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Forex - A negative sum game for losers

  • #641
  • Edited 5:19pm Oct 16, 2023 4:58pm | Edited 5:19pm
Quoting TudorIoan
Ok guys, why can't we keep a decent argument here ?! First: We don't talk unique special geniuses like many of you... We talk statistics Then: it's very important HOW you make those 500K. - Technically, one can easily make 500K out of only 6 consecutive winning trades starting with 100K betting/risk one third per trade. (1.33^6*10⁵) - Or, make 400K in only two bets - all in, only two shots, starting with 100K. (2²*10⁵) What the fck is that ?!? Proves what ? Now let's talk about being "consistent on short term": - Like making 500K in...
It is an interesting question where I also thought about before. I know some traders on NYSE who are making $30000-60000 Dollars per day trading solely the open if it goes good for them. The problem they have is just the order size. When they use more money they start to move the market. So there is a natural barrier to earn more. Of course you also have losing days so on avg. you earn about $250000 per Month - even when you would have more money, it wouldn't help anymore.

On Forex you start to move the market on >100 lot size, so $10000 per pip. When you earn 20 pips per day on avg. you make $200000 dollar per day, max, so in best case $4 Mio per month. I know one trader he is trading few currencies with kind of grid system. He earns about $12-16 Mio per year if it goes good. So you have a natural barrier as a non-market maker and that is when you start to move the market.

As a counter trend trader you can invest more than 100 lots for example and it also plays in you hand if you start move the market due to your volume. The problem which occurs when you invest much more than 100 lots is that you need, if it goes shitty sometimes, 2-4 pips to sell your whole position in 10-30 seconds. So you move the market against your position 2-4 pips (you can compare that to 2.5-4.5 pips spread on GBP/USD) and that can bring you in big trouble if you go only for 10 pips for example. So also for scalper is a natural limit, even on forex but it is higher than on NYSE.

There is one other aspect which put your foot automatically on the brake at a certain point and that is the probability of black swan event. The problem with market is: You can never be sure to 100%, no matter how save it looks like.

I give you an example: When you buy in a crises 10 avg. houses in USA for $1,5 mio dollar you can be to 100% sure you can sell it next 5 years with a huge proft - except USA will be bombed into the ground etc. (so very unlikely).

On markets it is different. Even if you have inside information (and use it which is illegal), for example, A huge company takes over a small company etc. you cannot be sure that the deal will work out because they can cancel it anyway before official release. So you even lose money because other insiders also bought shares before and have to get rid of them when the deal will not work out. So even here and even with huge money you never can be sure to earn money and still have the possibility to lose money.
That's one reason why investing on trading markets is always limited.

You can overcome that problem with starting only with a $500 dollar account and let it grow, always full risk. But you can be sure: If it goes >1 Mio Dollar in 18 Month you will automatically stop to take full risk because you could lose 500000-700000 Dollar in few days on full risk. So it is not so easy and less complex than you may be think. I'm not yet there so I can only assume problems you get if you are so successful on the market but I think it goes into that direction.

So to earn 1 Billion Dollar with trading is possible but it will take you probably 30 years or even more, just because of market restriction.

So if you ask me: Can you earn money with trading? I would say yes but it is different than you think. The money has to come from another trader/institution. A good example with a bad trending entry is the net long positions. If 95% of the traders are long the chart probably looks awesome but it will not help -because too many people are already long. No matter how good the chart looks now: Upside is limited due to that fact.
  • #642
  • Oct 16, 2023 10:57pm Oct 16, 2023 10:57pm
Quoting DonPato
Trading is and always will be a ZERO SUM game. When you have completely understood the meaning of that phrase you will see that your expectations for trading (as evidenced by you above diatribe) are completely misplaced. Think of it this way... There is a reason the call this activity "SPECULATING". Put you big boy panties on and deal with it.
Yes bro! But the fact is that market’s nature makes us greedy and we want to make big amounts by trading forgetting about possible losses. And when we fail to keep our expectation, we become frustrated.
  • #643
  • Edited 3:25am Oct 17, 2023 3:12am | Edited 3:25am
Quoting JackintheBox
{quote} It is an interesting question where I also thought about before. I know some traders on NYSE who are making $30000-60000 Dollars per day trading solely the open if it goes good for them. The problem they have is just the order size. When they use more money they start to move the market. So there is a natural barrier to earn more.
It is an interesting question where I also thought about before. I know some traders on NYSE who are making $30000-60000 Dollars per day trading solely the open if it goes good for them. The problem they have is just the order size. When they use more money they start to move the market. So there is a natural barrier to earn more. Of course you also have losing days so on avg. you earn about $250000 per Month - even when you would have more money, it wouldn't help anymore.
When it comes to grow or just to stay alive, I always wonder why we talk others money as an argument for trading strategy when in fact it's only your account profit/loss rate that matters. It's stupid like those frustrated nobodies who thinks someone is risking billions moving the charts for tenth of pips only for hunting their personal stop loss, duhhh!

