Forex as a Future? | Page 18 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

The Future of Forex? 83 replies

Is the future of a Forex trader secure? 7 replies

Hedging forex for the future 0 replies

Is it possible to forecast future Forex movements? 0 replies

Attachments: Forex as a Future?
Exit Attachments

Forex as a Future?

  • #341
  • Nov 11, 2016 7:16am Nov 11, 2016 7:16am
Quoting lasty
{quote} FX can be a very profitable asset class provided you treat it as an investment.

  1. There is a tremendous amount of scientific evidence published that this is not true. Forex is a negative sum game.
  2. Leveraged forex trading is mostly pure gambling with several rip off layers inbuilt in the trading plattforms of retail forex brokers.
  3. Every participant in this game using leverage and trading without insider knowledge has a mathematical disadvantage in the long run and will lose money.
  4. As a retail forex trader you finance the profits and huge marketing budgets of brokerage firms, the liquidity providers, banks, HFT Algo firms frontrunning your orders and the insiders of relevant political decisions and or insiders in regards to compilation of important economic data or central bank action.

  1. Is it impossible to make a big profit based on luck? No - but you will run of luck for sure at one point in time.
  2. Is it impossible to make consistant profits with a fixed risk / reward ratio over a long period of time? No, but very hard and only with a big enough captial base and no or very little leverage. But in this case I don't consider you a retail forex trader that is aimed at as a potential customer by the highly aggressiv forex retail marketing machine.

Based on that it's all said an done. Retail forex traders with an average captial base of 2500 USD will allways be exploited to the extrems by all other market participants and especially the brokers. Either you get this or you will lose your account. So banning them to lure in new victims makes a lot of sense to the public.

  • #342
  • Nov 16, 2016 4:31am Nov 16, 2016 4:31am
Quoting tarrini65
well, i think different from you . I am a loser since the start of my forex experience, but i know why ...i don't have patience, and i am greedy. If you play it very slow and small you can make 10 percent a year , how many financial instruments can have a return like this? treat it as a business, be wyse and patient, not like me.
This is why forex is interesting like every other side of life. It works differently for people, some win and some lose. Why that happens I don't know, but what I do is that we can always patiently build our carrier and make a living no matter what we are into.
Nothing is easy out there and so is forex. like myself I won't say it has been easy, but it doesn't mean am giving up!
  • #343
  • Nov 16, 2016 7:23am Nov 16, 2016 7:23am
Quoting HudithePfupf
{quote} There is a tremendous amount of scientific evidence published that this is not true. Forex is a negative sum game. Leveraged forex trading is mostly pure gambling with several rip off layers inbuilt in the trading plattforms of retail forex brokers. Every participant in this game using leverage and trading without insider knowledge has a mathematical disadvantage in the long run and will lose money. As a retail forex trader you finance the profits and huge marketing budgets of brokerage firms, the liquidity providers, banks, HFT Algo firms...
Totally wrong IMHO. Market doesn't care you when you buy or sell it is possible that some one looks the order balance or stops but that is not mean it is riggid. Game...
Trade fearless not careless...
  • #344
  • Nov 17, 2016 2:49am Nov 17, 2016 2:49am
Dear mohsinali,

Is the forex market a zero sum game? Does somebody have to lose what I win?
Is the forex market even a negative sum game in the perspective of a retail trader considering that spread and commissions are a risk free profit for brokers and market makers taken out of the forex pot?
Do dealer plugins for forex brokerage platform exist and which firms are likely to use them?
Are there market participants with significant insider information advantages against retailers and do they use their knowledge?
How does the "gamblers ruin" theorem apply to forex trading?

If you find the right answers to these questions you will quit forex trading as a way to achieve risk adjusted, consistant income. The only reason to continue is just for fun and entertainment as a game, in full awareness that you pay to play.

There is a very narrow window to arbitrage the insiders within the manipulation range...but this means:
- no or very little leverage (< 3:1)
- huge capital base to achieve a reasonable profit in absolute terms and to justify the time you invest

Now you compare this to the following facts:
The average retail account is about 2500 USD when it is opened... and very soon smaller after you start trading.
Retail forex brokers provide leverages from 50:1 up to 1000:1

This is the logic behind the fact that 99.9 % of all retailers lose money in the long run.
  • #345
  • Nov 17, 2016 2:51am Nov 17, 2016 2:51am
Quoting lasty
{quote} Pathetic actually. I can understand if they ban gambling all together but to single out FX, well that just idiotic. What they should do is not ban but educate. FX can be a very profitable asset class provided you treat it as an investment.
I fully disagree..... education will only help you to quit or better not to start with trading forex, but certainly not to win.
  • #346
  • Nov 17, 2016 4:16am Nov 17, 2016 4:16am
Quoting HudithePfupf
Dear mohsinali, Is the forex market a zero sum game?.... If you find the right answers to these questions you will quit forex trading as a way to achieve risk adjusted, consistant income...
You are soooooo wrong.... get and educate yourself.... dont allow your biases to limit you....

