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-   -   Are We All Gambling? (https://www.forexfactory.com/showthread.php?t=876969)

broketrader Mar 10, 2019 1:34pm | Post# 221

Until the day you find a system with a good win rate and a good risk reward ratio leading you to an almost zero risk of ruin you (we) will be gambling but without knowing it !

Take care and trade well !

EcoTrader Mar 10, 2019 1:40pm | Post# 222

{quote} He trade information. Confidential information as all big sharks. Anyway if fundamentals are the base why AUD passed from new safe currency to weak in one month? All is relative. Sometimes fundamentals helps but normally is a chess play for manipulate market. Last months gbp movements are a good example. For any reason people call Brexit drama or the new world circus...

Several reasons

1] Australian economy is affected by China's economy and China has been slowing down.
2] Trade tensions between China and USA were on the rocks at the time.
3] The Australian economy is struggling, the housing market has crashed sending consumer sentiment to the toilet. Most economic data out of Australia has been deteriorating


In regards to UK. It's all about Brexit, no manipulation.


What is your evidence for market manipulation? Outside of a few isolated incidents where billions in fines have been paid out, it doesn't happen. Economic releases are tightly controlled, news from reputable sources isn't manipulated, news isn't known beforehand, and finally the market is so large that no single entry can move price easily and would ultimately lose money if doing so.

Husky77 Mar 10, 2019 2:10pm | Post# 223

Until the day you find a system with a good win rate and a good risk reward ratio leading you to an almost zero risk of ruin you (we) will be gambling but without knowing it ! Take care and trade well !
agree
so i'm not gambling
have a good week ahead everyone
out from the subject.
cheer up!

Soyo24 Mar 10, 2019 2:12pm | Post# 224

Until the day you find a system with a good win rate and a good risk reward ratio leading you to an almost zero risk of ruin you (we) will be gambling but without knowing it ! Take care and trade well !
Life is a gamble...there is no guarantees in life.

EcoTrader Mar 10, 2019 2:19pm | Post# 225

Risk reward ratio is another smoke and mirrors. By having a set target you are committing to price reaching it. Well price moves according to sentiment which ebbs and flows and nobody can know where peice is going to reach, its yet another aspect of probability so how can a trader state they look at a specific risk reward ratio when they have no idea if the reward side of it will be met. Sure you can say that you trail a stop but then you are no longer committed to a defined risk reward, in fact you are stating you don't by using a trailing stop. Then there's the matter of how far do you trail it, too close and your out, too far and your out. Either way it doesn't conform to a risk reward ratio.

The sooner traders realise risk reward is as mythical as unicorns,the sooner they can adopt a better strategy.

Treeny Mar 10, 2019 2:34pm | Post# 226

Without an edge you are gambling, yes

broketrader Mar 10, 2019 2:41pm | Post# 227

... The sooner traders realise risk reward is as mythical as unicorns,the sooner they can adopt a better strategy.
Just note that risk/reward is not a strategy in itself, it indeed confirms that the strategy you use to enter exit provides good returns or not, but even if not, you can still be profitable, guess how ? By having a good Win ratio.

What counts at the end ? Having a profitable account over the long term, and how do you achieve that ? By having a good strategy, edge, trading technique, unicorns on your chart, anything you want. But at the end, when you calculate your win ratio and your risk reward, either you have one of both which is very high or still better, both at a good level, or you are just crashing your account.

CannonScout Mar 10, 2019 3:09pm | Post# 228

Yes. Unless we are 'investing' over long periods of time, (IOW providing capital to an underlying business) than yes; we are engaging in speculative/ gambling behaviour.

Even though we can reduce and maintain the odds via indicators, set-ups and probabilities, we are essentially risking capital for an return based on probability and other factors.

If we listen to a lot a professional gamblers, such as poker players, they often give great insight into how to trade effectively. This relationship proves that trading is a form of gambling and that the skills (within reason) can be interchangeable among different gambling classes.

EcoTrader Mar 10, 2019 3:13pm | Post# 229

{quote} Just note that risk/reward is not a strategy in itself, it indeed confirms that the strategy you use to enter exit provides good returns or not, but even if not, you can still be profitable, guess how ? By having a good Win ratio. What counts at the end ? Having a profitable account over the long term, and how do you achieve that ? By having a good strategy, edge, trading technique, unicorns on your chart, anything you want. But at the end, when you calculate your win ratio and your risk-reward, either you have one of both which is very...
It isn't a strategy however considered one by so many retail traders. To overcome statistical win-loss ratios they feel that risk reward ensures they swallow enough losses to produce a profit. The problem is you cannot know beforehand where price will likely get stuck, how long it might get stuck there for, and if the price will then retrace enough to take you out. So you can calculate a win-loss ratio but you have no guarantees it will be met so the calculation is flawed and ultimately inaccurate. Can you show your risk-reward has been met with a statistically meaningful number.

My point is traders would have far greater overall success if they utilised a dynamic strategy of identifying when to get out instead of a statistical threshold.

broketrader Mar 10, 2019 4:12pm | Post# 230

{quote} It isn't a strategy however considered one by so many retail traders. To overcome statistical win-loss ratios they feel that risk reward ensures they swallow enough losses to produce a profit. The problem is you cannot know beforehand where price will likely get stuck, how long it might get stuck there for, and if the price will then retrace enough to take you out. So you can calculate a win-loss ratio but you have no guarantees it will be met so the calculation is flawed and ultimately inaccurate. Can you show your risk-reward has been...
If it's considered by some as a strategy, then sorry for them, they are wrong.