On Forex you start to move the market on >100 lot size, so $10000 per pip. When you earn 20 pips per day on avg. you make $200000 dollar per day, max, so in best case $4 Mio per month. I know one trader he is trading few currencies with kind of grid system. He earns about $12-16 Mio per year if it goes good. So you have a natural barrier as a non-market maker and that is when you start to move the market.
1. Grid sys is sort of a martingale, so a black swan (margin call) is maybe waiting around every corner. So in this context, short term daily/periodical winnings are irrelevant as you face bankruptcy every time your crazy system fights the market;
2. Sorry, by a non-market maker do you mean a small retail trader ? Well, it's a common confusion among newbie traders that market maker is someone big enough so he can move the chart significantly anytime he wants or everytime the elephant moves in the room. MM it's just the fkn dealing desk broker, the one who "makes" the market for the retail client so your trading order doesn't even reach the interbank market, sorry to disapponit ya, but you don't swim with the sharks, guys. This broker "creates a market" for you, mostly if you are a small or a constant losing client. So if you buy, a dealing desk broker is the one who takes the opposite side of your position, a sell, so this is the way how you get liquidity by having the broker to trade against you... yeah, that's big fkn market maker! But if you are a consitent winning client the broker wouldn't want to trade agaist you so he will try to hedge by other clients' opposite positon(s).
Point of all this... market is really random for you The retail little fish.
And because a dealing desk broker can balance its losing volumes with other clients'..., it oftenly comes on top ...that's why it's a negative sum ...oh, I bet some of you still don't get that ...never mind

You can overcome that problem with starting only with a $500 dollar account and let it grow, always full risk. But you can be sure: If it goes >1M Dollar in 18 Months you will automatically stop to take full risk because you could lose 500000-700000 Dollar in few days on full risk. So it is not so easy and less complex than you may be think. I'm not yet there so I can only assume problems you get if you are so successful on the market but I think it goes into that direction.
- Why are you mixing argument with sentiment ?!
- If you wanna make 1M in 18 months it doesn't mean you have to go all in - full risk! You only need 3% daily risk (and that's a daily aggregate, not just one position-one trade, 3% it's a daily average!!) So why risk 500K-700K at some point? Are you talking only all in or martingale style here ? i don't get it...

So if you ask me: Can you earn money with trading? I would say yes but it is different than you think. The money has to come from another trader/institution. A good example with a bad trending entry is the net long positions. If 95% of the traders are long the chart probably looks awesome but it will not help -because too many people are already long. No matter how good the chart looks now: Upside is limited due to that fact
- As a retail trader it doesn't really matter how much money or who's money you're playing with. We're talkin' only the retail.
- First, broker limits your volumes by your initial contract... well, overall you kind of mixing interbank market with particular broker business ...and add sentiment ...and add losers' gossips on forums ... I guess you need more experience to understand retail trading before mking considerations about what's really wrong here
Member
  • #644
  • Oct 18, 2023 2:49am Oct 18, 2023 2:49am
Quoting JackintheBox
{quote} It wasn't luck because I checked it before I started to trade with backtests and later I researched the difference between my system and pure roulette. But you are correct, it wasn't deep enough. I really wanted to know the difference between just "luck" and a system that works. After the "shock" I stopped trading because I saw situations where I would have lost a lot of money - which never occured during these 10 months. So I had to dig deeper because I did not wanted to trade...
Still, those 10 months could be just luck... the comparision with flip-the-coin game or the roulette game is not valid since in trading anyone can stick to one particular side of a high standard deviation for a longer period of time then in the roulette game. There's the trick. You are being fooled by the apparent difference between trading and roulette although they are the same 50-50 games. There's no fundamental difference.
See, if you win 60 times on red and lose 40 times on black tonight it doesn't mean you can beat the odds. It only means you just had a lucky night. But the game still stays 50-50. I guess you are very well aware that you're not a skillful roulette player, you're just a lucky roulette player.
Although trading is a 50-50 game as well, in trading you can stick just to one side of a high standard deviation for a longer period of time, ...we call that: "trend is your friend ...until it isn't!". (here, trend could mean any other strategy)

