Today, the institutions that most promising career choices and also the best ways to earn money is Trading in financial. More and more people have left their jobs to get an action in the financial market, because interested by the opportunity to earn a lot of money of   trading in the financial institutions. 

In fact financial market is the most liquid and the largest market in the world which involves all the countries, so that wouldn’t to trade in this market.  Besides, for people who are considering making a career out of trading, the forex market is the best choice.

The forex market  can go as high as 2 trillion dollars  each day in currency exchanges  and  operates 24 hours  a day.  Also ,  By the most liquids market  in the world , this market  give the easy for the traders  to enter  any time the want  and get their earns.

We must  say thank  to  communications technology  and  high speed internet  ,  because by that technology  usual  people now can trade and participate in the  world’s largest financial market. In the past only the large financial institutions and the big companies can enter the forex market.

Due to the forex market is a very lucrative industry and every day  more to be easier  for everyone to enter, forcing online Forex brokerage firms improve services and their accessibility. They also designed a trading platform that is easily accessible and  different for each different type of forex traders, their software from time to time are still being developed.

In general, they provide the opportunity for people to open a mini forex account, where with just $ 100 even smaller trader can make a deal.

You must have not a lot of things to start when you are interesting  to join the forex market.

The one of  important thing you must have is a computer with high speed internet connection. If you do not have a high speed internet connection you better forget about forex trading. Effectiveness in a forex trading depends on the Internet connection speed .  It will also minimize the risk of slippages that can cause you to lose money.

The next important thing is to choose a forex broker company that you will hire. These companies will give you a forex trading plafform, a simple software program that has an important role in online forex trading. This program can be downloaded and installed easily.

Here are some features of forex trading plafform that should be taken into consideration so that you can develop your profit and minimize the risk of losing money .

•    Allow you to  practice in the dummy account
• Provides accurate and up to date real time information, security, and stability
• Provide information on at least 16 currency pairs
•  Execute orders with just a click of the mouse
•  Have charting tools to perform technical analysis
• Have a recording feature that will store your trading history.

These are some of the things you should look for in a Forex trading platform , May be useful.

If you started this Practice Exercise #1 you probably notice that this isn't working on ranging market (we had some examples of 5% losses on the last couple of days, due to Cyprus situation).

Testing this, with a SL=30p, we notice that in a range market of let's say 50p, our profit target of 90p is almost impossible to reach even if our position run in profit, for a while. And the SL will be hit, eventually, unless the PA will break any side, to have that 50% to catch the new trend (based on flipping the coin math probabilities).

The first idea that we can think of, to improve the initial exercise, is to use the Position Management (to "lock the profits"). 

NEW:
The second idea that we can think of, is to use a double number of pips as SL = 60p. And of course to double the TP = 180p, as well. The reasons behind this are described here.
In order to keep the same MM, we can't use 20 opened positions like in the Exercise #1 (since we've doubled the SL and we need to keep the same % of loss per trade ).
Then, we will have the next steps for this new exercise:

1. Open a DEMO account = $10,000 (or continue to use the old one)
2. Take a coin (yes a coin).
3. Establish which coin sides will give you the signals. E.q head = long, tail=short
4. Open 10 pairs on your platform (NEW)
(only pairs for not ruining the margins requirement. e.q no gold/silver/oil/indices, etc)
5. Flip the coin for first pair.
6. Enter (market order) using 0.01 lots (0.1 for $100,000 account), SL = 60p, TP =180p (NEW)
7. Go to the next pair and do the same entry technique, then the next...until 10 pairs (not 20 like in the previous exercise).
8. After having 10 opened positions, stop trading (NEW)
9. If any position run in profit, move the SL = Entry ± Spread ± few pips or use Trailing Stop
10. Let all the positions to run, until the new SL/TP hit.
11. If any position is closed (TP/SL hit), on the next day, open a new trade by flipping the coin, again (and move, the SL, for the profitable positions).

* Important note: Practice TEST on DEMO purpose, only!

As I expected, the last week exercise didn't offered us enough published results, due to the people lack of time (jobs, etc). As soon as I will have it, I will update it on the Exercise #2 post.

