(by Sacha Tarkovsky)
Day trading is popular and you will find more vendors selling day trading systems than any other method.
People buy them yet they don't work and guarantee you will lose longer term. Why?
Let’s find out.
Successful trading is all about trading the odds and you must have data that’s reliable that enables you to do this.
In day trading you simply don’t have any reliable data to work with and therefore cannot get the odds in your favor and may as well flip a coin.
Trillions of dollars are traded daily by countless millions of traders and daily volatility is random.
Therefore, using support and resistance areas in a day session is useless.
The only people who take any notice of daily support and resistance levels are day traders and their small losing minority.
The net result is:
Day traders place stops behind meaningless levels and are then surprised when they get stopped out. Of course, even if their lucky enough to get a profit in day trading, they break one of the fundamental rules of investing:
Run your profits
Day traders are normally glad to scalp a few points or want to close out at the end of the day.
They therefore have huge amount of losing trades and their winners are tiny ensuring that their account equity is wiped out quickly.
Still not convinced?
Then try this simple test:
Ask any day trader for a real time track record of profits over the longer term and you simply won’t get one.
Of course, they can produce hypothetical track records (but their done knowing the closing prices!) so they are no use at all.
People selling day trading systems make their money selling a good story and collecting money from greedy or in experienced traders, so they are guaranteed to make money while the trader loses.
Day trading sounds great in theory but although it looks low risk it is not.
You are working with data that is simply unreliable and all day traders eventually end up losing their money.
If you want to make money in online forex trading then avoid day trading.
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