Forex - A negative sum game for losers

Agree, most of them just gamble, warehousing risk with averaging down, do not trade systematically and therefore are simply unable to apply statistics and probabilities to their results. Therefore they are unable to recognize that they are in fact participating in a negative sum game setting them up to lose in the long run for sure.

Extracting hundreds of millions of profits year after year the forex industry has really reached a level of perfection to suck in new victims and milk the gambling addicts that is astonishing to me. I respect my enemy in this fight. One year home office around the world with 24h access to the internet had a massive negative impact and helped to build epic distrotions of reality in crypto, forex, commodities and the stock market. If people would understand better how sophistically they get fleezed things might change to the better.

At least my thread enables readers to think about their actions an finally start to understand why they lose. Some might realize they made a mistake and dedicate their future efforts toward real productive purposes. If I only prevent a few hundred young people from wasting hundreds or even thousands of hours of their precious time chasing the lie of profitable retail forex trading, the net positive effect to society might be tremendous over a few decades.

Some ask why I do it, since I won't earn a single cent from that effort, but why the f.. should I... it's the right thing to do. Period.

at the end of the day, everyone knows there's risk involved so its no surprise that people lose money. forex is so complex and there's always so many different things in play that of course the average trader is going to lose money. people see a chance to make easy money (it only appears easy) and jump at the chance.
but if they're not losing money then no ones making money, so i have no problem, as long as i trade well and stay profitable then they can lose as much as they like.

Sorry, what do you mean, most of them gamble ? For the long run we all gamble in Forex. I'm fully aware that FX is a gamble. I'm betting only money I can afford to lose. I'm having fun.
What about stocks on the long run ? Do you think stocks are worth wasting time on? ...some "real productive purposes" ?

Quitters never win and winners never quit.

Only prodigy!

Today an other general crash in crypto, but not yet a full blown panic. There is likely an other 10 billion gone for good. China likely follows through in regulating or even banning crypto before the potential fallout by the final implosion becomes a systemic risk and spills over to other markets. They are leading current regulation to limit the fallout in their economy. Others will (have to) follow soon. El Salvador is just a distraction.... pure people.... but it also shows that crypto industry is meanwhile strong enough to "buy" the goverment of small countries.

It will be interesting how large companies like Tesla or the main stream speculators wil explain their gambling and the losses in crypto if the market continues to tank. The later group will play it in both directions, so they can likely even benefit from a crash. Companies like Tesla have large crypto stakes will soon be forced sellers when the race to zero starts. Crypto is a negative sum market like forex.... even worse, since fees and trading costs are much higher.... keep that always in mind.

So for the crypto industry it will remain a perfect money making machine with still little regulation and huge manipulation potential. So I don't expect crypto to vanish at this point. The professional trading industry still has a greater milking potential in this field than in forex and the started just a fex years back. So as long as they can legally milk retailers, they will do it without mercy. This is also the main reason why it always came back to live even after significant corrections in the past. Doesn't need that much of money if you controll more than half of the market. I wonder about the role of paypal (and buddies) in the last run up. I think they have been in a good position with all their realtime data and a global customer base using their crypto products to front run crypto demand. Now they likely doing it in the other direction. We are approaching a regulation tipping point, where new highs are no longer realisitic because the manipulation potential is getting smaller and smaller.

The hodlers still can and will burry their head in the sand based on hopium..... till it is too late and they realize that they can't pay off their debt with crypto.
The addicted gamblers will always return no matter what ..... they just need an other 1000 USD to burn through.

The real pain and damage starts with BTC below 3000.... most money will be lost by people who will continue to believe that BTC will recover and reach new highs.... doubling down on their underwater bets till they finally blow off.... from hero to zero... but after 10 - 15 years a new generation of suckers will jump onto the next extrem speculation train... whatever that will be... like astroids mining, privat space exploration, Mars colonisation, nuclear fusion, etc. etc.

How does the market maker set the spread?
He looks at what value of the spread his profit will be zero.
Then the spread is slightly increased.

Please let me know when you finally recognize that you wasted your life selling the lie of profitable retail forex trading.
Well, looks like karma is a bitch once again... but I won't laugh about it.

https://www.abc.net.au/news/2015-02-...llions/6087976

Australian retail traders lose hard.... back than and today.

Just one way to screw them..... similar efforts in almost every country on earth and currently red hot in crypto....

https://www.abc.net.au/news/2017-03-...lation/8357094

They learned the dirty tricks in forex and apply it on crypto...... till regulation kicks in.... not yet there, but it will come.

774 Mio AUD Losses in just 2 weeks and just Australia...... How big where the net losses globally in 2020 for retail traders?