The result for this Exercise #3 will be published here, as soon as I will have it, as well. Probably this exercise will take us 2 weeks, since we've doubled the SL and TP levels (no of pips). If we will still have a range market, it will be hard to have sooner, some closed trades to count for it.


Best Regards,
^^_Lord_Ice_^^ 

If you started this Practice Exercise #1 you probably notice that this isn't working on ranging market (we had some examples of 5% losses on the last couple of days, due to Cyprus situation).

Testing this, with a SL=30p, we notice that in a range market of let's say 50p, our profit target of 90p is almost impossible to reach even if our position run in profit, for a while. And the SL will be hit, eventually, unless the PA will break any side, to have that 50% to catch the new trend (based on flipping the coin math probabilities).

The first idea that we can think of, to improve the initial exercise, is to use the Position Management (to "lock the profits"). 

Therefore after the step no8 ("8. After having 20 opened positions, stop trading"), we can use the next formula to move the SL for the profitable positions:

New SL = Entry ± Spread ± few pips (i.e. 5p)

Or we can use a Trailing Stop = Initial SL ± Spread ± few pips (In case you can monitor the platform)

(Ofcourse you need to calculate this for every pair, since the Spread can vary from 2p up to +25p or more, for some pairs.)

Then, we will have the next steps for this new exercise:

1. Open a DEMO account = $10,000 (or continue to use the old one)
2. Take a coin (yes a coin).
3. Establish which coin sides will give you the signals. E.q head = long, tail=short
4. Open 20 pairs on your platform
(only pairs for not ruining the margins requirement. e.q no gold/silver/oil/indices, etc)
5. Flip the coin for first pair.
6. Enter (market order) using 0.01 lots (0.1 for $100,000 account), SL = 30p, TP =90p
7. Go to the next pair and do the same entry technique, then the next...until 20 pairs
8. After having 20 opened positions, stop trading.
9. If any position run in profit, move the SL = Entry ± Spread ± few pips or use Trailing Stop (NEW)
10. Let all the positions to run, until the new SL/TP hit.
11. If any position is closed (TP/SL hit), on the next day, open a new trade by flipping the coin, again (and move, the SL, for the profitable positions - NEW).

* Important note: Practice TEST on DEMO purpose, only!

I expect the results to vary, because not everyone can monitor their trading platform, during the day trading sessions (i.e. NY, London). Also, for the Trailing Stop command, the trading station must be on (computer).

I will update here, the average results posted by all of you in my Main Facebook Group, on the end of the next week. We will look for developing new ideas (new exercises) to improve the original statistic, too.

Best Regards,
^^_Lord_Ice_^^ 

One month ago, we started this Money Management Exercise, on my Main Facebook Group.
The main ideas was the importance of the MM in trading, the risk and how this can be managed properly (read more here).

In case you want to do this exercise, follow the next steps:

1. Open a DEMO account = $10,000
2. Take a coin (yes a coin).
3. Establish which coin sides will give you the signals. E.q head = long, tail=short
4. Open 20 pairs on your platform
(only pairs for not ruining the margins requirement. e.q no gold/silver/oil/indices, etc)
5. Flip the coin for first pair.
6. Enter (market order) using 0.01 lots (0.1 for $100,000 account), SL = 30p, TP =90p
7. Go to the next pair and do the same entry technique, then the next...until 20 pairs
8. After having 20 opened positions, stop trading.
9. Let all the positions to run, untill SL/TP hit.
10. If any position is closed (TP/SL hit), on the next day, open a new trade by flipping the coin, again.
* Important note: Practice TEST on DEMO purpose, only!

I know it might sound crazy, but what I need you to see, is what really means to trade with a good MM strategy (+ medium R:R ratio 1:3) and no strategy at all (50-50% to be right, short/long, by flipping a coin).

Also, this way of doing "automated" trades, might help you, if you are the emotional type person (bad for trading). You will understand what really means trading by the rules.

