Day Trading - a Fantastic Way to Lose Your Money Quickly

Day trading is simply one of the best ways to lose your money and the logic is simply stupid. However across the net, you see huge amounts of day trading systems claiming they can make you profits - but there not quite telling the truth, check this point and you will understand why.

Because they have never been traded!

The track record is normally a made up simulation and accompanied by a disclaimer such as the one below: "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".

So there you have the answer! You can get the previous closing prices and simply make up a track record and of course, if you know the closing prices it's not difficult to make paper profits - a child could do it. If you want to make money in the market you don't have the luxury of knowing the closing prices and it's a lot more difficult.

The fact is most of the day trading systems sold are by marketing companies, it's a good story and the mug traders falls for it. The vendor gets a nice profit, from a trading system sale and the trader gets the loss.

So why doesn't day trading work? Well think about it: Millions of traders all with different motivations and governed by greed and fear, all contribute to a final price and their not logical. You cannot hope to predict what this vast diverse group will do in just a few hours or less - its total nonsense.

Of course this means that you cannot use support and resistance levels as all volatility in short time frames is totally random and you cannot get the odds on your side. You would have as much luck flipping a coin. Furthermore, day trading breaks the cardinal rule of trading - run your profits and cut your losses.

Sure a day trader has small losses (and lots of them!) but he will get lucky now and again and win - but does he run his profit? Of course not, he banks it at the end of the day. So profits never cover losses and even lucky traders luck runs out and he loses. The biggest myth of day trading is that it works - it doesn't. Longer term you will lose and if you don't believe me - try and find a forex day trading system, with a real time track record, of gains over the longer term. Just one word of warning - get ready for a long and fruitless search.

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