The gold - foreign exchange market is a new market, not only in Vietnam but around the world. However, the simplicity and convenience of participating along with the ability to bring huge profits have made this market grow at breakneck speed. However, this is one of the harshest markets in the world. According to worldwide statistics, in the long run only 5% of traders win, the remaining 95% of traders lose, including 10% of traders. bankrupt because of this market
The gold - foreign exchange market in Vietnam has really developed rapidly in recent years and has attracted many people to join the market with the desire to make money simply, easily and quickly. However, most Vietnamese traders lack the necessary knowledge and experience to win, so after a period of participation, most traders lose heavily, some even lose everything. accumulated assets.
CHAPTER I: THE NATURE OF THE MARKET
The gold - foreign exchange market is a potential investment channel! To win in the market you just need to follow a few simple techniques and principles! There have been people making profits up to 100%/month in this market!!! Find a good system and always follow it and you will become a winner... Perhaps these are the reasons that motivated you to enter the market. However, these are just words from a salesman. You often hear these words from brokers and consultants, not from a seasoned trader. However, from another perspective, they are not people on the same front line as you. They just need you to open an account and trade like crazy and they have money, and whether you win or not is your own business. Do you want to learn fighting from a soldier or a writer who specializes in writing war novels? Do you want to hear real words from a trader who has struggled in the market or from a marketing or sales staff? Do you want to better understand the nature of the market? Do you want to better understand the rigors of the market?
Those are the issues that will be presented below. If you cannot accept these things, it means this market is not suitable for you, and the best advice for this case is not to participate in the market.
I. The gold - foreign exchange market is not a playground for everyone
You've probably heard sayings like "anyone can make money in the markets, as long as they find a good system", throw these ads out of your ears immediately, because the truth is absolute. absolutely different. If there really is only one good method to ensure victory, then surely the descendants of famous traders in history such as Jesse Livermore, Nicolas Darvas, George Soros... will continue to become famous traders. and success. . The truth is that their descendants have not been able to achieve the same results as their ancestors, not even 1/10. Even speculative genius Jesse Livermore went bankrupt 3-4 times in his trading life. Legend George Soros also suffered losses.
During the 2007-09 world financial crisis, a series of famous investment banks, hedge funds... all raced to bankruptcy. Are they lacking smart people? Of course not, these banks and funds have the smartest minds in the world and they pay a lot of money to get these brains. Are they inexperienced? Of course not, these banks and investment funds all have a lot of experience, they have existed for even 100 years in this market. Their experience is something that small individuals like us cannot learn in our entire lives. Are they lacking information? Not so, their access to information is extremely fast, accurate and complete. They know things we all know, even things we don't know. Are they lacking equipment? Certainly not, they invest tons of money in machines, programs, algorithms... things that most of us cannot access in our entire lives. All of the above says one thing: “There is no method or tool that can guarantee victory in the market.”
To be successful in the markets, traders need to have several talents. Here are some basic and necessary abilities of a trader:
1. Must have the ability to explore and learn. To be able to stand firmly in the market, you must constantly learn, constantly improve your knowledge and practice your skills.
2. Must have good self-control. Emotions will greatly affect trading results, so to achieve good trading results, traders must keep their "head hot and heart cold".
3. Unlike what many people think, trading requires the trader's patience rather than agility. Most traders just do one thing and that is wait. When the trend is not clear, wait until it is clear. When the trend is clear, continue to wait until the time to enter is better. , when you have a better entry point, you have to wait for a confirmation signal, and even after entering the order, the trader still has to continue waiting for a signal to exit the market. So if you are an impatient person then trading is not suitable for you.
4. Principles are one of the most important factors that help traders survive in the market. If you cannot follow the essential principles, do not enter the trade.
5. Accept losses. No one can win forever, so to survive, traders must be able to accept mistakes and stop losses. Stop loss is the most important thing a trader needs to do. If you cannot decisively stop losing a losing order, then never enter the market, because you will definitely burn all the money in your account.