Average results:

Initial account balance = $10,000

Total trades = 50-200 trades / week
Positive/Negative = 1/3-5 trades in profit, only
Total positive pips = 150-250p / week
Total positive profit = 1.5%-2.5% / week
Negative account balance = NONE / week

* Total no of trades (and profits) are related to the time invested in testing this strategy. Some traders couldn't monitor their trading platform whole days, due to their daily schedule, jobs, etc. So their closed positions were spot in the next day, only (to open a new trade / that pair). This decrease their total no of trades, pips and profits.


Conclusions:

As I expected, nobody had a negative account balance / week, by now. Ofcourse mathematicaly, this is possible, but rare (using math probabilities). But the Draw Down wont be higher than 5% ( Signals Providers, offer a DD of max 15%, usually)

And as you can see, by using a good MM and a very bad strategy, or none - flipping a coin is just luck - you can still trade profitable, as a beginner.

The profits, can't be considered "spectacular", thinking that we are using for this exercise a $10,000 account. But if we will remember that by trading Forex, 95% of the traders wipe out their accounts in less than 3 months... (some statistic data present this no even higher, close to 99%).

Also, by using an "automatic" strategy, reduce the time involved to your trading activity. Not to mention, the stress.

We will continue this exercise, to gather more statistic data. Meanwhile, I will recommend you, new exercises, by replacing this "strategy" (flipping the coin) with some real trading strategies. And we will upgrade, later on, the MM, as well.


Best Regards,
^^_Lord_Ice_^^   

+9 pips
- news trade, spread up to 15 pips
- half size

+18 pips
- all half size trades
- initial news spike in gbp/usd wasn't convincing so I exit it quickly

+4
+11
-I'm not really proud of my averaging in eurjpy, risking much for no good reason. If I don't know where to put stop or don't want to accept that it's time for stop it's better not to trade that trade
- I'm far better in those nice scalping situation when stop or gain is quick and definite

If you use this product as much as I do I'm sure you will want to sign it. This petition right now has more then 100,000 signatures. It doesn't mean that it will make Google reverse it's decision of shutting down reader but if I ever wanted to express my opinion and vote it's now for this.

Change.org

+5 pips
- various sizes
- news trade with limit orders didn't work (no spike) so I canceled them

+3 pips

+9 pips
- this news trading turns out to be quite nice sport
- third of usual size because on previous reports there were whipsaws, in previous few occasions move wasn't so big and lasted really only as initial spike that's why I closed it immediately
- good news after bad news in which Google announced shut down of Google reader

+6 pips
- not so good not knowing where my actual stop is, wan't prepared for this type of market action, I expected something easier
- half size trades

+15 pips

- I don't know why I didn't use before those bracket limit orders before the news if execution on Oanda is so good
- half size trades
- again problem with second add on trade, I just lowered my overall profit, move concentration away from first trade and made an exit at worst possible time
- third trade ok
- last two trades maybe holding on one of them longer

1.
+26 pips
- this is market suitable for scalping

4.
+11 pips
- I'm irritated with turning profitable trades in to stop losses

5.
-32 pips
- first loss, then recovery, then some stupid trades, after I recovered half and it wasn't good enough so in the end I made bigger loss

6.
-10 pips

7.
+15 pips
- it's important to learn to have a positive day and keep it

8.
+16 pips
- NFP scalping
- slow exit on second trade
- third and fourth with not enough courage to hold because of need to cover previous losses

22.

-23 pips
- tilt or whatever 15 trades

< no chart >


26.

-8 pips

I've always emphasized the importance of the MM in Forex, in my articles. Yet, many people failed to understand it properly.

Therefore I will take it, again, step by step from the basic theory.

Currencies Rates

The currency Rate is the value of one currency expressed in terms of another.

Common rates can be seen as: EURUSD = 1.3025

This can be read as 1 EUR = USD 1.3025

The first currency (EUR in our example) is the "Base currency" and the second one (USD in our example) is the "Quote currency".

Bid and Ask prices

EURUSD = 1.3025/1.3027
The first rate (1.3025) is the "Bid" and the second one (1.3027) is the "Ask"(Offer).

