What can happen playing the HIGH RISK game of foreign currency futures....!

Hi Dien

I've been lurking here for awhile now; I must
commend you on your fine board. I find all
the posts highly informative..was surprised
to log on this morning and find that you are
doing an article on investing..something of
which I have a keen interest.

I currently trade options primarily because
of the leverage and supposedly limited risk.

may I kindly offer an opinion? one that hopefully
will save those considering becoming day-traders
from making mistakes that
could cause them have many sleepless nights.

many traders rely soley on indicators, be it
technical analysis, astronomy, elliott wave
etc..these tools work well except when they don't!!
it's when they don't work that the
biggest losses occur..

most of the popular indicators are widely known,
the techniques are used in software that will
automatically trigger a buy/sell order for you..
all you have to do is follow through..
again these too work well except when they don't!!

why is this? I have a theory and of course, I
could be wrong..but anyway here goes..

Our trader is trying to make money by taking money
from professionals who in turn are trying to take
his/her money. The professional has massive
tools by which he can measure every move made
against him..he also has all the technical tools
that the trader uses. He has massive funds at his
disposal to squash you if he so chooses.

Technology makes it a lot easier for one to become
a trader, but it also puts trader at a disadvantage in that
now the professionals have an immediate picture
of every traders position..ie
they know where all the stops are..you might on
occasion develop a severe case of whiplash from
watching him take all the stops out..oops you lose

I would compare being a daytrader to being in a
game of poker where another player knows the hands
of everyone at the table..

A good poker player(aka professional) tries to
get ALL the money on the table before he makes
his play..thus sometimes he'll let you win a hand.

then why be a trader, you wonder..

the rewards of being on the RIGHT side of a trade
can be huge,--imagine being able to profit 187,000
from a 10,000 investment in a few hrs as you
related about your friend trading futures.

unbelievable but quite possible.. On the other
hand I've read where close to 90% of daytraders
lose their socks within 30 days. having 100,000
leverage for as little as 3,000 is pretty heady
stuff.. just keep in mind that you could just as
easily lose 100,000.

Let's hope that we can all stay in that 10% that
still have our heads above water. I think the
only way however, is to remain vigilant & always
stay on top of one's game..you must stay abreast
of everything that's happening around you in
order to maintain an edge, always be aware of the
other players at the table. and lastly you gotta
know when to hold em and know when to fold em..

good trading

Carol