Also in trading, you can "cheat" those 50-50 odds by grid systems. Grid systems only pushes the negative outcome further in time and the further it gets it piles up the risk, more and more. That's how you can win "consistently" several years in a row ...until one day. If someone thinks this is a brilliant way to trade or he has special trading skills, he's either an idiot or a liar.

That's why the comparision of some any particular winning streak, or lucky night, or lucky period of time in trading (it can even last for years with a grid system) with the roulette game is not valid if you want to prove that FX market is not random. They are the same. It doesn't make trading more predictable than heads-or-tail game.

Technically, the odds comes in 50% for red and 50% for black, right ? And also 50% for bulls and 50% for bears ...all smart skillful traders!
If you play this long enough you get a 50-50 outcome.
But if you consider a proof that a particular winning streak or a profitable period of time in trading to conclude that a skillful trader can beat those odds, you are wrong.
This is one of the most common mistake traders do
Member
  • #645
  • Oct 18, 2023 6:49am Oct 18, 2023 6:49am
Quoting TudorIoan
{quote} ... If you play this long enough you get a 50-50 outcome. But if you consider a proof that a particular winning streak or a profitable period of time in trading to conclude that a skillful trader can beat those odds, you are wrong. This is one of the most common mistake traders do
All you wrote, also before, most stuff I know. I know orders from retailers don't get to the real market etc. etc. but that is not the point. I explained to you why market is not random but you dont (won't) understand that part. I don't know why. Randomness means no connection from one second to another but that is not true in the market and you know that. Why dont you want to understand that? May be you want a statistical proof and I can give you that proof but obviously that is not enough for you and I understand that from your perspective but you cannot get another proof than statistically because that IS the market.

May be you are searching for for the 100% waterproof chance. Well...I can tell you that doesn't exist and that is one reason why you cannot make $1000 Dollar into 1 Million in one year but you can make 60% per year, yes, but not like you may be think. May be you want to prove market is random, than good luck but you will not succeed because you obviuosly miss the part that markets move due to volume and that is not random .

You said why do we talk about other trader's money. Well... my performance seems to be irrelevant because it is random you said. But I know people who earned that much - constantly and why they don't earn more. And of course you can earn money with grid systems but you have to adapt them to the markets. Again, I think your problem is that you are too statistically focused, me too, by the way and it frustrates, I know, if you cannot find the real reason why markets are working and roulette for example does not work - that's why I analyzed that and I found (at least one to two) differences but that work you have to do on your own. It took me years to understand that.
  • #646
  • Oct 19, 2023 12:39am Oct 19, 2023 12:39am
Quoting JackintheBox
{quote} All you wrote, also before, most stuff I know. I know orders from retailers don't get to the real market etc. etc. but that is not the point. I explained to you why market is not random but you dont (won't) understand that part. I don't know why. Randomness means no connection from one second to another but that is not true in the market and you know that. Why dont you want to understand that? May be you want a statistical proof and I can give you that proof but obviously that is not enough for you and I understand that from your perspective...
Jack, I've already said I get your version about what means random. I understand what you are saying: Randomness means no connection from one second to another but that is not true in the market.
Sure is not true in the market. But that doesn't prove that the market is not random on the long run. Even if you flip the coin you can win 10 times in a row, considering that a direct relation form events which apparently makes it non-random.
Sure evrebody enters the market at Fibo61.8% level, or EMA200 level, or S/Rs, or TLs, or BB levels... because they use to work better than 50%!!
Anyone can have a winning streak ...saying, look, ten winnings in a row, so it was't random!
But you realise it would be too easy if the market would be so predictable, right ... everyone would win! And brokers would publish like "60% of our clients are winners " ...instead of the most common: "90% of our clients are losers"
That's why I put a common name on it: trend is your friend! and added: ...until it isn't!