II. The nature of the gold - foreign exchange market
“Investing in the gold and foreign exchange market has the potential to bring big profits in a short time. You can earn 20-30 or even 50-100% profit in just 1 month. These are words that you can read or hear a lot from the press and salesmen. However, I will present to you two issues that I have a completely different view from the above statement and similar sentences:
- The market is a war. Trader is a soldier. Most of us enter the market as a speculator, not an investor.
- The profits you earn are not as important as the profits you keep. And the profit you keep is often much lower than the amount you win.
Now we will work on each problem 1 at a time.
I. The market is a war.
The gold - foreign exchange market is a zerosum-game market. So what is zerosum-game market?
Zero is zero. Sum is the total number of the addition problem. Zero-sum game means that the total amount of money in the market does not change, grow, or shrink. Similar to a casino, the money players bring into the casino itself does not generate money and does not shrink, money only transfers back and forth between players in the casino. So when you win money it means someone had to lose that money for you, and conversely when you lose money it means someone has won that money for you. So when you join the market, it means you join a war. To win, you need to fight to overcome the rest of the market.
According to world statistics, in the long run only 5% of traders participating in the FX market win, the remaining 95% of traders mostly lose, of which 10% of traders go bankrupt because of FX. (bankrupt). Perhaps many people will not agree with me on this, they will retort that if 95% of traders lose money, why are people still flocking to join the market? I see there are 3 main reasons:
1. Greed! It is the greed to make a lot of money, quickly and easily that has motivated many people to join the market. They dream of hundreds of millions, billions, tens of billions, even hundreds of billions that will be available in just a few seconds and with a few mouse clicks or a few phone calls.
2. Addicted! Addiction here is gambling addiction, each of us has more or less gambling in our blood. The gold - FX market is as addictive as gambling. Have you seen many people buy lottery tickets all their lives without winning but still buy them every day? Gamblers lose everything but still come to the casino, even when they have no money left, they still come just to watch people gamble. You will see the same thing on the gold floors, where many people, even though they have lost tons of money, still climb the floor every day, sometimes without buying or selling anything, just going up to watch the price increase or decrease. And for some people, if for 1 or a few days they do not monitor the market or look at the chart, they will feel uncomfortable.
3. Don't accept losses! Accepting failure is one of the most difficult things to do in life, and it is even more difficult to do in trading. So you will see many people participating in the market for many years, losing most of their money, but continuing to trade day after day in the hope of overcoming their losses. However, when a trader participates with the mentality of taking losses, their judgment is significantly reduced compared to normal, so most of these people will continue to create more losses. They will continue until trading not only takes all their money, but also takes all their strength and health of their family, and until they are completely exhausted in every aspect, then they stop.
I don't mean to scare you, I just want you to clearly see the fierceness in the market and prepare yourself mentally before joining the battle. Prepare carefully before participating, a soldier's mistake in the battlefield will cost him his life, a trader's mistake in the market will cost him money. To be able to return in glorious victory, soldiers must learn to keep their lives. To win in the market, traders must learn to hold their money tightly.
II. The first condition for success is still present.
You may hear many people advertising the ability to make profits of 20-30% or even 50-100%/month. Inexperienced people will certainly be very impressed with these numbers. However, I will tell you a secret: "These numbers are meaningless". Why do I say it's meaningless? Don't we enter the market just because of these profit numbers? I'm not saying the above advertisements are not true. However, there is a saying "More risk, more return". So high profit rates often come with correspondingly high risks, and you will see people shouting about making 50-100%/month burn through their accounts faster than you think. Most of these people cannot achieve good trading results in the long run, they can earn 20-30 or even 50-100%/month, but if you consider a longer period of time like several years, most will result in losses, even total loss. If you go to the casino and play Sic Bo, if you bet only once, no matter whether you win or lose, then your probability of winning will be 50%. However, if you play 1,000 times or 10,000 times, your probability of winning is almost zero. Casinos also know this very well, that's why they have the saying "don't be afraid of customers winning money, just be afraid of winning money." "customers don't come back", as long as customers come back many more times, they will eventually return more money than they paid.
