Forex - A negative sum game for losers

Current state of Affiliate Marketing:

I proudly recognize that I helped to drive up the average cost to lure in new retail forex traders to about 1000 - 1500 USD in Western countries.
https://financefeeds.com/lead-recycl...-inefficiency/

The house of cards tumbles.....

Even ASIC finally starts to regulate against the epic retail forex fraud..... well it took them far longer than CFTC, ESMA or Japan... but they finally get it too. Better late than never!

Because the Aussi retailers lose like hell.....especially since they still get up to 500:1 leverage, which is absolutly toxic:

https://financefeeds.com/asic-deals-...ry-really-bad/

A few things need to be highlighted out of this report:

“In our 2019 review we found that during the period 1 January 2018 to 31 December 2018: There were over 9.3 million positions that were automatically closed out by CFD issuers for around 1 million active clients; there were over 41,000 CFD trading accounts that went into negative
balance (i.e. the retail client owed money to the CFD issuer); and the total negative balance (i.e. the total amount owed by those retail
clients) was over $33 million.”

Wow:
1 Million active customers got a margin call! They lost more or less everything.
41000 CFD trading accounts went in to negative balance!!! These guys even lost about 800 USD more than their deposit on average!

As outlined in paragraph 70, retail client losses from trading CFDs are a component of the $1.5 billion gross trading revenue CFD issuers received in 2018. Our evidence of client losses is broadly consistent with reported losses in other jurisdictions. For example, the FCA reported that an estimated 78% of active retail client CFD accounts were loss-making, with total loss estimated at £1.07 billion a year. The FCA noted that other regulators in Europe reported similar poor results for retail clients” says ASIC.

Holy sh.... the Aussi retail fx customers lose about 1 billion pound a year.
1 Mio customers lose on average about 1000 a year.... that's absolutly plausible.

But yeahh.... still a lot here on FF claim they make money in the long run..... ohhh wait, how much do they get per new victim the channel to a forex broker? They have about 500 - 1000 reasons to keep the dream alive and directly benefit from spreading the lie of profitable retail forex trading.

Retail forex trading is a negative sum game for losers!

In your opinion, are stocks and options a negative sum game for losers, too, or just currency trading?

everything

Thank you for that, but I guess I should have been clearer:

HudithePfupf, in your opinion, are stocks and options a negative sum game for losers, too, or just currency trading?

Given that 90% of options tend to expire worthless....make a guess!

Stocks...really down to little bit of luck, and a lot to holding period.
Even the popular index funds return vary wildly depend on where that 5-10-20 years start...

Really good move by ASIC to consider nailing binaries and reducing leverage on retail derivatives. We Aussies have a real penchant for the flutter. A long history of association with sporting clubs etc. Experienced traders will be able to work around these leverage limitations (it is their interests anyway to do so)....but it certainly will clean out the space made for the inexperienced punter. I just wish the same would be done to Pokies and sports betting in general. It really has a hold of us here given the significant revenue that goes to the State Governments from it....and the powerful lobby group that comes with it.....but the social cost is v. high and detrimental to the household.....just like Dexter and Sinistra

No doubt Retail Forex should be banned in its current form
What is extremely upsetting is that retail forex trading is still marketed as a "legititimate business" to attract and retain customers

No difference to the casino industry. People have a right to punt.....but regulators need to ensure that this is within 'reasonable' bounds. There will always be the predators and the prey.....but it doesn't need to get out of hand and there should be mechanisms to prevent undue exploitation. Managed is preferred to forcing things underground where it gets real nasty....not that there isn't some of this already. You just need to ensure the regulators have teeth...are *clean* and are well informed. Well resourced and remunerated helps to attract the legions :-)

It has been some time since I disturbed Hudis mumbling and hating on the bad bad retail forex industry. But instead of posting another live proof of my continuous success in making money (not promoting or selling) here, I decided to let a picture speak for itself this time. Variety makes this whole thing much more interesting.

I always said that leverage has no effect on the amount of clients losing money .. but what do I know.. truth hurts.

(PS: what do we learn from the proving numbers? The problem is not located in the industry, it is located in front of the screens .. for so many reasons!)

it must really be painful to harbour a belief like yours knowing you have never been able to crack success while others have. I made 12 percent yesterday in 2 hours while you were chewing your nails believing the market is rigged against you. the conundrum is why you insist on continuing to hang around and spread your lies. People have posted accounts and you still don't believe them. like on the other thread I am going to make a statement and believe you are unemployed and unemployable and unless you can post your bank statements and paycheck I am inclined to believe you live off government benefits.