And since retail traders do not learn from their mistakes and are addicted gamblers they keep on losing and see their balances even go into negative territory.

Will they ever get it that retail forex is a negative sum game for losers?

Marvellous start for crypto in El Salvador.....



What a nice wash trade or did they just drop their free BTC the very first moment they could?

One thing is sure..... this price action results in epic losses for cfd crypto retail traders with leverage.
They probably lost billions combined today.

Waiting for hearing the fallout reports and then ...... regulation, serious regulation.

On June 22nd 2021 I posted that China, the country with the second biggest economy worldwide, is on a very clear path to severly regulate cryptos or even ban them. This is the only rational decision a country can take based on the current state of crypto wordwide. The earlier they move, the less will be the harm to their economies and citizens.

Since a few days a total ban is reality. This means all crypto owners within the legal reach of China can't spend or transfrom their crypto holdings into real fiat currencies than can be actually spent on real services and products.

You can't store them legally, you can't trade them legally, you can't spend them legally.

This means cryptos are essentially worthless within China. They can't tranform their virtual fortunes in something of real value. If they still try to find a way to do so, they expose themselves to legal risks and punishment. They brake the law. So allthough the BTC / USD is still above 40000, for all chinese citizens BTC and other cryptos became actually worthless. OK, now you claim that your BTC is out of reach of the regulators.... who cares? They just have to make sure you can't spend them within their country and you can hold as much of it you like. Even if you are able to sell them to somebody outside their economy, you actually export future harm and negatively impact your compeditors. It's likely smart to be early with tough regulation.

China won't be the last country to do so. More will follow and at some point even if the decentralized blockchain based crypto currencies are still up and running somewhere in a few unregulated places for many years to come, your ability to spend and transform your holdings will become more and more limited till the run to the last few exit doors starts and crypto prices are collapsing within a very short time to their intrinsic value of 0.

Since the majority of cryptos are hold by a few and the gini factors behind them are horrible, the prices can be manipulated to a very high degree. Check out what percentages are hold by few wales, hedgefunds, big cooperations and what is actually hold by small indiviual investors. It is very telling. It's like having a tool where you can decide daily if it's price rise or sinks totally at your will and you can make money both ways. As long as this is still possible in many countries all over the world and regulators do not fully regulate all crypto like other financial assets, the retail traders and common people, deceived by the massive crypto marketing machine, will continue to lose astronomical amounts of money every year and they will keep the illusion up and running like in retail forex trading.

To extract money from addicted retail crypto gamblers, it doesn't matter if the BTC/USD is at 40000 or at 40.... high percentages of relative price moves combined with leverage and low trading fees will keep the casinos up and running and with enough marketing new victims will be sucked in and spit out endlessly. So this purely speculative gambling part of the crypto industry will last likely longer than the part where crypto aims to be a real alternative to fiat money.... never was, never will be. In its current form it is highly inefficient to a degree that is just laughable.

Privat crypto currency will be wiped out if these basic assumptions hold true:

Countries (except some failed ones without an own working currency) will never give up their control over money without using all powers they have at hand.
Likely this power is big enough to wipe out the crypto industry if they decide it's time to do so and regulate them to death.
It's not that there aren't cryptos somewhere, but your ability to spend them legally is going to zero.

Game over.

Retail crypto heros..... reality vs wishful thinking. Who controls the fate of cryptos? Who bails out? Who is holding the bag in the very end?
Now you get an idea.

Very insightful. So Cryptos, similar to other speculative markets, can also be manipulated by large institutions then.
As they said, if you can't fight them, join them :-)

@hudithepfupf you’re seriously supporting China here ?? What about the move to a more free world, not that I’m a big time crypto supporter, but I just understand the sentiments people are attaching with this new age currency.

An example how the crypto marketing machine is destorting reality in ways that are just funny:

Example from Zerohedge (the alternative news outlet that gives you zero edge, but where you can publish trash and propaganda all day long)

https://www.zerohedge.com/markets/us...watt-immersion

According to the company, Immersion-Cooling is the process of submerging miner ASICs in a specialized fluid that circulates, allowing the miners integrated circuits to operate at lower temperatures. if it sounds vaguely similar to how one cools a nuclear power plant, it's because it's not too far off. This technique also increases the hash rate of the miners, as they no longer need fans for cooling, resulting in the machines using less energy. In fact, the machines themselves become sources of energy (and heat), which with the world facing a global energy crisis is a feature that both China and Europe would be delighted to have.



