Is forex education misleading or everyone is stupid? | Page 4 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Forex Education 78 replies

forex education 24 replies

Education IRA (forex)? 2 replies

Just finished forex education, what should be my next path? 12 replies

Stocks vs Forex - Is everyone suited for forex? 18 replies

Attachments: Is forex education misleading or everyone is stupid?
Exit Attachments

Is forex education misleading or everyone is stupid?

  • #61
  • Jan 14, 2022 9:28am Jan 14, 2022 9:28am
Quoting TimeTells
{quote} Yep, could well be that we in Retail Forex are in our own "ring-fenced" world away from the real currency exchanging that goes on externally betwen banks and large companies etc. Maybe those Liquidity Providers to our Brokers would take ALL our trades, each and every one buy OR sell, and just hang on to them until the spikes and dips shake out weak hands and they can snatch a cut off the top of the whole pot (ie the LPs may not be after every retail dollar just a certain % cut whatever that may be). This is not so much a malicious act imo,...
https://tokenist.com/investing/forex-statistics/

9. Retail Forex trading – that is to say, trading that is done by individuals, accounts for only 5.5% of the entire Forex market. Large institutions are still getting the biggest slice of the cake – thankfully, it’s an enormous cake

19. The most popular trading platform is still the classic MT4, which is used by 85% of traders. The second most popular platform is the MT5, which is used by only 6% of traders.

20. 70% of trades use a live account, while the other 30% are using demo accounts.

21. 72% of forex traders have no prior experience in trading in other markets.

22. There are approximately 10 million forex traders in the world today.

23. Of those 10 million, 3.2 million are in Asia, and 1.5 million each in Europe and North America.

24. There 1.3 million traders in Africa, almost a million in the Middle East, and 600,000 in South America. Central America has around 335,000 traders, while Oceania has 190,000.

25. As for specific countries, the UK, as a hub of forex trading, is the leader in this regard, having more than 280,000 online traders.
It never gets easier, you just get better
  • #62
  • Jan 14, 2022 10:50am Jan 14, 2022 10:50am
Quoting Thoughts
{quote}I really really admire what you're trying to do, but what you're saying shows you may get some value reading up on market infrastructure or talking to an industry insider. The articles you just dismissed demonstrates: 1. There are very large speculative players in FX 2. They can move the prices of any pair with concerted effort; (that's what they were doing at the fix, its called "banging". You move price with mostly spoofed orders) 3. They do so in secret The effects you see on the other pairs are just arbitrage traders at their finest.....

At this point, this is an abandon mission. Not a nice welcome I got here, not entirely what I expected. Didn't expect I'll be arguing how the the market works.

I'm replying to you because I'm curious. So those articles affect your everyday trading how?

Do you know the difference between the quotes you see on your trading platform Vs the benchmark rates?
  • #63
  • Jan 14, 2022 11:04am Jan 14, 2022 11:04am
I must confess when I saw you start this thread, I thought this might get interesting.

I would join in by asking you a question, When you open a trade in the forex market, who is ultimately on the other side of that trade ? It's nothing like the stock market for example. Somebody (or a number of organizations) has to provide liquidity to the market, in return for which they get access to volume/order data (and other perks) that retailers will never see.

So if you consider that these liquidity providers end up with a position/exposure that from time-to-time they need to unwind..... how would they do that ?

If you do a little research into those questions, you might question your own theory about the market being random.

Just my viewpoint, and good luck with your journey !
  • #64
  • Jan 14, 2022 11:15am Jan 14, 2022 11:15am
Quoting rogerha
I must confess when I saw you start this thread, I thought this might get interesting. I would join in by asking you a question, When you open a trade in the forex market, who is ultimately on the other side of that trade ? It's nothing like the stock market for example. Somebody (or a number of organizations) has to provide liquidity to the market, in return for which they get access to volume/order data (and other perks) that retailers will never see. So if you consider that these liquidity providers end up with a position/exposure...

Great sir lead me to question my theory I'll answer your question too. And by the way, I didn't present any theory here, it's a fact on how things work.

Ok so here it goes.

Same as fish market, people don't go around ports looking to trade their dollars for specific kind of fish, they prefer to go to one person and find that fish they want. The person is a market maker, he buy all kind of fishes from boats to make a fish market.

