That heading caught your attention. I do actually think that the fairer sex can be better traders than men for many reasons - but thats not what I wanted to discuss. Instead I just want to share some of my own opinions on various Forex related topics - including many of the links and comments that have come to light in the Forex Street chat room.
The first one is learning this trade or craft - ie to learn how to trade Forex profitably. Like anything in life - its takes time, training and effort etc. There is an excellent video about how it can take up to 10,000 hours to get there and to be fully competent. That is a long time and although many are competent within 2 years - the normal time for a serious retail trader is 5-10 years.
Think about it - in one year working at forex watching the charts and studying and learning- if you spent 40 hrs a week for 47 weeks ( allowing for holidays etc ) that would be only 1880 hours. So if you are only part time and work say 15 hours a week on Forex - it will take you really over 12 years to have completed your 10,000 hours. Just back testing and looking at 30 years of past data - can help - but you are kidding yourself if you think that really counts.- especially with whats happened in the last 3 years and how the forex market as changed - and will change even more again.
However - I will say it is easier to learn now - because many of the past lies, unscupulous brokers and con artist myths have been exposed and therefore I think it is easier to access and learn through proper training quicker than it was when I started in 2003 / 4.
My next myth put out is connected to trading methods and stop sizes etc. I have been asked count less time in the chat room - why is your daily target so low - and why are you happy with a 10 or 15 pip profitable trade - instead of aiming for a 200 pip trade??
I cannot due justice to my answer in the chat room - but here I will try and explain more. Orginally before I started my business life - I obtained Honours Degree in Economics and then trained to become an Accountant. My accountancy back ground lead me into a successful business career - prior to finding Forex trading . As we know Economics is not black and white - but Accountancy certainly is. Basic Accounting shows you have to earn more than you spend and in a normal job you are paid by the Hour. - so if you work say 50 hours a week - you will earn more than 30 hours a week.
Therefore if you put say 2% of your capital in a trade and you are after say 4or 5% return - you want that ideally to be completed within ideally 30 minutes - not 2 days. Thats a waste of time effort and money. This is why all the big players are HF trading - because the accountants have proved to them its the quickest way to make money.
Therefore for me a 15pip target with a 5 pip hidden stop - or normal traders say a 20 pip stop with a 50 pip target at 2% capital is far better than a 250 pip target with 100 pip stop and same 2% stake.
The main reasons are that the first trade can happen in under 15 minutes - when you know what you are doing - the next one can take say 2 hrs and then the final one with the 100 pip stop takes anything from 1 - 3+ days - inefficient and time consuming . In fact some traders actually think it is easier to get 250 pips than 15 pips !!!! - Can you believe it - do they ever look at a chart ??
I appreciate on smaller funds and less time available the reasons to longer term trade - but any one serious should start doing some simple figures and work out their hourly or daily returns are.
Stops are needed ( unless you have a valid alternative) but this is another myth - The market makers and the forex scammers want you to have then large - ie over 50 pips and ideally 75 to 125 pips - because then you dont lose so much - and yes when you do - you lose more. Its just time inefficient and who wants to spend 2-5 hrs in a trade not working? - not me in day trading.
Please dont think I am wanting all traders to become short term with 10 pip stops and 25-30 pip targets with 70% + success rates and doing 5 + trades a day.. If they were experienced enough to do it with 2% on each trade and compounded every month they would be very successful.
Next myth - losing - Which is the best alternative - To lose 2% of your capital in a 15 pip stop in 30 minutes or to lose the same 2% in 100 pip stop after say 5 hours ????
There both losses- nobody likes it - but part of trading - but the first one is time efficient and enables you to do another 2 -4 successful trades - whilst the other one is "psychoing"you out and taking your mind away from your next trade.
So - get your mindset right - lose - you are bound to - but lose quickly and move on . The extra spread of 2- 4 pips paying to get back in a trade is still cheaper than having your stop 20 pips bigger - and still losing.
Finally short term trading done properly is far more time efficient - than putting your trades on and walking away and then getting your results after you have been asleep.. Nobody in the industry would say that - because it destroys another myth of getting rich whilst you are doing nothing.
So ideally do both.
Look forward to the comments both good and against - lets explore these and other myths we are all fed.