If you want to "Buy" the "Base currency" (EUR) and "Sell" the "Quote currency" (USD), you will use the "Ask" price.

If you want to "Sell" the "Base currency" (EUR) and "Buy" the "Quote currency" (USD), you will use the "Bid" price.

The difference between Bid and Ask is called Spread (in our example spread = 2 pips).

Pip

Pip = The smallest price movement on a currency. Also known as a "Tick size".
e.g. 1 pip = 0.0001 for EUR/USD, and 0.01 for USD/JPY.


Leverage & Margin

Leverage = multiplying factor that allow you to trade more money than you have into your account.
Margin = the amount of money, necessary to open a trade

E.q:
Leverage 1:50   = 1/  50x100 = 2% Margin (requirement)
Leverage 1:100 = 1/100x100 = 1% Margin (requirement)
Leverage 1:200 = 1/200x100 = 0.5% Margin (requirement)

So let's say you want to trade $100,000. By using a Leverage of 1:100, that means you will need a margin of just $1,000 (1%).

Trading using the Leverage might work in your favor if you are right, but can also take you to the bankruptcy, if the trade goes against you.

Here is an example:

Trader 1 have Initial Account balance = $3,000
Trader 2 have Initial Account balance = $10,000
Trader1 use as Leverage = 1:200 = 0.5% Margin = $500
Trader1 use as Leverage = 1:50 = 2 % Margin = $2000

Trader1 and Trader 2, want to buy $100,000, each.

Scenario 1:
Lets say both traders are right and their trade work in their favor with +100p = + $1,000

For trader 1 = +33.3% from Account Balance
While for Trader2 = +10% from Account Balance

Scenario 2:
Lets say their trade went against them with -100 pips = -$1,000 from the Initial Account Balance.

For trader 1 = -33.3% from Account Balance
While for Trader2 = -10% from Account Balance

Conclusion:
Even if for some traders looks more profitable to use higher Leverage, due to their small accounts, if their trades work against them, this will ruin their account. Ofcourse they might be tempted to use a high Leverage (smaller Margin) so they can trade a much higher volume.

Lot size

In Forex, we dont use Base currencies for the trade volumes. We use Lots.

1 Lot = 100,000 units (full Lot)
0.1 Lot = 10,000 units (mini-lot)
0.01 Lot = 1,000 units (micro-lot)

In our previous example is obvious that if the trade work against you, and you traded a huge volume, the loss is highly important, as the expected profit.

Trader 1 have 3 potential negative trades until he will ruin entirely his account. While Trader2, can afford 10 trades, for that.

You know what they say: "A rich man is a man who can survive longer, without having anymore income". Same as in trading. It doesn't matter how much you can pull out of a trade, but how many negative trades you can take and still be in the market.

Risk/Reward Ratio

Also known as R:R ratio, it means the ratio between expected profits and potential losses.
I don't recommend a R:R lower than 1:3. That means for any loss you might have, you must take at least (minimum) 3 times more from the profitable trades.

TP = 3 x SL

This isnt a random number. This is related to any strategy statistic.
You all know, that you can't have profitable trades, only. So your strategy statistic can be from 5-9/10 trades in profit:

• min 5/10 since you can have 2 option on any market: buy and sell. So you can have 50-50% to be right on any trade. 
• max 9/10 since you cant be right all the time.

So, in order to reach your profitable trades, you must be able (afford) to take those losses.

Ofcourse, I prefer to use a much more significant statistic for any strategy, like x/100 trades. Because this offer me a better understanding of the strategy on a longer period of time.
Imagine a 9/10 strategy might be less than 90/100 on a longer period of time (and trades).
What if those 10 negative trades will come, in raw, while starting to trade that strategy ?

Well, you must be prepared for that, as well. You need to still be in the market, when those profitable trades will come.

Money Management

I'm sure you all heard about "Money Management Rules". But what is this really means?

Well, you can consider it a "healthy" way to be in the market longer. Or how much negative trades you can take, in the worst case scenario.

For doing that you need to be able to calculate 2 main things: Volume (as no of lots) and Stop Loss (in pips) for your trades.