Now how does the fish market maker manipulate fish prices just to rob his customers?
  • #65
  • Jan 14, 2022 11:21am Jan 14, 2022 11:21am
Does he not adjust his prices according to supply/availability/demand/competition ?

If he has too much of one type of fish that he needs to get rid of, does he not drop the price ?
  • #66
  • Jan 14, 2022 11:37am Jan 14, 2022 11:37am
Quoting captalTrader
{quote} At this point, this is an abandon mission. Not a nice welcome I got here, not entirely what I expected. Didn't expect I'll be arguing how the the market works. I'm replying to you because I'm curious. So those articles affect your everyday trading how? Do you know the difference between the quotes you see on your trading platform Vs the benchmark rates?


I'll respect your original intent..

Research "spoofing" and how it may affect the retail trader..

Per your welcome, I don't think I've been hostile. You said the FX markets are exclusively utilitarian not speculative and such, have no figures who manipulate it, right? Someone countered with some facts; you dismissed them. I simply suggested that we should not ignore that information...and why.

Maybe just take it we're all ignorant; and you could add some value by helping us see the market how we should?
  • #67
  • Jan 14, 2022 12:55pm Jan 14, 2022 12:55pm
Quoting captalTrader
{quote} Who are the sharks? Is is something you grabbed around these forums or its a fact you can prove. Do you know how the markets work really? Besides the marketing crap found on forums like this?
Hi. Whoever is stop hunting does the rest us much as they can. Natural law is the only thing that works 2+2=4 and this is a mathematical issue. do you see numbers? so there it is. The difficulty is time dimension that also has a play and by mastering time & price it is possible to be 100% accurate, not easy.
POSTMASTER
  • #68
  • Jan 14, 2022 1:00pm Jan 14, 2022 1:00pm
Hi CapitalTrader,

I hope you will continue to share what you're working on. As a trader that is always interested in what other traders are doing, I have an interest in you proceeding. We all will never all agree on the finer aspects of the market, but we all have a right to our views & commits, but certainly shared in a respectful manner.

Just my views & nothing more.

Best of trades to you & your future success with your project.
____________________________________________________
  • #69
  • Jan 14, 2022 1:04pm Jan 14, 2022 1:04pm
Quoting rogerha
Does he not adjust his prices according to supply/availability/demand/competition ? If he has too much of one type of fish that he needs to get rid of, does he not drop the price ?

Yes supply and demand determine prices not him, that's why if it was in his control, prices wouldn't move at all, finding customers quickly(Liquidity) is his goal, that's why he rather seat when customers are low(low liquidity). It's a risky and competitive market. If he have leftovers, he will have no choice but to sell for a loss....unless if he collude with other market makers to fix prices to his advantage (manipulation) so that he minimize his risk.
  • #70
  • Jan 14, 2022 1:28pm Jan 14, 2022 1:28pm
Quoting Thoughts
{quote} I'll respect your original intent.. Research "spoofing" and how it may affect the retail trader.. Per your welcome, I don't think I've been hostile. You said the FX markets are exclusively utilitarian not speculative and such, have no figures who manipulate it, right? Someone countered with some facts; you dismissed them. I simply suggested that we should not ignore that information...and why. Maybe just take it we're all ignorant; and you could add some value by helping us see the market how we should?

Misunderstanding may have happened. Saying Forex market purpose or design is completely utilitarian is stating a fact, it's not my belief or theory but what it is.

Now I don't remember dismissing that it's also speculative because only less than 20% is speculative and which is also a fact not a theory or belief.

If the fact I dismissed about manipulation was those articles, yes I dismissed them on a point that, the banks hunt retail traders stop losses, with a purpose of making the lose their speculative trades, I asked, why would market makers want to put any liquidity out of business,no matter how small they're? They actually need those 0.01 lot trades to keep coming in order for them to be in business.

Now the manipulation scandal, yes anyone would want to minimize their risk to zero even if it means breaking the law sometimes, people are naturally greedy. But confusion is ,how do this manipulations happen, how do they affect a regular speculator?

First why would a market maker want to manipulate prices? Because... they have too many Dollars they bought at 1 EUR each expecting to sell them at 1.2 EUR each... But now the market says no one want to buy dollars anymore so those who want to buy them offer to buy for 0.90 EUR... Oh my!

