LOS ANGELES (MarketWatch) — Japanese stocks traded sharply lower late Friday, as major banks saw their shares hit by possible haircuts on loans to troubled utility Tokyo Electric Power Co. . Less then half an hour from the close of trade, the Nikkei Stock Average was down 1.2% at 9,602.54, while the Topix fell 1.6% to 835.95. Japan’s Chief Cabinet Secretary Yukio Edano said Tepco’s creditors should make efforts to ease the debt burden on the operator of the crippled Fukushima Daiichi nuclear plant before the government offers its financial assistance, according to Kyodo News. Shares of Mitsubishi UFJ Financial Group Inc. fell 3.1%, while Mizuho Financial Group Inc. lost 3.7%, and Sumitomo Mitsui Financial Group Inc. dropped 4.2%. Shares of Tepco tumbled 5.6%. Meanwhile, a weakening of crude-oil prices sent Inpex Corp. down 4.4%, and Japan Petroleum Exploration Co. lower by 3.9%.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

View full post on Business Stories

Having been a forex trader for 25 years it amuses me when I see writers defend day trading. They say it really can make money! – Of course they have no track record to back it up just empty words. Fact is you are guaranteed to lose in day trading for one simple reason:

All Movements in Short Time Frames Are Random

Trillions of dollars trade hands each day and million of trader’s trade, all with different objectives and opinions and to say that you can predict what they do in a few hours or a day, is ridiculous. You can’t.

Volatility takes prices anywhere in a day and support and resistance levels are meaningless, so you would have the same success rate flipping a coin.

It’s absolutely impossible to get the odds on your side – PERIOD

This is of course why you NEVER see any of the vendors selling these systems give you a real time track record – Why?

Because they don’t dare trade it!

They would rather write some enticing copy and appeal to the greed and naivety of traders and make their money selling you the system – they win you lose – period.

But I have seen a track record you may say and yes will have, but it’s NOT real.

If you check the disclaimer on it you will see there all hypothetical!

What does that mean?

It means done in hindsight knowing the closing prices!

Now who can’t do that it’s not exactly hard.

If we all knew tomorrows price today we would all be millionaires but we don’t – and neither do we know what will happen tomorrow, so there not worth the paper their written on.

Day trading is a good story but the logic doesn’t add up and the biggest lie about day trading is you can make money at it longer term.

If you could you would see a track record or the vendor would shut up and trade it himself and not need your few hundred dollars.

If you want to win

Appreciate that trading is an odds game and to trade the odds you need to trade over longer periods ,where the data is valid and you can have a chance of getting the odds on your side.

Finally

Don’t day trade, get real and trade with the odds on your side.

Forex day trading and success are a total contradiction in terms – day traders don’t make money. If you want to prove this, just ask anyone selling a day trading system for a real track record – you won’t get one. Why? Let’s take a look.

The Odds

If you want to trade and win you need to be able to take calculated risks when the odds are in your favour and you cannot do this in day trading, as you have no reliable data.

Consider this:

Countless millions of traders all with different opinions trade trillions of dollars per day and to say that you can measure market movement in just a few hours or a day is ridiculous – you can’t.

Prices can and do go anywhere in a day and support and resistance levels are meaningless.

You may as well flip a coin it will be just as effective.

FACT – If you dont have relaible data you will lose over time its 100% certain – PERIOD

BUT I SEE GREAT DAY TRADING RECORDS ALL THE TIME!

Yes you do, but look at the track record and it will say:

“Hypothetical” and you will get a disclaimer.

In case you have never read one – it basically says that the track record is done knowing the closing prices!

Well that’s hard!

Let’s see if I knew tomorrow’s price in advance would I make a lot of money – of course I would. However, you don’t have the luxury of knowing the closing price when you trade though and you will lose.

Claims with No Proof to Back Them Up

I have always maintained that these hypothetical track records should be banned – There of no use at all.

Vendors use them to dupe people into buying forex day trading systems and normally throw in some outrageous headlines as well that never have any facts to back them up.

The vendor wins You Lose

The vendor’s don’t trade these systems (as they know they have no chance of winning) so they sell them to you take your money and you trade and lose.

The Myth & Reality of Forex Day Trading

The myth of making money in forex day trading is perhaps the biggest myth in currency trading – it’s actually a guaranteed way to lose and if you don’t believe me try and find someone who has made money at it.

Get ready for a long search!

Day trading systems, everywhere I look I see them on the internet. They offer huge profits with little or no risk but the fact is day trading simply loses money.

Ask any e-book seller for a track record to support their claims that their day trading system makes money and you will normally be met with a deafening silence.

They can’t produce one, because day trading is doomed to failure.

In theory, day trading sounds exciting and profitable:

Hopping in and out the market, taking a few pips here and there and overtime your day trading will make you huge profits with low risk.

This however is not the reality for the following reasons.

1. Currency price trends

Currencies are subject to supply and demand and are a reflection of the underlying health of a countries economy.

If you look at any price chart you will see that over the longer term trends can last for weeks, months or even years.

Shorter term moves tend to be random.

2. The shorter the data the less reliable it is

Let’s take an insurance company when they calculate your life insurance premium.

Ask yourself this question:

How much data do they use?

Do they calculate premiums based upon when say 10 people?

Of course they don’t.

They use hundreds of thousands or more, as the more people they use the more reliable the data is for their calculation.

It’s the same in currency trading:

You can’t anticipate what is going to happen in a day because you simply don’t have reliable data.

It’s common sense really.

Let’s look at another problem.

3. Volatility

Consider a snapshot day in currency trading

Trillions of dollars are traded – that’s a lot of money!

Traders are all trading for different reasons and it is literally impossible to calculate what volatility or price movement will be in a specific day.

Day traders make the mistake of thinking they can.

Stops take them out the market when they least expect it, as volatility rears its ugly head.

Day trading creates risk

Day traders like to talk about restricting risk, but they actually create it for themselves, by trading with stops that are to close guaranteeing they will lose.

On the other hand, they restrict their profits.

The idea is to take profits quickly and move on.

Let’s look at the day trading equation:

High chance of being stopped out + never run profits = loses

The way of course to make money in forex trading is:

Run your profits to cover your inevitable losses.

This is a fundamental rule of trading!

The acid test

Finally, day traders remind me of the old Burger King advert.

When they were looking at McDonalds burgers and insinuating they had less beef than theirs.

“WHERE’S THE BEEF?”

Was the memorable phrase and to be fair McDonalds burgers, at least they had some!

Ask a day trader:

“WHERE’S THE PROFIT?”

And you won’t find any!

Thinking about it

That e-book I was going to buy offering me huge profits for just $99.00 – Might have a Big Mac and fries instead its better value and I get change to.