How stupid one have to be so write down such crap? Nonetheless how many are even more stupid to believe shit like this? Electricity is the most valueable form of energy. Energy is never destroyed, it is just transformed from one form of energy to an other. Heat energy is the final stage and therefore one with the lowest value.... in most cases it even has an negative value because it has to be dumped somehow or is available in excess in a lot of places. The destribultion of heat to reuse it for heating purposes of buildings is costly and therefore locally limited. The only way a crypto mining plant becomes a useful source of energy for a few hours would be if you burn it to the ground..... at least enough heat for a nice grill session.

The US, Europe and a lot more countries are currently doing a huge mistake allowing crypto miners to waste electric energy on a gigantic scale. All climate discussions are essentially nonesense if we do not stop first the most and completly unnecessary waste of energy caused by crypto mining. If you are a politican, regulator or working in a goverment unit that is somehow affected by the waste of energy through crypto mining pull the f....ing plug now and ban that it. If you think climate change is a real problem (and I agree that the part of climate change caused by humans is a real one and not just in regards to a simple average temperature rise, it goes much further than that) do your part and increase the awareness that crypto mining is a very serious, incredible high waste of electric energy and giant producer of electronic waste. We are talking about the energy consumption of a whole country the size of Polen and electronic waste per year like a country the size of Netherlands. Gigantic numbers - gigantic problem! So no time to waste.

Current details here:
https://digiconomist.net/bitcoin-energy-consumption/

Remember, no matter how the energy is prodused for crypto mining it is in any case simply wasted, because the energy used could be allocated to real productive purpose instead. So don't fall for the argumentation that waste or "green" energy is used for mining - such energy should always rather be used for a real productive purpose. Otherwise it is in no way green at all, no matter how you produce it. Don't be as stupid as Elon Musk not to see this - he was just talking for his own books and he has zero real interest in the protection of the environment. His personal CO2 footprint and that of his companies tells the real story.

There is an urgent need to regulate and eliminate the waste of energy through crypto mining globally. Each envoiremental group should put that on the very top of their priority list.

One day you'll wake up and you will realize that cryptos paved the way to bring all money transactions 100% on electronic systems that are 100% controlled by goverments. Unless you switch to a barter economy, they will controll 100% of your transactions. If you don't like that, make sure that cash remains a legal source of payment in the jurisdiction you are living in. China is exactly on this path and a digital yuan will just consolidate the whole thing into a more centralized solution.... I don't like it and I hope western democracies don't go down this path.

Cryptos certainly won't make you free. It's a troyan horse. If you want to remain free make sure efficient data protection laws protect your freedom and prevent third parties from getting information about every decision and step you make in your life. Read and understand Ed Snowdens message to the world... this would be a good start to develop an own strategy to keep your freedom where it is possible.

I understand what you are saying.... I agree that it is stupid to bet against the crypto industry at this moment in time. You are also correct that there is a lot of money to be made in the crypto field (or the forex trading field). Certainly not as a leveraged retail speculator, but as a shovel seller of any kind that enables the few strong to prey on the weak masses. But are you on the right side of history in the long run? Is it the right thing to do?

No... it's not. You waste your time and your talent and sell your soul to something that causes great harm to a lot of people. So in the end you won't be happy and your instinct should tell you not to do it. But it's your decision and one day you will feel the consequences that come along with it.

One thing is true without any doubt:

Retail forex or crypto trading is a negative sum game for losers.

The probablity of you proving me wrong on this one over a periode of 10 years is very close to zero.

Trading based on a speculative model is always gambling.... and yes, gambling can be fun to a degree that is even addictiv.... however, the rules of the game are set in a way you will lose with any speculative approach in forex trading in the long run, no matter what. I explained in this thread why this is always the case and why even a very simple model can explain well what you see in large retail trader groups.

However, a very few market participants are not gambling in a classical way... they either trade on non public data that has some predictive value (always with a limited shelf live (markets are efficient) or illegal insider data), have a technological advantage (p.e. speed, etc) or have an advantage related to the size of their bets relative to the capital at risk...etc. etc. Such edges come and only stay with massive efforts to remain on top of the game and you need a huge capital base to make bets big enough to make reasonable money without significant leverage that would otherwise destroy your in any case relatively small edges.

In stocks you certainly have a significant part of gambling and speculation too. If you make short time speculative decisions you gamble and if you do penny stocks the manipulation component is maybe even bigger than forex. However since in companies there are real people working day in day out to solve real problems, provide real services and create real products the productive part of this activity creates value that in average grows over time. This is your real edge. This will give your equity curve a steady upwards drift, while it always will have volatile fluctuations up and down that hides your edge in the short run.