I understand your point, of course that nobody knows in advance what the price will do.

My point is that when you trade, you make assumptions, or your system tell you where to enter, and then you make assumptions about where you would like the price to go for a win but also where it might go for a loss. Then assuming that you will respect those levels, you know exactly what is the risk and the potential reward on that trade and I don't see what is wrong with that. Of course, again, as you state, you don't know before hand that your target will be reached so if that's the case more often than not, then, this is just telling you that something is wrong with the strategy where maybe your targets are too far or your stops too tight.

So, it's the accuracy or the quality of your trading system that will dictate your Win Ratio not the other way around! And from that, you will need a minimal statistical win rate to know if your system is viable long term, and these are just mathematics, not my opinion.

Then is up to everyone to know that before hand or maybe implicitly or on the contrary just navigate blindly.

lutzk Mar 10, 2019 4:49pm | Post# 231

So, it's the accuracy or the quality of your trading system that will dictate your Win Ratio not the other way around! And from that, you will need a minimal statistical win rate to know if your system is viable long term, and these are just mathematics, not my opinion.

As long as you are navigating the markets with a system it is not gambling. Even if your system turns out to be a consistent looser. Its like driving, if you close your eyes on the highway its a gamble. Despite that most people would not consider driving a gample per se. Uncontrolled behaviour will be considered as gambling, not only when it comes to trading.

EcoTrader Mar 10, 2019 5:28pm | Post# 232

{quote} If it's considered by some as a strategy, then sorry for them, they are wrong. I understand your point, of course that nobody knows in advance what the price will do. My point is that when you trade, you make assumptions, or your system tell you where to enter, and then you make assumptions about where you would like the price to go for a win but also where it might go for a loss. Then assuming that you will respect those levels, you know exactly what is the risk and the potential reward on that trade and I don't see what is wrong with that....
Assumption is snake oil when it comes to this market. Making an assumption where price will go and accepting it doesn't translate into knowing exactly what your risk reward is. All that gives you is a self sense of conviction which does nothing to produce the best possible outcome. Here is an example that will play out time and time again for every trader. You buy at 1.1234 with a stop at 1.1215 and a target at 1.1265. Price goes to 11241 then drops back down to hit your stop.

Is the problem the system or the trade management? According to your logic it's the accuracy and quality of the system. When you look at it, you had an entry and price moved in your favour but then stopped you out. So accuracy is there but quality not. This would ultimately lead to a trader adding filters or other complications as a method of producing better quality trades. However, there was nothing wrong with the original process besides this ridiculous self imposed thresholds.

Now here is another example, a different trader, me if you will since this is how I trade. Same hypothetical signal and entry with same stop although it is a worst case scenarios only. A dynamic trade management process that takes its cue from the market would have exited the trade at or near 1.1241 for a profit. So now instead of viewing it as a low quality trade, its is instead a case of thats all the market offered. So this trader is not applying self imposed thresholds that ultimately leads to all sorts of issues including system changes. Maybe the next trade will offer more, maybe less. Even on cases where the market would have stopped a trade, this dynamic approach adds value. Taking cues from the market, a trade can be exited for a small profit or much smaller exit than a stop would have otherwise have given.

See where I am going with this and why risk reward is flawed. I reckon traders as a whole would be vastly more profitable and successful if they dropped risk reward and used a dynamic approach instead.

broketrader Mar 10, 2019 5:54pm | Post# 233

{quote} Assumption is snake oil when it comes to this market. Making an assumption where price will go and accepting it doesn't translate into knowing exactly what your risk reward is. All that gives you is a self sense of conviction which does nothing to produce the best possible outcome. Here is an example that will play out time and time again for every trader. You buy at 1.1234 with a stop at 1.1215 and a target at 1.1265. Price goes to 11241 then drops back down to hit your stop. Is the problem the system or the trade management? According...
It seems that you want to have the last word on it, it's okay and no worries.
Take care and trade well.

EcoTrader Mar 10, 2019 5:56pm | Post# 234

{quote} It seems that you want to have the last word on it, it's okay and no worries. Take care and trade well.
I thought we having a conversation here? Sorry I cant read minds and didn't know you wanted to end it there. Maybe let people know you dont want to discuss further before being cocky about it.

Arturke Mar 10, 2019 9:29pm | Post# 235

Personality thinking it's impossible beat the market it doesn't matter you have millions in account so yeah we all probably gambling in this game. Unless you have investment bank and you actually making money transaction or floating between other banks.

TradeMinim Mar 11, 2019 2:07am | Post# 236

We are taking calculate risk never gambling when you follow the rules of your system. Follow rules <<< 80% why most traders start to gamble!

rahuljoshi23 Mar 11, 2019 2:29am | Post# 237

To win in the long run, you need to operate like a forex trading casino rather than gambling in forex. When forex is gambling or not, it depends on the forex trader rather than the asset class itself.

hellsbells Mar 25, 2019 6:30pm | Post# 238

There's an amazing race horse in Australia called WINX, who just won her 32nd consecutive race. Her last odds were 1.06 and someone bet $350k to get a payout of $17k. Now I can understand someone placing a MASSIVE trade in forex, but it's not a simple you win / you lose all ( well it needn't be) . I know gamblers go big on plenty of sports, but wow. In comparison most traders would be unhappy with only a RR of 1:1 let alone a LOT less than that

davidvi Mar 26, 2019 4:54pm | Post# 239

what mindset do you have here??and what type of question of this...???
Am sure he is asking if forex is gambling or not?

Simply-Me Jun 22, 2019 7:15am | Post# 240

wow really enlightening topic...


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