I wont develop here the calculations behind the mathematical probabilities of a strategy. All you need to know is that you should use these numbers, as beginner:

Max Risk/Trade = 2%
Max Investment = 15%

(take as example our previous exercise for the Trader1)

Example of MM Rules:

Account Balance = $10,000
Max Investment = 15% = $1,500
Risk = 2% = $200
Leverage = 1:100
EURUSD = 1.3025

How many lots can you trade?

1.0 lot = 100,000 EUR => Margin =1%=1,000 EUR =$1,302 (1000 EUR x 1.3025)
0.1 lot = 10,000 EUR => Margin =1%=100 EUR =$130
0.01 lot = 1,000 EUR => Margin =1%=10 EUR =$13,02

Lot size = Max Investment / Margin

Lot size = $1,500 / $1,302 = 1.15 lots (round it to 1.1 lots)

How much pips you can afford to lose ? (Stop Loss)
First we need to find out the pip value.

1 pip = lot size x tick size
( for Direct rates as: EUR/USD, GBP/USD, AUD/USD, NZD/USD )

1 pip = pip = lot size x tick size / current rate
( for Indirect rates as: USD/JPY, USD/CHF, USD/CAD )

1 pip = lot size x tick size x base quote / current rate
( for Cross rates as GBP/JPY, EUR/JPY, AUD/JPY, EUR/GBP, GBP/CHF - where USD is not involved )

Examples by using the standard formula:
EURUSD = 100,000 x 0.0001 = $10
USDCHF = 100,000 x 0.0001 = 10 CHF
USDJPY = 100,000 x 0.01 = 1000 JPY

Then use these results vs your account currency rate, to find the pip value into your account currency! (in our example in USD)

Or use instead the other 2 formulas and then denominate these $ results with your account currency vs USD rate.

E.q 1:
1 pip = lot size x tick size / current rate
( for Indirect rates as: USD/JPY, USD/CHF, USD/CAD)

For a trade of 10,000 USDCHF (0.1 lots):
USDCHF = 0.9290

1 pip = 10,000 (lot size) x 0.0001 (tick size) / 0.9290 (current rate) = $ 1.07


E.q2:
1 pip = lot size x tick size x base quote / current rate
( for Cross rates as GBP/JPY, EUR/JPY, AUD/JPY, EUR/GBP, GBP/CHF

For a trade of 10,000 EURJPY (0.1 lots):
EURJPY = 121.35 and EURUSD = 1.3060

1 pip = 10,000 (lot size) x 0.01 (tick size) x 1.3060 (EUR/USD base quote) / 121.35 (current rate) =  1.07 $

Now, let's get back to our practice example:

Pip Value for 1.0 lot = $10

Pip Value for 0.1 lot = $1

Pip Value for 0.01 lot = $0.1

If the max Risk/trade = 2% = $200 and the pip value = $10

SL = $200/$10 = 20p / 1.0 lots
SL = $200/$1 = 200p / 0.1 lots
SL = $200/$0.1 = 2000p / 0.01 lots

So, in this example you can trade 1.10 lots.  The SL= 20p at this volume.

But if you want to use need a higher SL level for a trade, while keeping the same Money Management Rules, you can use smaller lot size ( mini-lots/micro-lots).

Eq1:
If you want to open 3 trades with 0.1 mini-lots/trade:
200p/3= 66p/trade (for each one of these 3x0.1 lots trades)

Eq2:
If you want to open 5 trades with 0.01 micro-lots/trade:
2000p/5= 400p/trade (for each one of these 5x0.01 lots trades)

But what if you found a potential trade and you know the SL level ? How many lots can you use for that trade ? ( this will be the only one opened trade, until is closed)

Lets say the SL = 90p needed for that trade.
This is how you can calculate the lot size according to your Money Management Rules:

Lot Size = Risk Amount* (in $) / Number of Pips x Pip Value
orLot size = (Capital x Risk%) / (Stop Loss in Pips x Pip Value)
*After each trade calculate the Risk Amount again or at least 1 time/week

Lot size = $200/90p x $10= $200 / $900 = 0.22 lots (for this trade example)
or
Lot size = ($10,000 x 0.02)/(90p x $10) = $200 / $900 = 0.22 lots = 2.2 mini-lots = 22 micro-lots
(when Actual Account Balance is different, than Initial - we must calculate again the Risk Amount)


Best Regards,
^^_Lord_Ice_^^

10.