How would they now manipulate prices? By colliding with other market makers to make offers, fake offers to buy Euros at a better price or even profitable prices of 1.1 euro. Now this would take a lot of effort but eventually the demand will change, now people will also offer to buy at that prices too while the Banks will drop their offers.

There! That's how manipulation happens.

Now I ask... Where are stop losses there? Where are fake candlesticks or fake support levels?
  • #71
  • Jan 14, 2022 1:35pm Jan 14, 2022 1:35pm
Quoting acetrader
Hi CapitalTrader, I hope you will continue to share what you're working on. As a trader that is always interested in what other traders are doing, I have an interest in you proceeding. We all will never all agree on the finer aspects of the market, but we all have a right to our views & commits, but certainly shared in a respectful manner. Just my views & nothing more. Best of trades to you & your future success with your project. ____________________________________________________
Thank you for a bit of positivity, I'll certainly share every progress and ask for inputs

Good luck to us all
  • #72
  • Jan 14, 2022 4:18pm Jan 14, 2022 4:18pm
Quoting captalTrader
{quote} Yes supply and demand determine prices not him, that's why if it was in his control, prices wouldn't move at all, finding customers quickly(Liquidity) is his goal, that's why he rather seat when customers are low(low liquidity). It's a risky and competitive market. If he have leftovers, he will have no choice but to sell for a loss....unless if he collude with other market makers to fix prices to his advantage (manipulation) so that he minimize his risk.
And if he had to fulfill that liquidity no matter whether he thought the prices were favourable or not ? Surely at some point he has an exposure ? How does he mitigate that exposure, he can't, he has sold his fish. That is not Forex, the MM's will get their money back, and then some
  • #73
  • Jan 14, 2022 4:22pm Jan 14, 2022 4:22pm
Quoting rogerha
{quote} And if he had to fulfill that liquidity no matter whether he thought the prices were favourable or not ? Surely at some point he has an exposure ? How does he mitigate that exposure, he can't, he has sold his fish. That is not Forex, the MM's will get their money back, and then some
I'm so sorry but I totally lost you there
  • #74
  • Jan 14, 2022 4:24pm Jan 14, 2022 4:24pm
I have to admit, I might have came as disrespectful or arrogant, even the main article my wife didn’t approved of it because according to her, it will not appeal to older generation readers, it will come as disrespectful, and I didn’t listen.

To be honest, I didn’t anticipate that I’ll be here arguing about how the market works the core basics of the market.

My observation now is that most of people here don’t even understand how actually the market work; they however know a lot about the speculative part of it and of course the marketing part of it that is taught in mainstream.

I’ll try to explain for a 10 year old how this thing actually work, then people will decide which version of understanding they’ll run with or that make sense to them and make them sleep better at night.

Ok so I will break down the forex market in two parts, First it’s the main part where everything happens, where the actual price movements are made and the other small part of it which is the speculators part where retail traders operate.

So main part is where big companies operate, by operate I mean, an American company want to buy 1 billion worth of particular business in Europe, so they’ll need to exchange their dollars to EUROs, how they going to do that?

They’ll have to sell Dollars for EUROs, they’ll need someone who also need 1 billion dollars to exchange with their Euros, they can either put adverts on weekly magazine or find a company that specialize in buying and selling currencies, that company is called a market marker or liquidity provider, now this company and the market maker will meet at the market to do this transaction, Market maker will offer to sell 1 billion US dollars worth of Euros for a price of 1.1 billion Dollars.

If the company agrees then deal is done at 1.1 billion USD for 1 billion Euros. On your screen you will see your EURUSD quotes being updated to 1.1 billion USD for 1 billion EUROs. And this process happens every millisecond the entire trading day.

Now there are a lot of market makers who will be competing for this company’s business, so they will offer to sell them EUROs at a slightly cheaper price, and that’s how spreads fluctuate. The price you see is the last price at which a successful exchange was made.

Now this company doesn’t care at what price this transaction are being made as long as they’re successful on time and cheaply, they do not look for support or Fibonacci levels to make these transactions.

This is how 80% of the time forex market operates, as a service, there to facilitate these economic transactions.

