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My name is Luca Pulito. I have decided to start sharing my trading experience and try and help people who are still searching their trading system in Forex, or people who are constanty losing money but still beleive there is a way to gain a steady profit from Forex.

This blog is for people with a basic experience in trading. I will not teach you the basics, but I can teach you how to build your trading system that works. No miraclesyou will not become rich in a day, you will not stop working and live in an island trading 1 hour a day (we all dreamt about that after some good trades, did we not??). But perhaps you will be capable to stop losing money first, and secondly to enjoy a SLOW TRADING experience with some steady profit which can eventually turn into a nice pension fund or a small income.

How much can you earn with my system? From 5% to 8% a year cumulated. Are you searching for more? Then look elsewhere but bear in mind that it is really difficult to earn more than this in a steady way. You might come back to this blog after a couple of years and after a couple of wiped out trading accounts! If you think that some of the best managed low risk investment funds earn less than this you should think that probably it is not easy to beat them. But I want you to understand this yourself; I will not try and convince you. Who knows, maybe I am wrong and it is really easy.

Can you lose money? Of course you can like in EVERY investment, but it is very unlikely especially in the medium and long run, and you will discover how.

Do you need a long investment horizon? From medium to long. This system if for people who want to invest for at least 3 years, but you will see the real benefit in the long run.

Will you become rich? NO

Will you stop working and live out of trading? NO

Will you pay a lot of commission to banks and earn 0 or break even at best? NO

Do you need a big initial capital? How much should you invest?  Not that much. 10.000 EUR or Dollar will work and you will have fun and profit. Do you want to start with 1.000 Dollar and make a million in a year you are in the wrong place, search elsewhere. Do you only have 1.000 and want to trade? Dont do that, keep your money safe. If you have more than 10.000 it will be better. The best would be to invest from 50.000 to 100.000 or more but I recommend to invest in my SLOW FOREX TRADING SYSTEM not more than 10% to 15 % of your total capital. Invest the rest elsewhere and remember to differentiate your investment portfolio. You will find many good books on how to do this so I will not try and teach you this.

Do you need a lot of trading experience? Not that much. You need to know the basics, you need to have a good and cheap trading platform .This is the real trick in Forex. In the end this a conditio sine qua non (prerequisite for the non-Latin speaker) to make some profit.

Before sharing some of my learnings I would like to share a bit of my trading history and the different trading phases. Why? Because I would like to help people that went through the same steps and are still willing to try. If you did not have the same experiences that I had because you are still in an initial phase or because you were more lucky or simply because you are a better trader and know how to make money than this blog will not really help you. At least not now, maybe in the future.

My history and the different trading phases.

I have started to trade around 15 years ago. I started as a Forex trading advisor after a master degree in economics and econometrics at University Ca Foscari in Venice. Then I changed work and did a normal work for the rest of my life but I have been constantly trading during the evening and spare time.

During my 15 years of trading experience I have read probably more than 100 books of trading strategies, I have studied and unfortunately tried tens of trading systems.

I have gone through the usual path of most of the traders:

Phase 1:  learn the basics resistance, support, take profit, stop loss, trends etc etc. Try out some trades. I won sometimes but just because I was lucky. In general I was losing money

Phase 2:  start thinking that there are some path that repeat themselves over and over again. The graphical analysis is not pure fantasybut how to use it at my favour? I was still losing money and very confused. I was always behind the movements and the trades. I had the impression that someone else was making many with my trades, what a young and naïf trader I was:)  Sounds familiar?

Phase 3:  start trying out the indicatorsand more indicatorsand fill my trading platform with all of themI could barely see the price candle. But still it did not work. Strange because it seemed those indicator made a lot of senseand I had the feeling that I was using very sophisticated statistical formulas to win against my opponents out there. But I was still behind the movements. I discovered there was a trend when it was almost finished. I entered always when the movements were almost over, I used to get the last 10% of it and get stopped. Still I had the impression that someone else was making money with my trades:) But when I was looking at the graphs it looked simplethere must be a way

Phase 4: start looking for trading systems. I have tried and tested many with demo account and simple test with past data. Some workedsome did notmost of them worked in a test environment (especially with past datawonder why. ) but when you try real they dont work anymore. You lose too much in commissions and the banks/brokers usually stops you when you do not want to be stopped or let you in the trade at the wrong price. Still sounds familiar? Then read further.

Phase 5: start thinking that there must be a way but it is not what you find in the books. But which is the way? Who is interested in teaching the usual methodologies? Who is making money with this business? For sure it was not meI had to start thinking with my own brain.