I really appreciate your good tone and good faith! Unlike others, you use arguments, not diatribes.
Member
  • #647
  • Oct 19, 2023 3:16am Oct 19, 2023 3:16am
Thanks for the nice reply. May be we talk about the same aspect but a different meaning.
What I found out is that markets in short term, for example intraday, have some non-randomness. It is not easy to exploit because the spread is so high.

When you talk about long term, do you mean to be successfull with any strategy over a long time (swing, scalper etc.) or
do you mean that markets in long run (let's say for 2 weeks in advance) are not predictable? Here I agree with you. I have a feeling that the longer time period someone predicts market, the more it gets 50/50 because the factors which comes in in next 2 weeks (for example) are unknown etc. and that can make a market more random.

But to get to your thoughts back: What I always wonder, for example with S/R's is that it is true what you say: The only hint we have is that market will probably not just rush through here, it will go up and down from every side, so the only information we have is that market will hover around support and resistance more than the drive before to that S/R's. And yes, here I can confirm, that with only that little knowledge I also don't know how to exploit that.

When you play breakout strategy on S/R's you get whiped out too often due to back and forth (my experience). When you play to go short on resistance and to go long on support the quote of success is higher but when market breaks support, resistance than the market most times goes very strong without looking back and you lose the same amount (same amount = winning amount before going short on res. and long on support) in few trades. So here I agree. You have that prolbem in lots of systems, that is true (problem means that it gets 50/50 again and you make no money).

To be honest, i'm not yet there. What I mean by that, I just did not had the time to analyze that very deeply, for example going short on resistance and test different money - and positionmanagement and also Price Action. But it is on my list. I already tested FIB-Levels.

One thing I found out is, that due to moving the market, in short term (<10 pips) it is better to go with the market, be a trend trader. When you add propper position management you can exploit that. The problem here is the spread: When the spread on 10 pips move is more than 1.5 pips you almost can forget to earn money with that, even if your R:R ratio would be 1.3 : 1 (that means you earn $1.30 in long term and lose $1.00). The reason for that is that the spread is eating up all your performance. That was very frustrating to find out.
  • #648
  • Oct 20, 2023 5:00am Oct 20, 2023 5:00am
Quoting JackintheBox
Thanks for the nice reply. May be we talk about the same aspect but a different meaning. What I found out is that markets in short term, for example intraday, have some non-randomness. It is not easy to exploit because the spread is so high.
About arbitrary spread ...
As you very well must know, an over-the-counter market is not centralized and it only occurs between two parties. Unlike the interbank the OTC have less trade liquidity due to low volume which leads to delays in finalizing the trade and wide bid-ask spreads. On the other hand, a bucket shop can maybe fake that at their leisure ...and profit.
So, many of the FX gamblers trade with those kind of bucket shops and don't even reach the interbank market. Even a fine non-dealing desk broker won't put you on the interbank market unless you prove you're worthy. So oftenly, you only play inside "the house" and only against the house. And if the house freezes up the platform, crazy widens spread or delays execution just because for the moment they couldn't find another schmuck client to match your winning position and so the house must hedge somehow because they're bleeding ...it means you're robbed straightforward. So there's no "zero sum" equation there, because there's no fkn real counterpart, no common pool, no real trade ...the only counterpart is the house who just rigged your fair 50-50 "roullete" game. So the most of the retailers are losing regarless the bet size on the "table".
Can you now see why it must be a "negative"?
Crooked brokers makes it negative
Member
  • #649
  • Oct 28, 2023 7:18am Oct 28, 2023 7:18am
It's sad but I came to the same conclusion that we're are dealing with negative sum game. I wisht it would be "zero" but it's not due to the trading costs. You think you're scalping the market but it's the brokers who're actually scalping you, slowely, bit by bit. In case of forex, the only thing that we can predict really is that there will be a bit bigger diruption in the market after a news announcement (for example NFP, or core inflation rate for example), but that's about it. But good luck with the slippage and whipsawing
  • #650
  • Oct 29, 2023 8:44pm Oct 29, 2023 8:44pm
Just a post here into the ether, not directed to either the fors or against anything or any idea. Essentially just thinking out aloud.


