The biggest myth in forex trading is that you will make money at it, you will not. If you are considering day trading then you need to look at one key fact that will guarantee that you will lose.
This is the fact:
All short term volatility is random.
If you think about it's obvious – millions of traders are trading each day, trillions of dollars change hands and to say that you can predict what they will do in a matter of hours is laughable.
Volatility is random and can and does take prices anywhere in short periods.
Support and resistance levels are meaningless, as are any other technical indicator you care to pick.
Tehcncial indicators only work on data where you can calculate the odds and in day trading you may as flip a coin and you success rate would be the same over time.
Most traders have no interest in daily levels (apart from the small minority of losing day traders) you have central banks, hedgers, large funds and successful speculators and they pay no attention to daily levels.
Where's the evidence?
You will see more day trading systems sold online than any other type of forex trading system and they all make grand claims:
80% profits per day, scalp 20 pips each day earn $ 15,000 a month guaranteed etc
And do they have any evidence to back up their claims? NEVER
All they produce are meaningless track records which are always hypothetical (check their disclaimers) and there done in hindsight! – Let's see, if I knew tomorrow's closing price today I would be rich but I do not have that luxury and neither do you.
You never get a track record of real profits done in the market, but that's the REAL Test of a system.
95% of forex traders lose so its hard to make money anyway.
Buying an e-book or day trading system for a few hundred bucks and thinking you will make money will increase the odds to 100% – PERIOD.
If You Want To MAKE Money
Forget forex day trading and look at data where you can put the odds in your favor.
This means swing trading or long term trend following.
This gives data over a longer period that is PROVEN to increase the odds of success.
Day trading systems sell on copy, hyped claims and in many instances downright lies. Many offer you your money back if you buy one if you dont make money – but you have already lost more in the market!
Ask for a guarantee for the trading losses you are going to get back – now that would be a fairer guarantee!
If you want to win get real and trade the odds and that means looking longer term – enough said.