Maybe you won't believe this, but it's true. When winning money, everyone increases their trading volume, but when they have bad luck and lose continuously, most people still do not reduce their trading volume, so when they lose, they return the money they previously won, instead of losing money. Also pay with your own money.
For example: A method has 70% accuracy, but if you lose the first 30 orders and then win 70 orders, the accuracy rate is still 70%. But try to think, does your account still have anything left when you lose 30 orders in a row? Or even if you win the first 70 orders, what will you do after that? You will increase your trading volume, and the next 30 losing orders will also make your account close to 0, the accuracy rate is still 70%, your account result will also go to zero. Not to mention achieving 50% accuracy is not something everyone can do, let alone 70%. Many people will oppose me on this point of view, but let's leave it at that, we will discuss the probability of winning or losing later in the book.
So how many % you can earn in a month will not be as important as how many % you can keep per year or several years. We don't just live in the market for just a few months, our goal is to find long-term profits in the market. And to be able to survive in the market for a long time, the first important thing that traders need to pay attention to is how to hold on to their money tightly. Before you make money, learn how to minimize your losses.
Here there are only 2 important things you need to pay attention to:
1. High profits always come with high risks. However, your goal is to survive in the market for a long time, so try to minimize risk as much as possible.
2. Profits earned are not as important as profits kept. Just one mistake, you will pay back more than the money you win, learn to hold your money tightly, profits will come by themselves.
III.Trading or Gambling?
Gambling is a zero-sum game, so is the gold and foreign exchange market. Gambling has casinos, trading has brokers. Gambling has card memorization, psychological guessing, probability... trading also has probability, chart patterns, fundamental analysis, psychological analysis, news analysis... Gambling has other players, trading also has many Many traders participate in gambling with you. Gambling is addictive, trading is also addictive. Gambling makes people lose their fortunes, trading also causes many traders to fall into poverty.…
Trading has 90% similarities with gambling, however if you only trade exactly like gambling then you will definitely lose. That is the law of probability, that is what helps the casino business to always be a very profitable industry even though they have to spend mountains of money on real estate investment, decoration, personnel... Similarly in FX, That's what helps FX brokers make mountains of profits. Casinos are bookmakers in the gambling market, and FX brokers and gold floors are bookmakers in the gold and FX markets.
So where is the 10% difference between trading and gambling? The answer lies in “the ability to influence the probability of the game”. When you play the game of throwing dice randomly, the probability of each throw being even or odd is 50%. If you roll 10,000 times, the number of even and odd numbers will be about the same 5,000 times. No matter how good you are at calculating probability, the chance of getting an even or odd number is still 50%. And in gambling, if you bet on even or odd naturally, most bookies will pay you 100% of the amount you bet if you win. This means your profit/risk ratio is 1/1, if you win you will get 1 coin, and if you lose you will lose 1 coin. This profit rate is set by the house, you must accept and there is no way to change this rate, this rate is set by the house, of course they will always make this rate beneficial. for them.
In trading there is a little difference. In trading, you can rely on market analysis to increase the probability of success of each transaction. In trading, you can wait for better trading times and combine it with the use of stop loss and profit taget estimates to increase the profit/risk ratio. Remember carefully, this is the most important difference between trading and gambling, and also the most important key point that you can take advantage of to win in trading. If you do not take advantage of this difference, you are just a gambler in the market.
“The gambler mostly loses, the house always wins.” Always remember this. If you trade purely like gambling, you will definitely lose.
