goes on, I'm planning on elaborating on them in individual posts. In each post I'll share some insight and some of my experiences with each rule.
----------
Here they are....
1. Use common sense.
2. Don't trust anyone.
3. Learn how to trade. (No automatic trading systems).
4. Don't buy a system or "Methodology" from anyone. Create your own.
5. Stay out of the Forex forums.
6. Do not use Alert services.
7. Hire a mentor. (After proper screening).
8. Treat your trading like a business.
----------
Rule #1
I decided to go ahead and elaborate on this one here, because it's going to be relatively small. Basically all we need in the Forex world is a little common sense. I mean really just think about things. The old saying still holds fast.
If it sounds to good to be true it is.....
You'll basically use Rule #1 when you are faced with all of the other rules.
So again just go back to the basics and use some good old common sense. Out of all the stupid things I've done, including buying junk trading courses, lowsy trading systems, picking brokers, etc. If I just would have used some common sense I would have saved myself a lot of money and heartache. It's hard sometimes though, because you want to make it so bad that you convence yourself that it works. And that is what these "Slick Willy's" feed off of. Instead just step back an realizing that it's all crap.
Anyway "Use Common Sense" is Rule #1
Anyway I've pretty much summed everything up into 8 Rules. I'm planning on posting all the rules here and then, as time goes on, I'm planning on elaborating on them in individual posts. In each post I'll share some insight and some of my experiences with each rule.
----------
Here they are....
1. Use common sense.
2. Don't trust anyone.
3. Learn how to trade. (No automatic trading systems).
4. Don't buy a system or "Methodology" from anyone. Create your own.
5. Stay out of the Forex forums.
6. Do not use Alert services.
7. Hire a mentor. (After proper screening).
8. Treat your trading like a business.
----------
Rule #1
I decided to go ahead and elaborate on this one here, because it's going to be relatively small. Basically all we need in the Forex world is a little common sense. I mean really just think about things. The old saying still holds fast.
If it sounds to good to be true it is.....
You'll basically use Rule #1 when you are faced with all of the other rules.
So again just go back to the basics and use some good old common sense. Out of all the stupid things I've done, including buying junk trading courses, lowsy trading systems, picking brokers, etc. If I just would have used some common sense I would have saved myself a lot of money and heartache. It's hard sometimes though, because you want to make it so bad that you convence yourself that it works. And that is what these "Slick Willy's" feed off of. Instead just step back an realizing that it's all crap.
Anyway "Use Common Sense" is Rule #1
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