(no, I am not going to educate yourself, but I give you benefit of doubt, use it or loose it)
  • #347
  • Nov 17, 2016 4:27am Nov 17, 2016 4:27am
Quoting HudithePfupf
{quote}...Either you get this or you will lose your account. So banning them to lure in new victims makes a lot of sense to the public.
That sound like description of property market in any major city. Are you also proposing to ban people to buy/speculate properties to save them?

That sound like description of (commercialized) higher education. Are you also proposing to ban people to enter universities to save them?

That sound like description of insurance industry. Are you also proposing to ban people to insure to save them?

Oh boy, that how this world, taken over by corporations works. I guess it is better to hide in crops... or maybe try to understand the system and take advantage of it?

As I said above... educate yourself...
  • #348
  • Nov 17, 2016 10:06am Nov 17, 2016 10:06am
This discussion needs some more facts and less opinion. who cares if you think it's possible to win or not?
If you make crazy claims then back them up
  • #349
  • Nov 17, 2016 2:59pm Nov 17, 2016 2:59pm
Quoting GibsonL6
Its been 4 years or so since I traded FX, and I don't regret leaving this make believe world for one second. After spending thousands of hours studying/ learning all the ins and outs, I came to the conclusion that the only ones making money are the Brokers and System sellers. With the advent of the internet, retail forex was made available to the general public by brokers who saw an opportunity to tap into a fresh market...a nice easy market where money would come as easy as taking candy from a baby. Then came the system sellers ...another easy...
I totaly agree with you but......there are traders and relatively simple systems that work very well but YOU REALY NEED IRON DISCIPLINE, PATIENCE AND A VERY GOOD MONEY MANAGEMENT. Most of traders lose because they: 1. Oversize the order relatively to their account balance, 2. Overtrading, 3. Lack of patience in following the system. All the traders that lose money try to anticipate the next move and they jump into the trade even before their system is telling them to do.

On the other hand, there are brokers, real brokers, that offer forex futures to trade. Trading Forex CFD's is an OTC business but trading future contracts of forex indicies can be done within an exchange, through CME. Anyway, forex trading was primarily designed for hedging (like options initialy) but eventualy became a new business. For those with a substantial capital (at least 50K-better above 100K) there are different strategies that offer small risk by hedging.

All the best!
  • #350
  • Edited Nov 18, 2016 1:50am Nov 17, 2016 3:14pm | Edited Nov 18, 2016 1:50am
One of the most pitfall of the rookie trader is that he want to make big money in a very short time and also with a small capital, most rookies start with under 5K and they want to make around 30% per month and on the long term this is simply not posible. A normal monthly profit 5 max 10% per month but who want this!!!??? Everybody want 30-50% per month and this is done by taking big risks and this is a sure way to ruin.

Regards!
  • #351
  • Nov 18, 2016 1:49am Nov 18, 2016 1:49am
The biggest delirium in trading is putting the though of expectation of consistency without regard to big picture logical thinking. If a high net worth individual engaged in a casual conversation with a not so endowed less experienced fellow trader begins to rattle off figures that sound extraordinary. The listener usually gets that the seed of over active traders illusionary syndrome. This subliminal deviate thinking seems to stick for many individuals. I've sen this enough times to know it like the numbers along a clocks edge.
Trading is like the high speed bank turns of a race track. The curves are always easy to look at from the safety of a spectators seat. Its what the driver does when he,she enters them at high speed that decides the ultimate fate of successful repetition. Look in the mirror each day and say to yourself. I'm a thinker and I'm a do'er. Hesitation and hindsight are both a blessing and a curse. Focus more on yourself and less to the mechanized process of trading and you will find that consistency we've all been brow beat to achieve is more of a natural process rather than a function of constant fine tuning.
"Look Left Think Right"
  • #352
  • Nov 18, 2016 1:52am Nov 18, 2016 1:52am
This forum contains the biggest bunch of losers (literally) in the history of man.

  • #353
  • Nov 18, 2016 6:05am Nov 18, 2016 6:05am
Lol it has you too and so Its amazing that how you are humiliating and insulting yourself.
  • #354
  • Nov 29, 2016 4:51am Nov 29, 2016 4:51am
My opinion (fact) is that this job is not impossible, but very hard to succeed in. Any other business is also tough as this one. No-one said anything is easy.