Recommendation
Foreign currency trading involves risks and may not be suitable for everyone. Before deciding to participate in the foreign currency market, carefully consider your goals, trading experience and possible risks. Investors may lose part or all of the investment amount, so investors should only invest with an amount within their ability to pay. Investors need to be aware of all possible risks or consult experts if they have any doubts before participating in transactions.
The gold - foreign exchange market in Vietnam has really developed rapidly in recent years and has attracted many people to join the market with the desire to make money simply, easily and quickly. However, most Vietnamese traders lack the necessary knowledge and experience to win, so after a period of participation, most traders lose heavily, some even lose everything. accumulated assets.
CHAPTER I: THE NATURE OF THE MARKET
The gold - foreign exchange market is a potential investment channel! To win in the market you just need to follow a few simple techniques and principles! There have been people making profits up to 100%/month in this market!!! Find a good system and always follow it and you will become a winner... Perhaps these are the reasons that motivated you to enter the market. However, these are just words from a salesman. You often hear these words from brokers and consultants, not from a seasoned trader. However, from another perspective, they are not people on the same front line as you. They just need you to open an account and trade like crazy and they have money, and whether you win or not is your own business. Do you want to learn fighting from a soldier or a writer who specializes in writing war novels? Do you want to hear real words from a trader who has struggled in the market or from a marketing or sales staff? Do you want to better understand the nature of the market? Do you want to better understand the rigors of the market?
Those are the issues that will be presented below. If you cannot accept these things, it means this market is not suitable for you, and the best advice for this case is not to participate in the market.
I. The gold - foreign exchange market is not a playground for everyone
You've probably heard sayings like "anyone can make money in the markets, as long as they find a good system", throw these ads out of your ears immediately, because the truth is absolute. absolutely different. If there really is only one good method to ensure victory, then surely the descendants of famous traders in history such as Jesse Livermore, Nicolas Darvas, George Soros... will continue to become famous traders. and success. . The truth is that their descendants have not been able to achieve the same results as their ancestors, not even 1/10. Even speculative genius Jesse Livermore went bankrupt 3-4 times in his trading life. Legend George Soros also suffered losses.
During the 2007-09 world financial crisis, a series of famous investment banks, hedge funds... all raced to bankruptcy. Are they lacking smart people? Of course not, these banks and funds have the smartest minds in the world and they pay a lot of money to get these brains. Are they inexperienced? Of course not, these banks and investment funds all have a lot of experience, they have existed for even 100 years in this market. Their experience is something that small individuals like us cannot learn in our entire lives. Are they lacking information? Not so, their access to information is extremely fast, accurate and complete. They know things we all know, even things we don't know. Are they lacking equipment? Certainly not, they invest tons of money in machines, programs, algorithms... things that most of us cannot access in our entire lives. All of the above says one thing: “There is no method or tool that can guarantee victory in the market.”
To be successful in the markets, traders need to have several talents. Here are some basic and necessary abilities of a trader:
1. Must have the ability to explore and learn. To be able to stand firmly in the market, you must constantly learn, constantly improve your knowledge and practice your skills.
2. Must have good self-control. Emotions will greatly affect trading results, so to achieve good trading results, traders must keep their "head hot and heart cold".
3. Unlike what many people think, trading requires the trader's patience rather than agility. Most traders just do one thing and that is wait. When the trend is not clear, wait until it is clear. When the trend is clear, continue to wait until the time to enter is better. , when you have a better entry point, you have to wait for a confirmation signal, and even after entering the order, the trader still has to continue waiting for a signal to exit the market. So if you are an impatient person then trading is not suitable for you.
4. Principles are one of the most important factors that help traders survive in the market. If you cannot follow the essential principles, do not enter the trade.
5. Accept losses. No one can win forever, so to survive, traders must be able to accept mistakes and stop losses. Stop loss is the most important thing a trader needs to do. If you cannot decisively stop losing a losing order, then never enter the market, because you will definitely burn all the money in your account.