 +20 pips

14.

-52 pips

17.

-15 pips

- problems on start with add on position, if there is only one it would be much easier to stay objective
- later overtrading not knowing how to end a day on good note while profitable

27.
+9 pips

28.
-55 pips
- totally tilted

31.
+36 pips
-when market is "right" profit is easily obtained

Since I started to learn trading, I heard a lot that "I should keep it simple!". Maybe all of you are familiar with this sentence, but what this really means ?

Based on a healthy trader plan, beginner or not, the right way to start trading a new strategy or system, is to test it on demo for a while, before jumping on the real money account.

So, lets say you are a beginner and learned already the "simple" tools like Trend Lines, Support/Resistances, Channels and Moving Averages. You started by paper trading (history), you tested it on live (but demo) and you decided it's working great. And you started real money account trading with these tools. And it's working. Whats the next step ? Are you gonna stay with this trading style ? From my personal experience, I don't think so.

First of all, it's human nature, to "complicate" things. Second of all, you can't use only the above mentioned tools, forever. Because you will notice is not working all the times. And you will start to wonder why. That is a crucial moment for a beginner trader, because they will jump fast to the  conclusion, that is not working so they will think of changing it completely, with something new and different. Which is wrong, sometimes. Maybe you didn't learn it well, so all you need is to stop trading it on real, go to demo again and don't come back to real, until you will find out what went wrong. Also, you can add other advanced tools to filter your fake signals.

Therefore it doesn't matter if your strategy or system will work or not, you will change/upgrade it, all the time. But the main question is still: How simple you should keep your trading style ?

For those of you that studied my course and/or attended my live classes groups, try to remember that time, when you joined advanced level class. You were starting demo trading for beginners lessons and tools, already, while you were doing paper trading (history) with the intermediate level tools and strategies. Also, when you completed the intermediate, you started to use those intermediate level tools, on live, but still demo. On the next step, you started to use, the advanced tools for paper trading again. But your live trading portfolio already contain beginners and intermediate level tools. And ofcourse, when you finished the advanced level class, you started to use on real, the beginners and intermediate level tools, while you were still practicing demo, the advanced ones.

If you will try to remember your basic charts, from the beginning, you will all notice those tools "looks too simple", for you, now. That is because, many of you are advanced traders right now. And probably some of you, already using the advanced tools, on your real money account.

This is the most logical cycle of learning: getting familiar with the basics, practicing it and using it profitable, in the end.  By working like this, after many years, you will notice a big difference in your trading style, because even advanced tools, are simple for you, today. 

The real problem is when you think, you already reached the advanced level, but you didn't took the right steps and you are using it wrong, even the basic tools. This could happen if you are having a lack of patience in your learning curve.

Simple vs Complex Strategies

By keeping your trading style as simple as can be (efficient), doesn't mean you should stop learning. In trading learning will never stop. It shouldn't. That doesn't mean, that you should try all the possible ideas of all the traders around the web, either. In my point of view it means you should always look for new ways of improving your systems or your trading style. Because you will try to maximize your profits. You want to be more efficient. And since there is no perfect system, you will always try to explain yourself those bad entries signals, exits, etc. This is why we keep the trading journal, right ? Those marks, chart examples and questions, will help us to become better traders, eventually.

Could you ever go back to your previous "simple" tools ? Should you ?

In my way of seeing it, it's not likely to do it. Because when I've decide it to go on real with that tool or system, it means I've tested it for months. So I had a good reason to proceed with it, on the next step: the real trading. Same steps, for upgrading it (adding new tools). So, there's no point for me, to make it simple than that, anymore.

