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Is Forex a ZERO Sum game? 62 replies

If losers average losers, then I am a loser 10 replies

Discussion on "Zero-sum Game" Article 7 replies

Forex: A Zero Sum Game? 18 replies

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Forex - A negative sum game for losers

Quoting alisoncummin
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.
Only if you're a loser.
Look Left Trade Right
Regardless of being a winner/loser, it's just basic math.
Quoting hazelj80
{quote} .... 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..
What you say might be unintensionally correct. If you have a lucky strike in retail forex and achieve a significant profit - stop immediately. Why? Because your profit is very likely just luck and you give it all back (and more) if you continue with a very high probability.

"5 Mio over a period of 6 years"..... such a statement doesn't provide any useful information to get any clue about what you try to say.
5 Mio over a period of 6 years is realisitc if you start with 50Mio.....

The ball player comparison is nonesense. A classical fairytale used by the forex industry. To become a professional ball player you need many thousand hours of training, talent, perfect physics and the luck of good health and genes over many years. At a certain point aging related effects will take their toll and limit a ball players chances. Their is no doubt that hard training, good physics, etc will increase your chances to prevail as a ball player.

This does not apply to speculative trading. This is not how effecient markets work. Studies show there is no significant skill component in speculative trading in an efficient negative sum market. All trading methods that work in the long run are not based on speculative decisions. You can take 10 newbies and 10 experienced traders, give all of them 100000 USD, give all of them just a pure price data and zero leverage and let them trade for 1 month. If you than rank all players you won't see a significant difference in the results between newbies and experienced traders. Provide them 100:1 leverage and than you likely see a difference, beause newbies will overleverage and lose faster then professionals. However, it is possible that a newbie could outperform all professional traders just based on luck and this happens in reality over short periods of time very often.

However, if 10 newbies play against 10 professional ball player they won't score even one goal no matter how long they play. Luck doesn't have a relevant influence. Only if the skill differences are getting very small like in a group of only professional players luck starts to play a certain role again, especially on single outcomes.

So if your trading decision is based on price only (or everything directly derived from price like all indicators) you will lose money in a negative sum market in the long run no matter what. Skill and experience won't make a differenceas shown by many studies.
Quoting HudithePfupf
{quote} What you say might be unintensionally correct. If you have a lucky strike in retail forex and achieve a significant profit - stop immediately. Why? Because your profit is very likely just luck and you give it all back (and more) if you continue with a very high probability. "5 Mio over a period of 6 years"..... such a statement doesn't provide any useful information to get any clue about what you try to say. 5 Mio over a period of 6 years is realisitc if you start with 50Mio..... The ball player comparison is nonesense. A classical fairytale...
you will never make that kind of money in ANY market without some sort of skill that hasn't been practiced for years just like a ball player, even if you only did it over a 5 year period. there are stats that say 95% lose. but how many years do the 95rs have in? less than 6 mos most of them. people who have more years in? the amount of people who make money go up but the profitable traders pool dwindle as time passes with each year of trading. start with 100, probably 75-80 of them will fail within 6 mos. some more fail after year 1 or so

only about 2, maybe 3-5 out of 100 might make it past the 5 year mark after years of work trial and error

its the same as basketball. lotta good people. just not NBA good and as the years go by taking players out by injury etc, those numbers dwindle as their skill gets better.

no one gets that lucky. not for X years straight they don't. that's mostly skill however they've gained it. sure you can have these huge runs (luck) but most will be smaller profits and smaller losses if you're making any money bu that's if you're using the correct amount of leverage
I think it’s more of a zero sum game because when we put on a position, there’s always a counterpart taking an opposite position. If I am long, the other will be short. So when the interest rate rises the one who is long will benefit whereas the one who is short will not. Therefore, in forex one’s gain is another's loss.
Finally they start to go after the snake oilers.... it's about time. Affiliate Marketing firms selling the lie of profitable forex retail trading and channeling new victims to shady forex, crypto and binary option brokers are a very significant part of the problem.

https://financefeeds.com/court-order...pay-7-million/

The binary options industry has been in the news again as the US derivatives regulator hits several marketing firms and their operators, mostly based out of Israel, with a combined $7 million fine for operating a fraudulent trading scheme.

The regulator said the promotional content produced by these fraudsters was viewed millions of times and caused more than 60,000 people to open accounts to trade binaries, forex, metals, cryptos, among other assets, with their unregulated brokers.

Based on these numbers you can assume that they are responsible for more than 120 Mio USD losses from 60000 people, because in average these accounts are about 2500 USD. All the money is gone within a few months. So a penalty of just 7 Mio is probably less than 50% of the commission revenue they they received, which is about 250 -300 USD per customer, which would correspond to 15 - 18 Mio USD.