II. The nature of the gold - foreign exchange market
“Investing in the gold and foreign exchange market has the potential to bring big profits in a short time. You can earn 20-30 or even 50-100% profit in just 1 month. These are words that you can read or hear a lot from the press and salesmen. However, I will present to you two issues that I have a completely different view from the above statement and similar sentences:
- The market is a war. Trader is a soldier. Most of us enter the market as a speculator, not an investor.
- The profits you earn are not as important as the profits you keep. And the profit you keep is often much lower than the amount you win.
Now we will work on each problem 1 at a time.
I. The market is a war.
The gold - foreign exchange market is a zerosum-game market. So what is zerosum-game market?
Zero is zero. Sum is the total number of the addition problem. Zero-sum game means that the total amount of money in the market does not change, grow, or shrink. Similar to a casino, the money players bring into the casino itself does not generate money and does not shrink, money only transfers back and forth between players in the casino. So when you win money it means someone had to lose that money for you, and conversely when you lose money it means someone has won that money for you. So when you join the market, it means you join a war. To win, you need to fight to overcome the rest of the market.
According to world statistics, in the long run only 5% of traders participating in the FX market win, the remaining 95% of traders mostly lose, of which 10% of traders go bankrupt because of FX. (bankrupt). Perhaps many people will not agree with me on this, they will retort that if 95% of traders lose money, why are people still flocking to join the market? I see there are 3 main reasons:
1. Greed! It is the greed to make a lot of money, quickly and easily that has motivated many people to join the market. They dream of hundreds of millions, billions, tens of billions, even hundreds of billions that will be available in just a few seconds and with a few mouse clicks or a few phone calls.
2. Addicted! Addiction here is gambling addiction, each of us has more or less gambling in our blood. The gold - FX market is as addictive as gambling. Have you seen many people buy lottery tickets all their lives without winning but still buy them every day? Gamblers lose everything but still come to the casino, even when they have no money left, they still come just to watch people gamble. You will see the same thing on the gold floors, where many people, even though they have lost tons of money, still climb the floor every day, sometimes without buying or selling anything, just going up to watch the price increase or decrease. And for some people, if for 1 or a few days they do not monitor the market or look at the chart, they will feel uncomfortable.
3. Don't accept losses! Accepting failure is one of the most difficult things to do in life, and it is even more difficult to do in trading. So you will see many people participating in the market for many years, losing most of their money, but continuing to trade day after day in the hope of overcoming their losses. However, when a trader participates with the mentality of taking losses, their judgment is significantly reduced compared to normal, so most of these people will continue to create more losses. They will continue until trading not only takes all their money, but also takes all their strength and health of their family, and until they are completely exhausted in every aspect, then they stop.
I don't mean to scare you, I just want you to clearly see the fierceness in the market and prepare yourself mentally before joining the battle. Prepare carefully before participating, a soldier's mistake in the battlefield will cost him his life, a trader's mistake in the market will cost him money. To be able to return in glorious victory, soldiers must learn to keep their lives. To win in the market, traders must learn to hold their money tightly.
II. The first condition for success is still present.
You may hear many people advertising the ability to make profits of 20-30% or even 50-100%/month. Inexperienced people will certainly be very impressed with these numbers. However, I will tell you a secret: "These numbers are meaningless". Why do I say it's meaningless? Don't we enter the market just because of these profit numbers? I'm not saying the above advertisements are not true. However, there is a saying "More risk, more return". So high profit rates often come with correspondingly high risks, and you will see people shouting about making 50-100%/month burn through their accounts faster than you think. Most of these people cannot achieve good trading results in the long run, they can earn 20-30 or even 50-100%/month, but if you consider a longer period of time like several years, most will result in losses, even total loss. If you go to the casino and play Sic Bo, if you bet only once, no matter whether you win or lose, then your probability of winning will be 50%. However, if you play 1,000 times or 10,000 times, your probability of winning is almost zero. Casinos also know this very well, that's why they have the saying "don't be afraid of customers winning money, just be afraid of winning money." "customers don't come back", as long as customers come back many more times, they will eventually return more money than they paid.