Conclusions

I think this common saying "keep it simple!", is good, mostly for the beginners, due to human nature of complicating things, when they shouldn't. Because in that moment, many think a complicated chart is better. But is not, for them. That's why we say about their charts that looks like "Christmas Trees", when they add tens of oscillators and indicators, that will make them more confused, than helping them. That it is wrong, indeed.

But because some people will remember this sentence, later on, when they reached the advanced level, they will stop learning, thinking "Hey, I should keep it simple!". Which in my opinion is wrong, again. You will never become pro trader like this. You will remain a beginner forever.
(e.q. Remember when you saw my charts, initially ? Remember all you questions about ? How about now, when you already drawing it, almost like me ? Would you stop developing, now ? Would you go back to your "simple" charts, again ?)

Well, ofcourse depends on what do you expect from your trading activity. But don't you ever think, that using only few simple tools, you will have profitable results forever.

Therefore, I think this is a misconception, for most of the traders, beginners or not. In my opinion the right saying should be: "Keep it simple, according to your level!".  And as advanced level trader, don't you ever think "Simple is better!", as long as you know well and you tested properly your "complex" strategy or system.


Best Regards,
^^_Lord_Ice_^^

After reaching a certain level of knowledge, the beginner trader look for a strategy or system, to start his paper trading. Here, in this stage he will take a decision that will haunt him for years. Some people realize it later, some people don't. And they will "run in this circle", for years.

So, this stage can be considered, the first huge mistake, that will change his trading activity for at least a long time, if not forever (Until he will quit trading or keep trying it, but with small results or none). His dilemma is:

Higher Time Frame or Lower Time Frame (Intraday) ?

Due to human nature, most of the people have a lack of patience. In this stage they want to start real trading soon. So they will chose a Intraday strategy for paper trading, then demo and in the end on real trading account. If the beginner would have proper knowledge he would still have to test this strategy for 3-6 months. But again, the lack of patience would make him to consider a shorter period of testing, before starting real trading. This combination of starting Intraday trading, combined with a short period of testing on demo is the most lethal, for the beginners. In my opinion, the fail is close to 100%. ( How many traders, even profitable ones, can say, that they started to have profits from the beginning ? I didn't ! ).

Like I said, the first mistake is choosing Intraday. And this is why I wanted to explain you why, in this article. There is another reason that will make the beginner to choose the Intraday trading (strategy), except his lack of patience for testing. That will be the sellers and all their promo materials. And since the beginners started to learn about trading from their materials, he will be influenced to chose this path.

Lets see...why! And let's take a close look at the real deal of the sellers in this area.


Brokers

As you all know, we can't start trading as a retail trader, unless we are trading using "the third party", the broker services. Also, as you all know, the main income source for the brokers, is the spread.

So, let's do an exercise and see what would be the best deal for a broker:

Let's say he would have a client, that trade on Intraday. Probably will make 10 entries + 10 exits/day at a spread of just 2 pips.

10 x 2p + 10 x 2 pips = 40 pips/client/day/pair

And in 1 month, lets say this client will trade all days, from Monday to Friday:

20 days x 40pips = 800 pips/month/pair

If we will consider this for 1 full lot and aprox $10 for 1 pip...and probably the client will trade many pairs, each day, that must be a good deal...for a broker.

Now, lets see how much will pay a client ( and will earn the broker ), if the client, will trade as a "swing trader" or a trend follower. By trading all month, on HTF, the client will not have more than 10 trades.

10 trades x 4 pips (entry +exit) = 40 pips/month/pair

So an Intraday trader would pay 800pips/month and a Swing Trader would pay...40pips/month (or a Trend Follower on HTF)

Now, what do you think is the best deal for a broker ? An Intraday trader ? Or a HTF trader?

That doesn't mean that a broker want his clients to lose money. They just don't have time for all their clients to learn after the initial contact (phone/e-mail) or to trade HTFs. That broker employee can't go to his boss and say:

"Hey...I've contacted few hundreds of potential clients, this month. They all agree with our services and they will start trading with us...in 6-12 months from now...when they will learn about trading!" If the broker would pay to that employee for 1 year...without having any new clients, he will ruin his business. Also, if they were agree for a monthly commission (from spread mostly), do you think that the broker employee would like to see you doing 10 trades/month, only, when he could have all his clients doing 10 trades/day...?

