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Day Trading Systems

At one time, floor traders had an advantage over the average investor as they got price information quicker than the retail investor. Today, this advantage no longer applies. Price data is available to everyone, in any corner of the globe with the click of a mouse. The availability of instant price data has leveled the playing field.   

Day trading is a way, to quickly wipe out your equity and doesn’t work.

Before we go into more detail why, you may wonder why you see so many forex day trading systems that have such great track records. The reason is they are simply made up and simulated in hindsight. See a day trading track record that makes money and you will normally see the disclaimer below or similar one:

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

The vendors, who sell these systems, know they are never going to work in real time and are simply looking to make money, from na?ve or greedy investors, who don’t realize the implications of the warning - or don’t read it in the first place.

The reason forex day trading doesn’t work is simple – to win you need to trade the odds and this means using support resistance and chart ranges in the daily period to execute trading signals.

The problem is - volatility in daily periods is random, prices can and do go anywhere. Support and resistance levels therefore cannot be used to give you a trading edge; you can never get the odds on your side and you will lose. 

Day trading sounds low risk in theory - but in practice is a very high risk way to trade. Sure, you keep your losses small however, you haven’t got the odds on your side, so you are going to take a lot of them. As volatility is random in daily time frames, you will have far more losses than profits and the only time you will win is when you’re lucky ( and even day traders get lucky) - but your luck won’t last forever. Even if you are lucky enough to get a profit, day trading systems by there very nature cut them quickly!

Any successful forex trading strategy, is based upon the following well worn wisdom:

Run your profits to cover your inevitable losses.

What do day traders do? Cut losses and profits quickly! If you use a forex day trading system you are on borrowed time in terms of how long it takes to wipe out your equity. Never base a currency trading system on day trading logic - the logic doesn’t work.

Another extension of forex day trading is forex scalping which we will discuss in the next section of the website.

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