Banned by who, mmmm. Government, central banks, the UN or some other invested interest for this decision to be made?

Who then determines what is legititimate? A room full of academics?

Over regulation of the markets has created an environment with less volatility, creating an illusion that the market is easy,
The whole monetary system is over regulated, hence the slow decline of inflation.

FOREX trading is meant for the freedom of individuals to exchange on there belief in the future of the market. You think you should regulate someone else when they do something with their own money?

Over regulation will only put less value on money. Who then controls money?

Why in the world would anyone hold an option until it expires worthless?!

Actually, I was only asking a rhetorical question; I know the only people that believe stocks and options are "negative sum games for losers" are either 1) non-traders in those instruments or, 2) if they do trade them, they just aren't any good at it.

So I was actually just being facetious to see if HudithePfupf only hated currency trading or hated all forms of trading.....

Drolph... I feel your pain....

Almost everything you stated is outright false or misleading.... you find the facts in this thread.
https://www.financemagnates.com/wp-c...ty-Rates-1.png


This table just shows the results over a time period of 12 months (some say this is just 6 month period - but in correlation to the 3 month data from CFTC it is rather 12 month than 6 month)

I showed already that:
In each time periode the losers lose fare more than the profitable traders gain (this is a proven fact)
I listed already studies that prove that a profitable account in one periode does not have a higher probabilty to be profitable in the following periode. (proven fact)

This means nothing else that after 2 years only about 6.5% remain profitable, after 3 years it is about 1.5%, after 4 years about 0.4%, after 5 years about 0.1%

So here we go: After five years 99.9% of all retail accounts lose money. I asked myself why and tried to model the way retailers lose.
A simple mathematical model (efficient market, zero sum, average leverage, trading costs, average trading frequency) gives already very good results how fast retailers have to lose their money.... and the real world data from CFTC, NCA & ESMA, etc match these numbers almost perfect. So I understand pretty well how retailers are getting fleezed day in day out.....

One of the main arguments to keep the epic lie of this industry alive - that you can learn to be a profitable, speculative retail trader - is, that there are some winners out there..... They claim it's skill, but it can be explained just by pure luck:

If you have p.e. 1 Million retail accounts in Australia, after 5 years, about 1000 accounts (0.1%) could still be profitable just by pure luck using a random trading model.

This is the reason why I would never say there isn't a single profitbale trader out there over a limited period of time.
However, speculative trading of any kind is a negative sum game in the long run, if you use a leverage that is above the total average leverage in the whole market. If you use a leverage that is clearly below the average leverage of a market - you have a small mathematical edge against those using high leverage.... those with experience know what I mean.

Retail forex is a negative sum game for losers - if you don't believe that, learn it the hard way!
But don't lure in new victims in my thread!

I think the core of what I hate is an industry that sellls the epic lie of being able to profit from "specualtive" trading based on nothing else than price information. That is what 99% of all retail forex traders (and traders in some other asset classes) do. If you combine that with high leverage, it is absolutly toxic. Since they lie about that fact and deploy a giant markting machine to keep the business model alive, they should be regulated out of business for the benefit of 99.9% of all retail traders.

Any retail customer that participates in any kind of speculative trading should be fully aware that all these products and markets are organized and structured that retailers will lose money to those offering this services. That is their business model. It's that simple.

So do you believe all trading to be pointless then unless you are a large institution? Are you a profitable trader? I do not disagree the markets are toxic af and in no way favored for retailers, literally they tax you every trade you make, open spreads to close your positions unfairly, and take all of the swap possible whilst distorting feeds to piss you off. You really have to be hard headed and understand your plan if you want to make any money imo. Do you think that being profitable is possible if you understand "politics" and the macro? Or watch Trump's twitter? xD

Leverage?.... ....ohh my dear... I think reading this thread could do some good to your long term financial health.

Mingary won the battle days ago. Better cut your loss and stop attacking people in my thread.
Thank you.

or what, you going to ban me followed by commentary that I cant answer because I am banned? Are you going to be mature about this or carbon copy of juvenile traders that can't have a mature discussion? You started this thread and it seems like any differing opinion is met with threats.

My financial health is quite fine thanks. I have been doing this longer than you have been in puberty.