Phase 6: start thinking the opposite of what is written everywhere. Start breaking rules, even the most obvious, start thinking simple. You will read in my blog some rules that you will not believe at first because they are against the basics of risk management. You can believe me or not, you can still follow the orthodox methodologies. It is up to you

Phase 7: building and testing my SLOW TRADING FOREX SYSTEM. Eventually I have stopped losing money. And guess what, I even earn money from Forex. My dream came true but it is very different from what I though at the very beginning of my trading history; Unfortunately I still have to work to earn my money, I do not live in an island surfing and drinking all day. At least for now! But there might be a Phase 8…never stop dreaming!

So, its now time to answer the question of the title of this post. Why most of the traders lose money?

Why is it important to know why many traders lose money? And why I start with this topic as the first one? If you understand why you lose money there are some chances to break even or to win one day.

First of all most of the trader lose money because they are in one of the phases from 1 to 6.

Secondly the traders lose money because someone else is making money and push the majority of retail traders to lose. Who are those nasty ones?

• Banks and brokers. Have you noticed how many trading platform there are out there? And how many new every day? And they are all there to help you and make money…hey…wait a second…are they really spending money and making big commercial campaigns and creating expensive platforms for me. Really? Is this a sort of ethical capitalism? Or trading socialism? What is this. Try to think simple, try to understand how they make money and try to defend yourself or play a similar game. Banks and brokers make money in two ways:

• Commissions/spread. for each trade they get money. The more you trade the more they earn. The higher the number of trades and the higher the amount of the trade the more money they make. Each time you buy or sell, and each time you take profit or get stopped, banks and brokers make a commission with the spread regardless if you win or lose. They buy or sell at the interbank rate and they sell to you or buy from you at the retail price. The bigger the spread the more money they make. Banks or broker pay less than 1 pip commision on the USD/EUR pair. All the rest is commision that they charge you.
• Be your trading counterpart. this is a bit nastier than the commission because it is not transparent and not written anywhere. Basically any broker acts as the counterpart of your trade with the advantage that they know your strategy. They know your entry point, they know your stop loss and take profit. If the broker is not transparent or extremely honest it is very simple to make money with your trades. You will lose and they will win. They will stop you very often, they will create a small spike in the price of your platform and get you out of the trade with a loss. And remember, for one who loses there is one who wins. I will not spend much time in this topic because it is rather complex and I would not like to create a conspiracy theory here, but think about it. And look at your trades in the past. How many times were you stopped with the price price reaching your level for half a second because of a spike? And how many times your take-profit did not kick in even though the price was there…then the price traced back and your stop loss magically kicked in very efficiently? You were very unlucky…or  perhaps your broker is not very transparent and he is making money against you? Now you could think, hey wait a second Luca know-it-all, they cannot create a spike for me ONLY. No, in fact they do not create it for you ONLY but for a group of “you ” that trade following the same rules, trading the same trends, the same supports and resistances with a stop-loss 15 pips above or below. It hurts right? And you feel a bit stupid right? It was so obvious right? Yes it is obvious. Remember what I wrote before. Start thinking with your brain. In any shop you enter you know that the seller wants to make money, why when you trade you do not think that the broker wants to make money or rip you off? When you go to a market in Morocco you bargain like crazy assuming the Moroccan seller wants to rip you off then when you trade you think that the rich brokers are honest and transparent?

• Professional investors. they usually make money, or sometimes they lose. But you cannot play against them, you can only play with them or try and understand how they think. In many cases the professional investors are also the brokers, then see the points above. You have two enemies in one! Professional investors either use very sophisticated trading systems which make a lot of operations in a day and they make money because they have near to 0 spread or they look at fundamentals and try to enter the trend before it starts. They create the big support and resistance area and they generate the trends…and they go out when retail traders are entering. They usually get 70% of the trend and they let the rest to retailers who buy when they sell or viceversa and usually lose money. This is life my friend…it is like playing soccer against Messi…forget it and try to be on their side.

• So called advisors or trading teachers. those kind of people are usually not capable to make money with trading and they start teaching or creating services and trading systems to make money. I could be one of those, it will be up to you to understand if I am one of the many trying to steal some of your money or not. However there is a portion of those people that offer good services and help retail investors, and those deserve a part of your profit (as long as you have a profit).

With your tools and money you are a nobody in this market full of sharks, so stop thinking that you are smarter than anyone else.

Retail traders are a bunch of cows utilized by brokers and professional investors to make money.

Sorry to be brutal and direct but this is the sad truth. If you understand this then you will have more chances to win one day. Now the question is, are you a cow? I am sure you know the answer by now. Do you make money? If not then you are a cow, it is as simple as that.

Talk to you soon traders.

Your sincerelly, Luca Pulito