Imagine a broker that will earn so hard his clients, in months or years, since they practice and start to trade HTF (less profits for the broker) and then, to lose most of them, just because another broker have a new better services. This will ruin the initial example broker business, fast. So he must be able to sign faster the contracts with new clients, even if they will lose most of them in few months (because they'll blow their accounts), since the broker can have more new clients each month.


Introducing Brokers

There are IBs that receive a bonus for opening an account and some don't. But still, for both cases, the broker will pay the IB, a commission from their clients payed spreads.

Usually this commission is around 20- 25% from the payed spread (by the client as trader). So, from those 4 pips/ trade (entry +exit), 1 pip will be the IBs commission. Broker agree to pay this, because that IB, found him a client. The broker would of payed this 1 pip/trade commission to any of his employees.

Now, what do you think is the best deal for a IB since he get a % from the spreads? An Intraday trader ? Or a HTF trader?


Signals Providers

The signals providers charge a monthly fee, for providing to their clients trading signals for their activity. Usually these services fees are around $100-300, for one pair signals or more pairs.

Anyway, lets say you payed $300 and you wait for a signal. Lets say the Signal Provider, wont give you any signal for your payed pair, for...10 days. This could happen, if he would provide you these signals based on HTF analysis. How would you feel to pay a monthly service and to start with 10 days, with no activity ?

Not to mention that this Signal Provider, has the "money back" privacy (as marketing). If they would provide these signals on HTF, they would have tens or hundreds of e-mails/day asking for their payed signals that weren't received yet or money back. Doesn't matter how good are these signals

So, they have to provide you Intraday signals. Because in this way, they can "find" at least few possible entries, starting the first day. If 3 from these "signals" are wrong...they could say: "Hey, but 2 were good! We can't be right all the time! Wait for the next signals!".

They don't care about the quality of their signals. They can always say: "Hey, nobody can be 100% profitable!".  And as long as you receive it daily, you are happier than paying $300 for only 10 signals. And if they'll "ruin" their image...they will start over, under a new "brand" website, ID, etc.

That doesn't mean that a HTF Signal Provider, is good for you. Even if you are profitable with it, you will never know how they do it. So, you'll never learn and you will always be a "client". Not a trader...


EAs/Indicators sellers

Usually the EAs/Indicators are built for Intraday. For HTF are not suited, because you need to keep your trading platform on.

Imagine of keeping your trading computer ON for 2 weeks, just to find few HTF entries using an EA. Is not that comfortable.

Same for a very expensive, Indicator that was built for HFT. You just have to watch it everyday, for hours, hopping to find an entry "confirmation". And it could come for few times/month...


The same situation will be for Strategies Sellers, Trainers and Money Managers (that charge a monthly fee instead a % from profits ) and sometimes even book writers - personal websites with referral links - since all the sellers in this field start their services "portfolio" as a Introducing Broker (for a commissions from spreads), they will  promote Intraday trading. Because is in their best interest to do so.


Conclusions:

As a client, you need to see faster, the results (lack of patience), even if those results are not so good, initially or never.

And instead of promoting HTF (less money for them) for having a bigger % of profitable clients, the sellers prefer to "lose" some clients and replace them with new ones fast, each month.

I'm not saying that everyone will lose money on Intraday. Just, that all the sellers promote it, because Intraday = more money for them. Knowing this, you might wanna think about it, when you want to start you trading activity.

Remember, also, that Intraday "belong" to Institutional Traders ( Trading Companies with with hundred to thousands floor traders, that have way better internet connections than home users and fast news sources - before even posted on newspapers or websites ). You don't want to start your trading carrier here, in this area, as a retail trader (work from your home).

Beginners should start really HTF trading ( ideal Weekly). Then as they'll have better knowledge and experience, they can "lower" the TF. Personally, I found out that W to H1 is the "safest zone" for a retail trader (beginner or advanced one). Specially one that don't want to be +8h/day in front of his computers.


Best Regards,
^^_Lord_Ice_^^