At least they should have closed down their company, but the website is still up.
The turkish lira moves are worth a look:
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This is what happens when Erdi makes the monetary policy of his country.

From Q1 2018 to Dec 2021 he devalued the Turkish Lira from 3.7 USD/TRY to 18.27 USD/TRY
Instead of raising rates in a inflationary envoirement he hold them steady or even did rate cuts
The Turkish Lira lost about 80% of it's value in USD terms in just 4 years, while wages in manufacturing only doubled.
So a job pays about 2.5 times less than in 2018 in real terms, despite you got a 100% pay raise
The GDP in USD went down from 957 in 2014 to 730 in 2021 - so inflation was at least partially compensated by growth.

The main purpose of such a monetary policy was to devalue debt in turkish lira, make labour relatively much cheaper compared to other countries and therefore gain a compeditive advantage for the export industry, while imports of all kinds are getting so expensive that the average citizen can't buy them anymore. The classical move of a currency manipulator.

With such a policy the rich using significant leverage in lira and their assetts in stock, foreign currency, gold etc benefited strongly, but this weekend it looks Erdogans strategy is going belly up, while the Turkish Lira gained a lot within hours making such bets a disaster in the short term. Maybe Uncle Sam slapped them on the finger and told them they will label them as manipulator and put some sanction in place if it continues?

So how long will the Lira strength hold? It all depends on how fast they are raising rates significantly - the rug has been pulled and the cycle could begin again.
If you have Turkish Lira, this might be a good time to cash out, because this currency will be doomed again without a significant change in current policy and leadership. Those who know in advance should make a boat load of money... I don't.
Not for losers but for the majority of the retail traders forex is a negative sum game. There are more traders who lose than the ones who actually win. If we look closely at the trading expenses, we will see that each trader incurs trading costs whether the trade is a winner or a loser which further reduces the profits from winning trades and exacerbates the losses.
This is an example your endavour in retail forex trading typically ends..... most reach that point far earlier than this one.... so he kind of "outperformed" significantly.

Hi guys
My priorities in my life has changed.I wont be spending much time at FF or any forums.I am basically moved on in this area.
I will stop by here time to time but wont be participating full time.After my brother's torturous death,family Covid issues my mind is not in forums...
The System is solid and sound.Weakness is you control your MM and you'll do fine.In the end you only trade yourself.
Best of luck and wish you success.


Is this a honest statement?
Was / is the system solid and sound? If yes, based on what?
Is there any system in retail forex that is solid and sound?

Well if not, you are the problem..... and controlling MM and you will do fine.
Agree on this one... If your MM looks like having a 1 000 000 account and betting 1 000 on a monthly chart you will do pretty fine... but we all know this is not what retail forex trading is used for by 99.99999% of all participants.

Retail forex is a negative game for losers.
Quoting HudithePfupf
This is an example your endavour in retail forex trading typically ends..... most reach that point far earlier than this one.... so he kind of "outperformed" significantly. Hi guys My priorities in my life has changed.I wont be spending much time at FF or any forums.I am basically moved on in this area. I will stop by here time to time but wont be participating full time.After my brother's torturous death,family Covid issues my mind is not in forums... The System is solid and sound.Weakness is you control your MM and you'll do fine.In the end you...
"solid and sound", ...yeah, it sounds like BS, but strictly hypothetically now, if there is any proved consistent sys in time, nobody would make it available for the crowd of losers here or anywhere in private, right?
Because a winning system is like a real money machine, so it's crazy to even think like someone will give it to you right here for absolutely nothing except for his doubtful online glory, wich is naive stupid. So, if you will ask someone "based on what", most probabily you won't ever get a decent answer. The answer will be always vague, poor, general, evasive, or simply stupid. One will get the same feed even if there really is someone out there in retail FX who can beat the game, or if there isn't. So as far as I am concerned it makes me real sick even to think about asking someone "based on what" because I'm fed up with nonsense, generalities, and crass stupidity.

I've seen smooth sys resisting for years to black swans. And we all know trading society is full of "winning trading robots", an infinite variety of strategies. But none that I've seen lasts forever. Not even to hard testing, not to mention to real trading.

But, even all that considered, we should mind though, "retail forex is a negative game for losers" is most probabily true, but still a hypothesis. And I guess it will always be like that.
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Has anybody seen something like this?
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Tick chart from Dukascopy Web application Demo. There are some serious bugs, but this one is incredible. I realized in the past that the application puts in price delays of a few seconds that theoretically allows the broker to fill or not fill your orders already knowing what prices are in the close future. Typically price just didn't update and it took 20 or 30 seconds for an order to fill.... the process also takes more and more memory in the browser till you have to shot down the process and restart the application because it becomes so slow.