EDIT: The OP is a negative person.
  • #355
  • Nov 29, 2016 12:14pm Nov 29, 2016 12:14pm
 
Attached Image (click to enlarge)
Click to Enlarge Name: IMG_20161118_220640_236.jpg Size: 167 KB
Trade fearless not careless...
  • #356
  • Nov 30, 2016 3:34am Nov 30, 2016 3:34am
We are now seeing changes in the Forex trading industry taking place. The sector is becoming much more competitive, regulation is getting stricter and acquisition costs are rising. In the years to come, retail forex traders should see better and better opportunities, liquidity, technology, and pricing.
  • #357
  • Dec 7, 2016 6:30am Dec 7, 2016 6:30am
Quoting pipshaman
One of the most pitfall of the rookie trader is that he want to make big money in a very short time and also with a small capital, most rookies start with under 5K and they want to make around 30% per month and on the long term this is simply not posible. A normal monthly profit 5 max 10% per month but who want this!!!??? Everybody want 30-50% per month and this is done by taking big risks and this is a sure way to ruin. Regards!
Very vital lines. And necessarily you need to expertise 1 or 2 pairs to trade but rookie trade all pairs. Forex trading also require huge time to waste, some real capital to loose before profitable trading rolls out.
Never Gamble Forex
  • #358
  • Dec 7, 2016 10:41am Dec 7, 2016 10:41am
Quoting yesyoucan
{quote} Very vital lines. And necessarily you need to expertise 1 or 2 pairs to trade but rookie trade all pairs. Forex trading also require huge time to waste, some real capital to loose before profitable trading rolls out.
Even 5 to 10% per month is not sustainable over the long-term. If it could be done, we would hear all about it in the news and money would pour into that asset manager. Unfortunately, 5 to 10% a year is more like it for any professional money manager.
The greatest money managers of all time achieved max 50% a year, which is by itself an amazing achievement - but anything beyond that ON A CONSISTENT BASIS - never heard of at least not with interesting sums of money (i.e. $100m or larger).
And yes, there is always the argument that the small retail trader could make much more money, but lets be honest guys - we as retail traders have worse slippage and worse commissions and worse intelligence to deal with than the large guys who do this professionally.
Be happy, if you can beat the market (i.e. S&P 500), since 99% of professionals can't do that over the long-term.
  • #359
  • Dec 7, 2016 11:24am Dec 7, 2016 11:24am
Quoting Custos
{quote} Even 5 to 10% per month is not sustainable over the long-term. If it could be done, we would hear all about it in the news and money would pour into that asset manager. Unfortunately, 5 to 10% a year is more like it for any professional money manager. The greatest money managers of all time achieved max 50% a year, which is by itself an amazing achievement - but anything beyond that ON A CONSISTENT BASIS - never heard of at least not with interesting sums of money (i.e. $100m or larger). And yes, there is always the argument that the small...
Well 5%/month is realistic according to my backtests. It is useful to estimate the ROI yearly.... so let's say 80-100%/year is realistic by risking 3%/trade. 20-25%/year is realistic by risking 1%/trade.

It depends if you are willing to deal with a 30 and even 40% DD. I'm sure those large funds have much lower DD's.
  • #360
  • Dec 7, 2016 11:44am Dec 7, 2016 11:44am
Quoting HeyYou
{quote} Well 5%/month is realistic according to my backtests. It is useful to estimate the ROI yearly.... so let's say 80-100%/year is realistic by risking 3%/trade. 20-25%/year is realistic by risking 1%/trade. It depends if you are willing to deal with a 30 and even 40% DD. I'm sure those large funds have much lower DD's.
Hi HeyYou, backtests are a double-edged sword. It is so easy to do datamining and optimize a system beyond belief. While it may seem realistic, it is vital to look that you developed a system without falling into the trap of datamining. As you probably have noticed you can pull out 100s of systems that look amazing in a backtest and then suddenly something happens - real time performance lags dramatically or even turns negative - that is the result of datamining.
As I don't know you, maybe you already know of those pitfalls, and have taken all the precautions - then congratulations on that. But if not, might be worth reading up on datamining and how to avoid it in system development, so that your systems actually also perform the same in real-time as in your backtest.
And your funds comment: a quick look into the year 2008 and in general into a life-time of a fund reveals a lot about drawdown. 2008 was a black swan event that made most of them lose much more than those 40% DD you are talking about (and they can't realize anywhere near to 80% a year on a consistent basis). Also if you look how long a typical hedge fund lasts - it's on average 7 - 8 years - as the performance either lags behind the market and / or massive drawdowns.
1 trader viewing now