Look at all the different participants (trader groups) in a zero sum market and try to understand what their (lasting / temporarly) edge is....

You have those who facilitate the market.
The take money out via spread, commission, swap rate differences, etc. - this makes it a negative sum market for all others and is a permanent edge. Things like "last look" prinicple or simply matching orders are making sure that money is made all the time. In very rare occasions the market brakes down and creates even risks for market makers.... if they have bad risk management models they might take a hit from time to time, but overall their business model is stable.

You have HFT's frontrunning your orders.
They have a speed advantage (either technologically or because they simply pay for it) and front run your order almost riskless a million times for a very tiny profit.... but it add's up over time.....

You have a core group of major liquidity providers that use their information about orders and market structure against the interest of weaker market participants. This is valuable data and you can sell it to hedgefunds. In zero sum markets those applying less leverage do have a mathematical edge against the one using higher leverage. So even if they just follow the price based on a SMA 200 days they can extract money out of the real economy or leveraged speculators in the long run.

You have market participants with legal (research, data mining, machine learning, alternative data sources) and illegal (insider knowledge about important economic news releases or data) fundamental information edges. Most legal edges wear off over time, so they have to continusly produce new edges and invest heavily in technology, brain power, IT, etc to do so. However, if you are able to get relevant data earlier or in a better quality than others, data that is the base for fact based decisions in the mid to longterm timeframe, you have an edge that you can play out in the long run.

There are more groups I can think of .... but one thing is sure. In the end their profits have to come from an other market participant, because unlike in the stock market, no real value is generated in the long run through speculation.

So these groups have a huge interest to have as many weak and uninformed speculators in these markest as possible. Furter more, they can certainly cannibalize the real world economy too and force them to hedge currencies, commodities, etc. to dampen the wide swings by financial speculation.

While the market is efficient and random for a retail trader almost all of the time, the market can be inefficient and non random if one of these groups use their edge over a limited period of time. The edges are not visible in a way that these guys just have profitable trades.... they can only exploit their advantages over large number of trades and have an interest that random noise cover their actions and make it impossible for others to piggyback on it.

In the long run the real world edges will make sure that a very big part of the profits end in the pocket of those market participants with an edge that goes beyond just price information. A single retail trader therefore can't compete with these groups in the long run.

However, since market participants do not act rationally all the time, there are rare situations where some of these edges are overwhelmed by psychological effects and unpredictable irrational behaviour of the majority of market participants. Even a retail trader can theoretically exploit these events (fat tails).... but it will only work with very little leverage, robust money management, and a systematic trading process. This is more or less what trend trading does. Very important: You can't really leverage your ability to make a profit without increasing the risk of losing your small edge completly. The window for success is small in my opinion and it shifts over time.

The only way to leverage your outstanding ablitiy as a successful systematic trader is to manage other peoples money....taking a share of the profits while the risk remains 100% with the customer. In this case you do nothing else than becoming a professional hedgefund trader and yes....they have a monthly salary, and are getting paid for their work, because they have managed to turn the profit / risk ratio significantly in their favour.

Whether they would really outperform experienced retail traders trading under the exact same conditions is an other question.

Retail forex trading is not a business.

Always the same conclusion:
Retail forex is a negative sum game for losers.

Don't worry, as long as your language does not completly go over the edge you can stay as a classical role model for a successful retail trader making 12% in 2 hours..... and yes, their is never a lack of opinions but often a lack of facts.... Honestly, I am not interested in your opinion, but if you provide facts that help me shape my opinion about this topic your are always welcome.

just wondering, you being here with all your fictitious statements backed with zero substance since 2016. all your activity is against fx. what a waste of time and you will never get any of it back. It would be like me spending years on a cooking forum telling everyone cooking is a zero sum gain because of a the calories and diseases and GM food.

You have had zero effect on anyone visiting this forum and if anything you are trolling because you have nothing to offer. all your statements have no evidence and what you have offered as evidence is a joke.

I can't understand how someone can expend so much energy on a fruitless result. what have you achieved since 2016, do you have stats showing the difference you have made or is this just a platform for you to attract conflict?


oh and let's not try to distract the truth from assumption that's blown out of proportion. just because I made 12 percent in 2 hours on a day of high volatility doesn't imply its achievable on a regular basis. you speak of offering facts then it is just fair to speak in truths and not misdirection.