Maybe you won't believe this, but it's true. When winning money, everyone increases their trading volume, but when they have bad luck and lose continuously, most people still do not reduce their trading volume, so when they lose, they return the money they previously won, instead of losing money. Also pay with your own money.
For example: A method has 70% accuracy, but if you lose the first 30 orders and then win 70 orders, the accuracy rate is still 70%. But try to think, does your account still have anything left when you lose 30 orders in a row? Or even if you win the first 70 orders, what will you do after that? You will increase your trading volume, and the next 30 losing orders will also make your account close to 0, the accuracy rate is still 70%, your account result will also go to zero. Not to mention achieving 50% accuracy is not something everyone can do, let alone 70%. Many people will oppose me on this point of view, but let's leave it at that, we will discuss the probability of winning or losing later in the book.
So how many % you can earn in a month will not be as important as how many % you can keep per year or several years. We don't just live in the market for just a few months, our goal is to find long-term profits in the market. And to be able to survive in the market for a long time, the first important thing that traders need to pay attention to is how to hold on to their money tightly. Before you make money, learn how to minimize your losses.
Here there are only 2 important things you need to pay attention to:
1. High profits always come with high risks. However, your goal is to survive in the market for a long time, so try to minimize risk as much as possible.
2. Profits earned are not as important as profits kept. Just one mistake, you will pay back more than the money you win, learn to hold your money tightly, profits will come by themselves.
III.Trading or Gambling?
Gambling is a zero-sum game, so is the gold and foreign exchange market. Gambling has casinos, trading has brokers. Gambling has card memorization, psychological guessing, probability... trading also has probability, chart patterns, fundamental analysis, psychological analysis, news analysis... Gambling has other players, trading also has many Many traders participate in gambling with you. Gambling is addictive, trading is also addictive. Gambling makes people lose their fortunes, trading also causes many traders to fall into poverty.…
Trading has 90% similarities with gambling, however if you only trade exactly like gambling then you will definitely lose. That is the law of probability, that is what helps the casino business to always be a very profitable industry even though they have to spend mountains of money on real estate investment, decoration, personnel... Similarly in FX, That's what helps FX brokers make mountains of profits. Casinos are bookmakers in the gambling market, and FX brokers and gold floors are bookmakers in the gold and FX markets.
So where is the 10% difference between trading and gambling? The answer lies in “the ability to influence the probability of the game”. When you play the game of throwing dice randomly, the probability of each throw being even or odd is 50%. If you roll 10,000 times, the number of even and odd numbers will be about the same 5,000 times. No matter how good you are at calculating probability, the chance of getting an even or odd number is still 50%. And in gambling, if you bet on even or odd naturally, most bookies will pay you 100% of the amount you bet if you win. This means your profit/risk ratio is 1/1, if you win you will get 1 coin, and if you lose you will lose 1 coin. This profit rate is set by the house, you must accept and there is no way to change this rate, this rate is set by the house, of course they will always make this rate beneficial. for them.
In trading there is a little difference. In trading, you can rely on market analysis to increase the probability of success of each transaction. In trading, you can wait for better trading times and combine it with the use of stop loss and profit taget estimates to increase the profit/risk ratio. Remember carefully, this is the most important difference between trading and gambling, and also the most important key point that you can take advantage of to win in trading. If you do not take advantage of this difference, you are just a gambler in the market.
“The gambler mostly loses, the house always wins.” Always remember this. If you trade purely like gambling, you will definitely lose.
Recommendation
Foreign currency trading involves risks and may not be suitable for everyone. Before deciding to participate in the foreign currency market, carefully consider your goals, trading experience and possible risks. Investors may lose part or all of the investment amount, so investors should only invest with an amount within their ability to pay. Investors need to be aware of all possible risks or consult experts if they have any doubts before participating in transactions.
