Well, I don't quite agree with the first post either. If the forex were completely random, no one could could make a living at the forex, regularly making profits that exceed their losses. The spread would kill the "edge."

But the forex doesn't work that way. It's not completely random. You can absolutely count on the fact that sooner or later a currency pair will trend either up or down.

One way to beat the forex is to randomly take a position (buy or sell) and wait for the next trend to develop. Even better, try to detect the beginning of a trend and make your move. If it then goes the wrong way, close the position (you could use a stop loss, a manual trade command, or program logic in an Expert Advisor). Your objective is to limit your losses.

If it goes the right way, hang in there until the trend is over. The objective is to maximize your profits.

This "trend following" strategy will work if you can:

1. Detect when there is no trend. In that case, don't trade. You need to know when the price is ranging horizontally on your chart.

2. Detect when the price breaks out of it's ranging, hopefully starting a trend.

3. Detect if the price is going "the wrong way" for your position.

4. Know when the trend is over (it starts to reverse).

If you can figure out how to do the above four things, you have a profitable strategy. I believe I have done this, but I am still testing. So far, so good.

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Success is more perspiration than inspiration . . .

Doesn't point four contradict point six. How can you square having low risk to reward ratios with wide stops?

I'll throw one in...

Even if one could put on a position and not pay a spread or commission (free trade), most would still lose.

How do you like them apples?

MM

Good post. Don't try and beat Forex.....go with it and take what it gives. The trend can be our friend.

Hell I'll throw in one more...

The thread is titled "Beating the Forex market". I think this is a bad choice of words. Many traders, myself included, think this way for years and keep themselves running around in circles. A perfect example is our good old buddy Dan (God bless him). Most of his threads are systems that are attempting to "mathematically trap price". It's either grid based, or martingale, and sometimes a combination of the two. He is trying to "beat the market", like it's a personal vendetta or something. I did it for years too, and guess what, I was chasing my own tail and getting nowhere fast.

The bottom line is that you don't have to beat the market... you have to conquer yourself. Most of the members of TSD (including most newbs) have seen plenty of methods that have an edge to them. Yet they still fail... they will only succeed when they conquer the self.

MM

I agree with you mostly, Mr. Marketz, but personally, I'd put a different spin on it. Yes, making money in the forex has a lot to do with YOU, the trader.

From my perspective, it's spiritual battle because it involves spiritual elements.

1. Faith: You've got to have faith that your strategy is valid and worth sticking to. And when you lose a trade, you've got to have faith that you'll recover. You've got to have faith not to "meddle" with your strategy midstream. If it's good, it'll work. That's all there is to it!
2. Courage: You've got to have courage to put your hard-earned money on the line without getting all stressed out.
3. Hope: You've got to hope for the best. If you lose hope, you're done!
4. A sense of destiny: This comes from God. It's another way of saying that you've been directed into this activity. It has purpose, and you're supposed to be doing it. That's divine guidance. Without that, you might think something like "fate" is against you, and you could get paranoid.
5. Peace: You've got to have peace about your wins and losses. Get philosophical about them. They're "just the way it is," in a sense. God is at work here, because He is testing how you respond to trials and giving you patience.

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Success is more perspiration than inspiration . . .

Great points!

Is there anything tougher though? damn i hate to lose. my worst enemy is my own pride. Too often My ego places trades by account can't cash.

Yeah...I struggle with it. Today, I'm losing. Yesterday I was winning. Maybe tomorrow I will win again. You can't be sure. How do you live with it?

That's like life itself. You don't know what's coming. So you've got to believe that everything is under God's control and that He cares about you.

If you believe that, losing can be OK too.

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Success is more perspiration than inspiration . . .

I think the following Aerosmith lyric just about says it all:


"Dream On"
I know what nobody knows
Where it comes and where it goes
I know its everybody's sin
You got to lose to know how to win


Sorry guys just had to cheese out for a minute