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Trade Against The 90% That Lose Money 15th Nov
Retail traders are notoriously wrong at picking market direction/tops and bottoms. Most retail traders very naturally seem to adopt a counter-trend stance and this offers very accurate signals for individuals looking to trade against this group. This daily report is designed to help traders focus their efforts on higher probability pairs.
So what are the signals?
Strong Short 66% Retail Longs
Short 60% Retail Longs
Long 60% Retail Shorts
Strong Long 66% Retail Shorts
We are looking for 60%+ (Ideally for best opportunities 66%+) of retail traders to be trading either long or short a currency pair, we then look for opportunities to fade (trade against) this group. For example if 72.99% of traders are long the USD/CHF we look for opportunities to short that pair.
The pairs that we feel offer the highest opportunity for success are described in the Strong Short and Strong Long areas.
What’s New Today? No Major shifts in the Retail trader positioning except the EURJPY moving back into the neutral zone.
Provided by Pivotfarm - Click here to learn about Technical Confluence
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by Orly:
"The 95% of retail traders who lose money do so because of poor or inadequate money management"
roger that.
twittering as stocktradr
I have to say that as someone who's been dealing with sentiment for a long time your statements are absolutely wrong.
Retail traders, especially in FX, are not not wrong at picking market direction at all and the main reason most of them lose is because they can't manage risk and find themselves in an uncomfortable situation financially or get a margin call.
We at Currensee also run FX sentiments of tens of thousands of real accounts in real time and we found that the retail traders like to be contrarian to the market and even though they are on the wrong site of the trade most of the time following them and executing according to the sentiment is actually a profitable system in the long term.
-- Asaf.
I am in agreement with your statement 100%, Asaf and thanks to you and Currensee for sharing. The 95% of retail traders who lose money do so because of poor or inadequate money management and it is something that I struggle with every day, especially in markets as volatile as they have been lately.
It is possible to call the direction correctly 100% of the time and still lose money! This is the thing that keeps noobs down...but, I think I can yield a clue as to how you can turn your trading around if this is your problem:
Get rich slowly!
That's it. Take a little out of the middle time after time after time. Be satisfied with your base hits and put away the long bat and save it for Reggie Jackson.
It reminds me of the story, oft told, I am sure, about the Indian prince who challenged the local chess master- an eight-year-old boy- to a match. The boy said that if he wins, the prince would give up a grain of rice, a number squared every day for every square on the chessboard to feed his starving village.
The prince laughed! And he agreed.
Needless to say, the boy cleaned his clock and came back every day for his exponentially increasing grains of rice. The first day, it was a grain of rice. Next day, two; then four; then sixteen and so on and so on. At the 64th turn, the prince's silos were empty and the village had enough rice to eat for a lifetime.
Think about it.
:D
Orly,
From my experience trader either got it or they don't. It's very difficult to teach yourself how to fight your instincts and be able to properly manage money and risk.
I can assure you though that there are plenty of traders that are very good at this, they do represent a very small percentage of less than 0.5% but they make money month over month.
-- Asaf.
Orly,
From my experience trader either got it or they don't. It's very difficult to teach yourself how to fight your instincts and be able to properly manage money and risk.
I can assure you though that there are plenty of traders that are very good at this, they do represent a very small percentage of less than 0.5% but they make money month over month.
-- Asaf.
It is very difficult and a trader must teach herself, or take a copy-cat course to the tune of $40,000 for a "mentor," who may or may not trade your in your style.
Not only that but the family doesn't understand why you would sit there and throw money at the thing when it clearly isn't working. No one will understand why you spend countless hours reading material, poring over charts, developing your own system.
Then, something happens. One day, you just get it. It is an "ah-ha" moment that is refreshing enough to keep you going for another day. That is why I am not shy about posting my methods, which are ridiculously simple. I am also not shy about posting my 4X picks because I know that if I had had someone more knowlegable than I was to explain things and why things work the way they do, I could have been much further along than I am now. Not only that but someone more knowlegable than I am now may say, "Hey, wait a minute..." (And please don't say follow me on twitter. Whatever!)
The main thing, though, is definitely about money-management. It is wonderful to say, "Oh, I made a thousand dollars from that trade." I know that in my future, I will be closing many, many trades of that size many times a week.
In the meantime, I have learned the most valuable lesson is that in order to be able to close thousand-dollar trades, I have to close many, many before that that put $1.98 in my account.
Now, when I close a winning trade for four dollars, I just smile, knowing that two years ago, I would have experienced a margin call and utter defeat on the very same trade.
It makes all the difference.
The journey of a thousand miles begins with the first step.
:D
The story is a fraud, the Prince discovering the 'fraud' would decapitate the boy and his entire village, being a math genius does not help at all if you don't know how to play 'life'
Turns out, the prince was an honourable man, Azannoth.
Besides, it's a fairy tale, okay? For demonstration purposes only?
"Contrarianism" works well for investing in equities.
In 4X, it will get you killed.
Thanks Pivot,
I appreciate the work and like seeing perspective. I've been having trouble understanding what you're implying however (and I'll grant you, I'm slow in the morning when I read this, so please be patient with me....)
The above chart states to short the USD relative to CHF, JPY, and the Canadian Dollar. Is that correct? The argument being contrarian investing against the masses. However in light of the mess happening in Europe, and the dollar strengthening significantly (despite Crazy Benny), you're still advocating a short against the dollar relative to the above currencies (e.g. buy some Yen)? Is this based strictly on the existing trades/orders that exist currently in the FOREX markets?
I'm honestly not trying to question the argument, or baiting anyone. I'm trying to understand what's driving the recommendations (so that I can make my own assessment of the info and choose what to do). I have/do not study currency markets much, but have seen the impact the rate of the dollar has had on my portfolio of late, so am trying to gain a better understanding of the whole affair.
Thanks for the help.