I left the spread part on purpose, but simply put, spreads is how market makers make their money. It’s the markup.

The speculation part most of you know it very well how it works I’m sure.

The only part missing I think is, where does your 0.01 EURUSD trade go when you click that buy… well same thing, the market maker give you EUROs for your USDs expecting to give someone else those same USDs for another EUROs.

The market maker takes the risk of buying USDs and later USD price fall, then they’ll have to sell USDs they now have at a loss. It’s a risky business
Holding your trade mean you’re waiting for your EUROS to be worth more than you paid them for so that you will sell them back to the same or another market maker whose willing to buy them from you at a profit, if there is no market maker who will to do so then slippage occur or off quotes will happen when trying to close the trade manually.

Simple right?
  • #75
  • Edited 5:15pm Jan 14, 2022 4:35pm | Edited 5:15pm
Yep... Simple Good luck with your journey fella, have a good weekend. It's just 'The market', I am not sure that Market Makers take irrevocable risk.......... maybe the flaw in your thinking.

Take care.
  • #76
  • Jan 14, 2022 5:13pm Jan 14, 2022 5:13pm
Markets have always been rigged. Cornering commodity traders was normal begining last century. The average guy did not have access to trading but now banks have made it possible as Technology comes into play. In the 80s Barclays bank had a round table with traders for each pair and ibm computers where on the go. Comunication between banks to wipe smart investors, big money. Singapur london NY etc. World has changed and a round table is not but AI that has information of each trader: positions, balances and leverage. The aim is to wipe small accounts so people keep pumping 25,50,200$ constantly, adicted good clients based on hope (mayority). The guy who has 10K is not targeted, he will become smaller by unskilled. By the time he thinks he gained experience he is another 25/200$ gambler. If he happens to be smart, AI will target him personally. Retailers only represent 10%. Big companies do not exchange currency but when price is good as oversea banches use local currency. reservoirs can wait. Your EA will win a limited period till AI decodes your settings. Why is it we must all use mt4/5 and some other approved platform. Its a hub. There is one only institution controling the whole market in possesion of mega processor though shareholders will be several. There are very few traders winning on a constant basis for a long period and still have not seen a single one proving it, say with a simple TE. These traders have come out with their unique system, not TA, not EAs. You will see guys forcasting quite well but they are diferent AI employees getting reports where the price will go both ways just to confuse. I have 22 years trading and this is how i see it. You can beat the market with a unique system based on natural law 2+2=4 and it is very simple when you know it.
POSTMASTER
  • #77
  • Jan 14, 2022 5:25pm Jan 14, 2022 5:25pm
Quoting rogerha
Yep... Simple Good luck with your journey fella, have a good weekend. It's just 'The market'. Take care.
Where the money is going how?

if someone buy an car for 1000$ then over a period of time the car's value is 500$ when they decide to sell it.

We say where their money went?
  • #78
  • Jan 14, 2022 5:36pm Jan 14, 2022 5:36pm
Quoting captalTrader
{quote} Where the money is going how? if someone buy an car for 1000$ then over a period of time the car's value is 500$ when they decide to sell it. We say where their money went?
You are not comparing apples with apples.

If you could take a £1m position long on behalf of a client knowing you can see an £800k volume short to a £2m liquidity pool of long stops, and you had the power to make that happen, would you take the client trade ?
  • #79
  • Jan 14, 2022 5:38pm Jan 14, 2022 5:38pm
Quoting captalTrader
{quote} Where the money is going how? if someone buy an car for 1000$ then over a period of time the car's value is 500$ when they decide to sell it. We say where their money went?
If i buy all cars i will push the price up. You will have to buy my car for 1500$ or walk
POSTMASTER
  • #80
  • Jan 14, 2022 5:40pm Jan 14, 2022 5:40pm
Quoting rogerha
Yep... Simple Good luck with your journey fella, have a good weekend. It's just 'The market', I am not sure that Market Makers take irrevocable risk.......... maybe the flaw in your thinking. Take care.
You think Forex market makers are gods? Doing perfect business without risks?

You actually believe there's riskless business?????

And I'm the one with a flaw thinking?

My goodness how many times do I have to say this... It's not my theory, it's facts!
1 trader viewing now