But that the price actually jumps back from 18:35:29 to 18:34:09 is a whole new level. In this case the broker has 20 sec where he knows where price is heading. Soon after, the chart gets corrected and the backjump is not visible anymore.... :-)
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Unfuckinbelievable, that the application even allows that such a chart is displayed. It shouldn't be possible - no way.

Have you ever seen something similar to this?
Only when I was with a really shonky bucketshop about 15 years ago. Doubtlessly Duka would say their demo server is not indicative of real prices served. in live trading, I keep an eye on refinitiv pricing - any repeated deviation from that is a big red flag
Scenario:

Since years the incredible waste of electric energy by crypto currencies is well known and the problem grows each year. A periode of cheap energy with low oil prices due to covid is definitely over and the opposite is the case - prices explode. Even energy shortages and blackouts in the coming winter are a very real possibility in Europe, but also in a lot of other places around the globe. There where several almost blackout events in Europe during Winter 2021. We will likely run out of luck next time.

This will finally change the perception and lax regulation and tolerance of energy wasting crypto currencies dramatically in a very short periode of time. Finally and in my opinion far too late regulators will step up and ban energy wasting cryptos like bitcoin, eth etc. to stop that incredible and harming energy waste. The currently work on such plans and how to implement them. Look out for warnings from regulators toward retail customers.... they clearly warn the public.

All the marketing propaganda efforts regarding "green crypto" will face reality. That reality is that every kwh wasted on crypto is wasted no matter what. It doesn't make a difference if they use green energy, like Musk claims is a good way. It obviously not. Each and every kwh could have been dedicated to real, productive and necessary use instead of wasting it on a digital speculative nothing burger. All companies holding cryptos or accepting cryptos are part of the problem. They have been corrupted to do so.

As soon as the first blackouts or energy shortages occur in Europe or elsewhere, the EU and US will take out their plan B's to finally adress the problem and ban that crap. The price will drop dramatically and the only use that will remain is an illegal criminal use. The massiv drops in prices will scare of the broad public. The risk of a 51% attack will increase during the price collaps, because mining will become unprofitable and the resulting concentration will create a situation where a 51% attack will become more and more possible. An actor might fnally go massively short outside the bitcoin market in derivates while hedging its exposure within the bitcoin market, then drop all his "physical bitcoins", double or tripple spend them, cash in on derivates and in the end shut down all mining capacity at once.

The most energy and cost effective blockchain and crypto technologies might have a chance to survive if they provide real world benefits against other payment systems to make cheaper, faster and saver. They have to be backed by goverments. If they do not achieve this, they will not survive in the long run.

https://netzpolitik.org/2022/interne...b-global-de-DE
Quoting HudithePfupf
Scenario: Since years the incredible waste of electric energy by crypto currencies is well known and the problem grows each year. A periode of cheap energy with low oil prices due to covid is definitely over and the opposite is the case - prices explode. Even energy shortages and blackouts in the coming winter are a very real possibility in Europe, but also in a lot of other places around the globe. There where several almost blackout events in Europe during Winter 2021. We will likely run out of luck next time. This will finally change the perception...
If crypto mining is banned -- impossible. It would require unilateral decisions across every country in the world... not likely in our generation.
If crypto mining becomes unprofitable -- then supply is capped, price rises. Also, in btc 19 million of 21 million already mined.
If governments bans use of crypto -- infrastructure is rapidly taking hold in major exchanges, quants are leaving established banks for crypto companies and the takeup is increasing not decreasing.

I agree they'll be some heists before there's any stability - the recent fall in crypto was one of them and still not over. And yes it's a green disaster. And yes it's a disaster for governments. But the price isn't based on what's best for the world so I can't join the long-term bearish bandwagon.
Quoting triphop
{quote} If crypto mining is banned -- impossible. It would require unilateral decisions across every country in the world... not likely in our generation. If crypto mining becomes unprofitable -- then supply is capped, price rises. Also, in btc 19 million of 21 million already mined. If governments bans use of crypto -- infrastructure is rapidly taking hold in major exchanges, quants are leaving established banks for crypto companies and the takeup is increasing not decreasing. I agree they'll be some heists before there's any stability - the recent...
People within the crypto bubble tend to forget that you don't need it at all. You can ban it tomorrow and the world moves on.

If developed countries ban mining than the only places mining can go are shady unregulated third world countries..... good luck with that.
If price sinks, demand tanks and oversupply is getting more an more critical, the closer to zero you get.
Crypto is massively inflationary by design, because you can launch crypto currency 1, 2, 3, 4, 5, 6,.....infinity out of thin air..... and that is exactly what happened and what will continue to happen till it blows up.

No non-goverment backed crypto coin will be allowed to compete to major currencies above a level where states lose control.
The tools and platforms, the technology behind it and the knowledge does hold some value..... products and services might be created that acutally improve digital transactions and payments and make them safer, cheaper, faster.... if so, this has value and will survive.

