A Forex Trader Speaks His Mind

February 25, 2006 by Trader Rich

I’m posting an email I received from a fellow participant of Raghee Horner’s webinars today. He has been utilizing Raghee’s methods for the last year and goes into the successes and failures he has had with them. Keep in mind that he is a beaten down trader who started out with $30,000 and now has $3000 left. I don’t necessarily agree with everything he says. I don’t think because 1 person is unsuccessful at something that no one else has a shot. One of his final sentences is "Do not think you’re going to realize your dreams by day trading." I don’t believe this and won’t believe this. I feel like his story will be beneficial:

I would say her setups happen quite a bit if you scan all the pairs. I am not good at position trading or sitting on trades, so I found it really hard to utilize the large time frames. I like to be in and out, a day trader. Her system is like any system, it gives you a method for entries and exits. Each entry has 50% chance of moving in your direction and her method gives you a slight edge or helps you gain a higher probability of being on the winning side. No trading system is consistently profitable, your either on the winning side or your not. The key is to get in when your system tells you to, act on your systems signals, utilize stops or get out as soon as the trade tells you it’s not going in your direction.

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I am a member of the Peter Bain course as well.

My feelings on Raghee’s system are as follows:

Her system is basic and easy

Her system in all reality is based off of basic support and resistance for momentum trades

The 34ema wave for swing trades works probably about 60% of the time, you must exit immediately if it does not

I utilize the 15 minute chart because I want to be in and out

I do watch the other time frames

I basically trade support and resistance breaks just like her on any chart and I trade bounces of the wave

I communicate with another trader that trade with her methods and they net between 40,60,80 on each day that has volatility. I do not have that kind of success.

For anyone out there that is new and contemplating trying this game I will share my story….

I lost my job after 21 years of service. I refused to go back to corporate America and all the politics of that profession, so I dived into learning how to trade. My interest began when I used to work in the trading pits at the Chicago Board of Trade as a runner then phone clerk. So….. I planned on becoming a trader. I had $30,000 to play with. I was bent on educating myself fully and spending the money to do so. I had a very successful past so I figured all I had to do was apply myself to this and I would have a new career. I read Raghee’s book and I purchased her Traders Package CD training set for $2,500.00. I studied what seemed like 24/7 for about 5 months. I also read both Market Wizards books and both Mark Douglas Books as well. Mark Douglas’s books are based on trading psychology and they have answered every reason why I have not been successful. I’m reading Mark’s first book The Disciplined Trader for the 4th time. I also utilize NLP on a daily basis.

I have studied, studied and studied. My $30,000.00 account is now $3,000.00.

Trading is simply this…..

Do not trade if you are trading with scared money

If you care deeply about the money your trading with you will lose

Successful traders have drained their account two or three times, which forced them to learn about the discipline requirements

Successful traders have almost zero emotions

If you trade and you find yourself a bundle of nerves, perspiring or on edge you will lose

Successful traders are relaxed and usually learned how to trade through once being a professional trader at a brokerage firm, where their emotions were minimal because they were not trading with their own money.

I’ve met a lot of people that trade all over the world. I have not met one that is a successful trader

I firmly believe that the market makers (brokers) intentionally set up day traders and go after their stops

I do not recommend day trading to anyone

Day trading can inflict huge emotional and psychological damage to a person

Trading is 70% psychological, 10% money management and 5% mechanical trading methods. Any system will work if you do not care about money and you have discipline and money management skills

You have a 50% chance of being on the winning side of a trade. Manage it properly when your on the right side and you’ll make a profit. If your greedy or dealing with scared money you will lose an entire weeks profit because you did not adhere to a stop just once.

I truly think that I can be successful at trading but it will take another year and my capital is gone. It takes at least two years to learn how to trade emotion free, at least that’s what I’ve read

I did not over leverage. I made over three-hundred trades last year and I won more trades than I lost. The psychological, discipline, and money management parts of this business is what ate up my capital. The people that sell trading systems do not elaborate much on these very important aspects because they are looking to sell you their system.

I utilize FXCM as my broker

I have utilized the Raghee automated tools, they are ok but they slowed down my system, not worth the $200.00pr/month

I am still trading with the small amount of money I have left. Even with all the money I lost I still have a problem being disciplined enough to be successful at this game. I thought I would be able to do this because of my business background and success associated with business. I’m very organized and disciplined. Trading is the first thing that ever defeated me.

The lure of day trading, the life style and the possible dollars associated with success sucks a lot of people into this game. They say only 5% succeed at it and I can tell you they are probably correct.

Do not day trade unless you don’t care about the money. Raghee’s methods work like any other method but her methods are geared more towards long term position traders. In other words if you make a trade on a 60 minute chart you will need to sit on that trade for many hours before it makes money. I’ve sat on trades on the four hour charts for more than 24 hours watching them lose 30-40 pips then turn back in my favor, not reach a profit target then turn back into a loser…. Pretty tough on the emotions. This is why I have chosen to utilize smaller time frames like the 15 minute chart. I need to get in and out. The Peter Bain methods targets 20 pips per day with 30 pip stops. I see many of his trades initially be profitable, go back almost hit your stop and take hours to reach their profit target. My point is that this game takes an iron gut with discipline that you nor I have learned or experienced in our normal lives.

I’m sure that anyone reading this is saying….. We’ll ok, that’s his story but I can do this because I’m ambitious, intelligent, and successful. Get ready for the ride of your life. I persisted on being a day trader I do recommend Peter Bain. He does a daily analysis that is very educational each day. He also has a great library. But again don’t expect miracles. The Raghee methods are for longer term traders and the larger time frames gave huge risk associated with them. The smaller time frames may have one or two setups per day and provide smaller profit target 10-20 pips, if you can sit on your hands and wait for them….tough game!

Raghee has not returned one of my e-mails or voicemails. Raghee.com is ran or managed by a marketing firm in California. Their mission is to sell!

As I mentioned I did purchase her Traders Package for $2,500.00. I’m selling it for $1,500.00 if anyone is interested. Her book of charts is included as well. You can get additional information on her Traders Package at Raghee.com

I hope my comments enlighted some of you….. Better yet I hope that I saved you some capital. Unfortunately I know I’m placing a damper on your dreams but I’m telling you what they don’t. I apologize about raining on anyone’s parade, dreams or vision. Do not think you’re going to realize your dreams by day trading. I hope I saved you all your capital.

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