Hanover replies to PMs

Awesome post H :-)

Thank you Copernicus. You're the first trader I've seen on here yet to speak of exploiting 'anomalies'. It's like most of the traders on here haven't spent more than a few hours a month looking at charts. Bless you sir... And I'm glad to know you're at least profitable.

Some harsher realities...

Short-term price movement IS random. EVERY academic study ever done on the subject confirms this. If you deny it, then you're the one who is delusional.
Now, there are some SCAMMERS here who want to give newbies false hopes in order to SELL their useless indicators. I won't mention names , but YOU KNOW WHO YOU ARE.

Did you even read the very first post of the thread? I'd strongly suggest doing so. Then go begin your journey. At the very least read the entire thread. Then go read the entirety of a few more threads. There are an incredible amount of valuable FREE resources available to people who have what it takes and it would be a far better use of your time than posting nonsense about things you just don't understand yet and, I'll be frank, probably won't ever come to understand judging from what you just posted. You're relying on other people's comprehension(and, in this case, lack of comprehension) to support and justify your own inaptitude rather than face the bitter truth that you aren't cut out for trading and are unwilling to reshape yourself into a man that is. I, me, myself... find that to be a genuinely pathetic quality.

"There's little point claiming that it's possible to be systematically profitable at forex,"

So true indeed.

Thank you.
What you are saying needs to become second nature for anyone considering a foray in forex.

Hanover, please don't take this as an offence, but.....

Why does it take 12 months to get an update?
Is your money in a segregated customer account?
Do you get a yearly position report directly from his broker or an independent third-party certification?
What Due Dilligence have you done on that matter so far?

Why do I ask?
The statement looks like made in Excel.
If this statement is made by the guy himself, he could extremly distort the real picture by smoothing it and show you whatever you want to see.
Actually he could make any statement untill the point you withdraw more money than you deposited.
We are talking about a bit more the 3000 pounds over more than three years.... compare that to an average retail account of 2500 USD typically gone within 3-6 months.....

The one thing I am sure off is that some forex brokers apply every thinkable trick to lure in new victims and keep the dream alive....that's the core issue.
An average retail customer is approx worth around 250 - 300 USD. That is approx what they pay for active customers in takeovers of troubled brokers....

How much would this industry be willing to invest to keep the dream alive? They invest a large portion of their revenue in marketing.... we are talking about hundreds of millions of USD globally per year. A single major forex broker invests dozends of millions a year in marketing and sales, which are their major cost blocks.

You are very communicative, decent person with a broad reach here on FF. If I where a broker or had a severe stake in the forex business and an essential motive to keep the dream alive, I would without any hesitation invest 1000 Pounds each year into your managed account to make you happy ( first of all because you are a decent guy :-) ), make you a true believer and let yourself be used as a marketing tool. Even better so if you have no idea that this actually is the case and I know such a trick has been used in the past already.

I know, I know. Now I get another tin foil hat award..... Sorry for that. ;-)

interesting angle. an update every 12 months does not make sense indeed

perhaps the fund manager knows that hanover is active in FF, and can spill the beans, so give him 100% return and it is cheap advertising

having said that; I trust hanover is telling the truth

In keeping with forum rules, I've moved my reply to the commercial section here.

Hello all,
I hope Hanover or others here can help me.
I am searching for an indicator that plot a line of the average take profit level (indicating the amount possibly).
I mean, if I have 5 orders with 5 different TP levels I would like to know at which level the average TP is.
Something like the indicator in the printscreen I attach here.
It plots the average entry level.
I've googled it but couldn't find any.
Many thanks
v

I am very sorry, I don't have an indicator like the one that you've described.

You could try looking in this thread (note especially the posts here and here, where there are ZIP files containing thousands of indicators), and the links in the 'Miscellaneous resources' section in post #1. (If a MQ4 file was written before Feb 2014, it will probably need to be compiled using MetaEditor/compiler build 509 -- see this).

Or you could ask to have one coded in one of the "I code your indicators for free" threads.

try this

I hope this indicator can be of help:

It shows :

1. Break even price tag for multiple positions
2. Level for custom Profit/Loss Percentage of Balance
3. Level for custom Profit/Loss Amount in Deposit Currency
4. For a specific Magic Number or all trades on the chart
5. Includes Commissions and Swaps.