If you buy stocks you bay part of these companies and participate on their daily real value creation. If there is an economy there is value creation. If you diversify your investments and stay in for the long run you will gain money with a very high probability as long as the current overall rules for the economy don't change completly (like a world war, global financial meltdowns and massive debt defaults, massive man made or global natural desasters, etc.). The speculative part of each position will fade out over time and after decades and several business cycles every stock value has to more or less reflect the real growth and profitablity of the company and the value created during this time period. If you believe that mankind will progress in the next 30 years and you are younger than 50, it is reasonable to invest in stocks. And yes, there is no guaranty.

Unfortunately, at this point of time we are in a everything bubble and the values are distorted in an extrem way (so far very positive for stock investors). There are many good reasons why stocks are expensive today in the current environment. Cheap money flooded all markets to keep the global economy running and stable and I see no way out without risiking a major collaps. This will change one day and I can't predict when, but I think it is realisitic to assume that central banks won't create the collaps themselves. The easiest way forward is to manage too high debt levels and deflation with artifical inflation through money creation.

Best case: This will chocke growth to zero and finally we move into a controlled deflationary phase over a very long time till the world economy becomes fully sustainable. We might move into a future where all rates become zero or negative globally to manage a switch from a quantitative growth model to a qualitative growth model.... debt would never be payed back if this becomes true... maybe this is way all central banks suck up debt of all kind from banks so the losses can be socialized and distributed to the public. Zero interest combinded with 2% inflation is a heavy tax on the poor in the long run.... but do they realize it? This will be the price to pay to avoid an uncontrolled collaps of the economy during such an extrem but in the end positiv change.

While you achieved average returns of 7% per year in the past if my assumption are correct future returns will be relatively low over decades to come..... but no matter what, owning part of companies that have a productive component is the best way to go in the long run and will likely beat all other asset classes and certain industries vanish and new ones are created.... there is always opportunity somewhere.

Diversification, zero leverage, long holding periods, rebalancing, minimizing your trading costs, etc will all help you to make or at least lose less money in the long run. Don't waste any time in the search for outsmarting markets - this is a dead end. You can't, certainly not by any speculative approach. Keep your investment process simple, steady, cheap, save and you have maximized your chance to succeed.

Use your time for real productive purposes and not for speculation.

Most valuable asset in the world is trust. If no trust - there is crime, wars, violance. All wars in the world is because of no trust. Look what Vladimir Putin said regarding fights on the streets - "If you see that fight is imminent - you must beat first" (so - you start the fight, this is because you do not trust, you beat because of fear to miss some advantage). This is how all wars start. When people do not have trust - they doubt & fear. Fearful people are easily manipulated.

USA prints money, China prints money, Russsia prints money - what money is "real" ? Why Putin should use $? Therefore real power is military force. And with that, you force others to use and accept your printed money. With military force you annect Siria, Affrica and use resources you steal from them - oil, metals etc No other real "money" is in world as military force. Crypto is a solution for that. Finally. You see how China deals with crypto - with force. They are in fear of losing ground. That elite "inner circle" people...

Therefore trust is an essential value in the world. People lose trust in fiat money because they see corruption all around in all levels. Some "inner circle" people enjoy fiat money printing and can easily access cheap money... but all the rest 99% people... you know...

Blockchain... it is all about trust. This is so important. It is the key to peace in the world. No more money printing monopoly. All those wars... you print money, buy stuff and those who sell you stuff how they feel? Imagine you have a printer and just print money but all the rest of people just see how easily you get that money and spend to your army and then offense others and keep all in fears... and no way out of that trust issues.. other than crypto.

See how China ratings was manipulated by current boss of International Monetary Fund.. all that is so corruptive. People are weak... get easily corrupted. Blockchain solve that. Not possible to corrupt by design.

It is ok to pay price with energy costs to get trust in the world.

Its negative sum because retail traders are buying into things that are widely taught to put stops and trades in the exact same places by course peddlers. and even the brokers themselves provide you with "analytical tools, data and training" stay away from all of it. you gotta get your lumps and learn it for yourself and if youre the fortunate few who do make it, then take that money and buy ETF or REITS for example.

the retail trading/broker model makes it very easy for retail traders to become liquidity for the other side i.e your broker or institutional traders looking to make deals at certain prices.

and the whole bit about making money in speculative trading for 10 years doesn't matter.

if i made 5 million over a 6 year period, who cares if my method doesn't work after that? i got mine. most ball players don't play more than 10 and they makes 10s of millions if they don't blow it all, then they go on to do other things. why would you need to prove to anyone you can make money in speculative trading for 10 years if you're making that amount of money? i wouldn't.

If we say that 90% of the traders fail in forex, how can it be a zero sum game. A zero sum game is where for every trader who makes a profit, there’s another forex trader who loses an equivalent amount. However in forex traders lose more than they earn. The money which doesn’t go to traders goes to brokers. So it’s definitely a negative sum game.