But all the speculation crap, the digital gold crap, the store of value crap, the hodler crap will finally collaps and vanish.

Crypto trading is a negative sum game for losers.
I don't think calling all crypto traders losers constitutes rigorous analysis hud

I couldnt give three round tosses if it blows up by the end of play today I just don't think it likely, even though increased regulation is a certainty. And correcting to sub $20k a strong possibility before the next run. It has utilitarian value - it's the perfect vehicle for money laundering. plus there's no agreement likely between all developed countries on *anything* anytime soon. And price is a function of supply and demand, you are seeing it back to front.

there's a video from taleb talking about it's price being zero which I'm sure you'll enjoy. his argument's got more holes than a colander though
Inserted Video
Quoting triphop
I don't think calling all crypto traders losers constitutes rigorous analysis hud I couldnt give three round tosses if it blows up by the end of play today I just don't think it likely, even though increased regulation is a certainty. And correcting to sub $20k a strong possibility before the next run. It has utilitarian value - it's the perfect vehicle for money laundering. Plus, there's no agreement likely between all developed countries on *anything* anytime soon. And price is a function of supply and demand,...
Come on, you miss simple logic! Crypto trading, a negative sum game for losers, it doesn't necessarily mean all crypto traders are losers.

Another trivial fallacy, defining some utility value as being the perfect vehicle for money laundering (or tax evasion) it's like you're a legitimate fraudster.
But fraud is not value.
Therefore, "no non-goverment backed crypto coin will be allowed to compete to major currencies above a level where states lose control".

If any "disaster for governments" possible, you can be sure they will agree on ...*something".
Therefore, "no non-goverment backed crypto coin will be allowed to compete to major currencies above a level where states lose control".

Price is *strictly* a function of supply and demand ? ...sure, but only in a libertarian world, we haven't gotten there yet, we're not even close and I guess we will never be. There is politics in everything... -> regulations will kill it.
Therefore, "no non-goverment backed crypto coin will be allowed to compete to major currencies above a level where states lose control".

Oh, I forgot Taleb, ...errr, forget it, he is crazy!
Member
Quoting TudorIoan
{quote} Come on, you miss simple logic! Crypto trading, a negative sum game for losers, it doesn't necessarily mean all crypto traders are losers. Another trivial fallacy, defining some utility value as the perfect vehicle for money laundering it's like you're a legitimate fraudster. Fraud is not value. Therefore, "no non-goverment backed crypto coin will be allowed to compete to major currencies above a level where states lose control". If any "disaster for governments" possible, you can be sure they will agree on ...*something". Therefore,...
and below 26000 and creeping down
ONE MUST LEARN, DO IT AND IT WILL BE KIND TO YOU
It's the same cycle *every* time. We're in a sustained drop in crypto, the naysayers get louder and louder. In a few months *, we'll see front page of Time magazine with a picture of a poppped balloon saying the crypto bubble has finally broken. And that'll be the start of the next uptrend.

Of course govt regulation will come in some form, to different degrees in different countries. But they won't kill it - why do you think the exchanges and investment banks are incorporating it into their systems? By betting long-term crypto collapse, you're betting against people on the inside - who know and speak to regulators. Not only that, but adoption is increasing, not decreasing.

The start of this fall was flagged to anyone paying attention 3 days prior to the peak when several hedge funds published carefully timed damaging crypto news stories (who are all currently short crypto). They'll leg out in the coming weeks, and buy it all back again. Rinse and repeat.

as for the other stuff - strictly is your addition, let's not do semantics else we'll be here till christmas - but hud was saying when price falls, demand falls, and it's basic stuff - it works the other way around. And fraud is big business, it's not trivial and has been a major driver of price, now being replaced by wider adoption. It's not morally right - you make out like I'm unloading shipments of crack cocaine in my spare time! - it's just how it is. One thing we can agree on though - no non-goverment backed crypto coin will be allowed to compete to major currencies above a level where states lose control. True true. You're saying they'll kill the market, I'm saying they'll simply regulate it for the next leg.

* blimey, it's happened already since I started writing!
https://www.dailymail.co.uk/news/art...-24-hours.html
But not quite the bottom...
More boring fallacies. Typically for crypto enthusiasts, it's ok.
But it sounds so embarrassing to support your point by following funds, exchanges and investment banks and referring to them for smart rigurosly documented decisions in finaces. They've bought like crazy blind those cdo-s in 2008 and when the party was over they've jumped from the windows of their investment bank offices, head first!
Because those fuckers buy anything it moves up, and that's it. Fancy "qants", they never really ask why is there to buy, because they fear they'll be missing out.

Regulate can only mean one thing. It's KYC it all and for good. That will kill all the fun in it.
After that it will remain just another boring fiat-pegged-derived&coded-financial-instrument
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