Hey David,

32 Likes on that post, now 33. Could be a record.

Hanover is always the voice of reason.

Hanover.....you are exactly discribing in this post with what I would label as a classical "keeping the dream alive" marketing strategy...... there are constant winners, how small their percentage might be and those winners have an edge that doesn't wear off over time, that is based on a sound trading process, on experience, on skill and on sound risk management and you can achieve that goal by learning and training.

To claim that I want to shut down the forex market so that nobody can outperform me is ridiculous. What I would like to shut down is a retail forex industry that is selling a completly wrong picture on all marketing channels they can possibly use. They sell actually nothing else than gambling, they adress gamblers and gambling addiction is central for the profit of their business model.

The ease of access, the size of leverage offered by brokers and false marketing claims are a toxic combination that makes sure that 99.9% of retail traders (gamblers) lose money (mainly to the brokers) in the long run, causing social costs of extrem proportions. This is the reason why most of the forex industry is without any doubt nothing less than fraud and scam, exploiting a lack of regulation that needs to be and will be closed somewhere in the future.

The major enemy of a losing retail trader is not a winning retail trader, its the broker and/or its liquidity providers.

AMF study 2014 on CFD's: http://www.amf-france.org/en_US/Actu...angSwitch=true
89% of 13224 traders lost money over a 4 year period (this is a significant sample size!)
They lost a total of 175 Mio Euro
The average loss was about 11000 Euros
Most of the accounts were gone within 4 months
Only 1575 traders made a profit / total combined profit was just 13.8 Mio Euro
In the view of a retail customer this means 92% of your loss goes into the brokers pocket - 8% in those of successful customer

If you look at the 8% winners after 4 years, the average profit in this group over 4 years is just about 8760 Euros..... not knowing how big their account size really was, it is even for the winners a game that doesn't really pay off in my opinion in real terms. If you would break it further down to those who really gained a reasonable amount of money in comparison to their trading capital over 4 years, we are talking most likely about less than 1% significant winners after 4 years.....and sorry, such a low numbercan still be explained to 100% by pure luck applying binominal distribution under the assumption everything is purely random. Big profits always correlate with big risks in an functioning, efficient forex market. The strongest participants - market makers - have an very high motivation that this stays an unbreakable law for the overwelming majority of participants most of the time.

One major reason for the misinterpretation of facts is rooted mainly in mixing system constraints.... because their are hundreds of different market participants, using hundreds of different ways to trade, apply all sorts of leverages, trade different time frames and even have all sort of different motivations to participate in the market, each participant has it own perception of how and why price moves. What is true and real in the eyes and constraints of one participant, an other participant experiences an other reality under his constraints. Both can be right considering their specific view under their specific constraints, although both are telling exactly the oposite. I know that you believe that one can consistently take advantage of "pockets of non randomness"....I understand that approach and motivation, but also see that the market structure is designed to give you the hardest possible time to achieve that goal and competition around this pocket of non randomness is brutal.

Within a functioning market, price has to be random to a very high degree over all time frames to almost all participants to function in a stable way and most market laws are intended to support a market that is non predictible and therefore efficient - this is especially true in the eyes of an average (not well informed) single retail forex trader, as well as for all retail traders combined as a group, but will be wrong in the eyes of p.e. an institutional trader that has to move hundred of millions of a currency within a short period of time, because he can see his actions are directly influencing price short term and are therefore not random for a limited periode based on his isolated knowledge. If you are a central banker that has unlimted ammo to sell and influence / weaken your own currency, you will come to conclusion that from your isloated point of view even long term price drifts are not random, instead they are the result of a policy to steer an economy and are not aimed at extracting money from other market participants.

Those who make markets on a daily basis have to make sure most price action for a retail forex trader and most other market participants are very close to random, so they can earn enough money based on market making and keep doing it. The non random part of it has to be so small and well hidden that it is easily absorbed by the profits that are generated "risk less" based on market design.

The casino argument (combined with the fact most retail forex traders are nothing else than just gamblers) is mainly depending on the leverage used by a retail trader. If one participant with little equity trades on high leverage against an other participant with no leverage but a huge captial base, the gamlers ruin theorem explains why the money must and finally will end in the hand of the unleverage participant in a efficient market and a zero sum game.

So retail forex becomes ever more casino like, the more leverage is offered and used by retail traders. Since broker offer leverage from 50 up to 2000......it's clear that brokers do promote and motivate retailers to take far more leverage than reasonable. Now you claim, that no experienced trader will use leverage above 5, keeps his risk below 1% per trade and I agree with all of that, but than why the heck is everybody screaming when I say leverage should be limited to a max of 5?

That retail forex is a negative expectancy and a negative sum game for all retail traders as a group has been explained and supported by facts in great detail already. You really need a very significant edge to overcome this structurally integrated disadvantage as a retailer.....and all evidence suggests so far that in the long run there are "close to zero" winners within the retail traders group under the assumption that they are making their trading decisions based on price, orderbook and statistical information derived out of it. The CFTC data over each quater, the data from several other studies over 2 upto 4 years do all fit a binominal distribution based on the assumption that price is random and it suggests the percentage of winners will go to zero in the long run.

So in my opinion, one of the last tiny places left for retailers to make (small) profits is to mimic market makers (with mean reversion models) or use trend following strategies in longer time frames, using very little or no leverage, using diversification to minimize the impact of tail risks and insider trading around news events and therefore extract profits from a small portion of market participants that are overleveraged or simply have to do business related transactions and are forced to buy and sell whatever a price is. 99.9% of retailers do not have the capital required to implement such a strategy and still achieve profits that are big enough in absolute terms to compensate for time and effort necessary. Acutally this strategy should be extremly boring and only works for trade durations clearly greater than 1 day to minimize the impact of trading costs.

To sum it up:
The forex industry is targeting retail customers with an average trading capital as little as 2500 USD. Offering leverage up to 2000, motivate their customers to use high leverage and increase trade frequency by offering turnover based rabatts and bonuses, which leads to the fact that 90% of all retail trades have a duration of less than 24h, where randomness is almost perfect looking at a large enough sample size......so, yes.... Mingary is most likely correct with his statement that 99.99% of all retailers are gamblers and lose in the long run, when trading under these assumptions.

In my opinion 0.01% anectodal winners do by far not justify the existence of a retail forex industry, that is designed and fine tuned to produce close to 100% losers, create countless gambling addicts and therefore causes serious harm to the public.

That's my opinion. However, if real evidence exists to challange my view, I am always open to adapt to new facts.

I'd composed a lengthy reply and then decided to delete it, as upon re-reading it, I concluded that it didn't really address the points in your post.

Aren't there risk disclaimers? They know what they're signing up for and they know when they are losing. They may be in denial... But that's not the fault of the market. That's a fault of their own ability to adapt and overcome (life skills that are beneficial for members of society to learn). I consider the lessons taught on the path to successful trading to far outweigh the monetary costs. Everyone gets what they work for and there is no reason for sane individuals to believe that a free ride is going to exist for themselves. If they aren't losing the money in one way they'll just lose it in another. The market teaches things that can only ever be learned in life through sacrifice.

I consider every penny lost to the market to have been well spent.

You are really a dangerous person... aren't you?

I don't know if you make such statements because you are paid for it, because you are stakeholder in the forex industry scam, or just to calm your conscience.

So you just justified why it is totally ok to harm the weak, because otherwise someone else will do it? A penny lost to the market is well spent....really? Well, acting in good faith and acting responsible beyond what is written down in laws is something that is crucial to run a sustainable business.

What I know for sure is that your statement is clearly one dimensional and you seem to have a total lack of empathy towords those who are getting harmed by this industry. But I must admit you are quite effective in distorting the real picture....what a waste of talent.

Maybe it all comes down to these questions:

Would you introduce your children (or your most loved ones) into the world of retail forex?

If they would ask you at the age of 15 whether they should aim for a higher education / masters degree to get a decent job or invest all their energy into learning how to successfully trade the forex market, what would you recommend?