Zero-Sum games.

If zero sum means for “one who wins there is another who loses” (less comms)
Then why should we be fearful or sad, or even to avoid the ‘game’ of trading entirely.
Maybe then just be one of the ones who wins consistently.

If it is zero sum (as they say), and there are consistent losers, then there must (by definition) be consistent winners also.

But who are they, and what if they might actually sit outside the grouping of us mere ‘retail traders’.
And if so, why not then be one of those ones who win consistently.
They can’t hide price movement. It’s on the chart. Where would they hide it.

So if price movement is not hidden,
then what might ‘occur’ in such price movements that has retail traders often trading against the grain to loss.

Further (still just thinking), what if (and just IF lol), each time a retail trader places a trade it is not offset by the broker’s liquidity provider to another retail trader there and then. What might be happening to all those (maybe) buys & sells that have not been offset yet, if that is in fact the case at a point in time.

Just a question a retail trader could ask of themselves, but NOT ask of the industry lol, who don’t really discuss such things.
Just re-deposit to your a/c without question.


So who then might be ‘holding all the retail trades’ both buy & sell and waiting (aggregating) on the zero-sum effect to come into play, minus comms, and why.

There is only one aspect to winning overall at trading that I can see.
And that is if your overall TP is greater than your overall losses.
If a trader could spend time to find how to TP (consistently) and not just chase price around a chart,
then maybe zero sum could become positive sum for that trader.

I'm just thinking out aloud (on a slow Monday morning ) about any ‘zero-sum’ fear or sadness that retail traders might experience.

Is there a light at the end of tunnel.

Because if NOT, then why logically continue trading I would guess.
  • #651
  • Edited 2:27am Oct 30, 2023 2:17am | Edited 2:27am
Quoting TimeTells
Just a post here into the ether, not directed to either the fors or against anything or any idea. Essentially just thinking out aloud. Zero-Sum games. If zero sum means for “one who wins there is another who loses” (less comms) Then why should we be fearful or sad, or even to avoid the ‘game’ of trading entirely. Maybe then just be one of the ones who wins consistently. If it is zero sum (as they say), and there are consistent losers, then there must (by definition) be consistent winners also. But who are they, and what if they might actually sit...
What are you talking about, why don't you spend some time and read the thread before "thinking out aloud", Pete ?
This is not about fear or sadness. It's more about awareness. Actually, the introductory post suggests to show concrete bulshit from brokers.
And it's not about ”a light at the end of tunnel” we've already seen the light ...now it's about fun, eventually trading for fun, which doesn't have to be logical at all, of course.
And stop mentioning short term context to argue for some temporary, illusive, occasionally, magic streaks, "positive sum" ...that's the definition of inconsistency in trading!
And come on, it's never a zero sum game... spreads, wide spreads, comms, freezing, delays, sudden maintenance... they are part of The game, why rule them out ?!
Member
  • #652
  • Oct 30, 2023 2:39am Oct 30, 2023 2:39am
Quoting TudorIoan
{quote}spreads, wide spreads
What are you talking about, why don't you spend some time and read the thread before "thinking out aloud", Pete ? This is not about fear or sadness. It's more about awareness. Actually, the introductory post suggests to show concrete bulshit from brokers. And it's not about ”a light at the end of tunnel” we've already seen the light ...now it's about fun, eventually trading for fun, which doesn't have to be logical at all, of course. And stop mentioning short term context to argue...



You do not trade, imho, within the reality of the markets we all trade in.

You only seemed consumed about the "totality" of how a zillion and one traders all end up even, ie zero-sum, less their comms.

Spreads have NOTHING to do with zero sum as they are only the reference point where your trade price STARTS, not ends
(at which point and only then do you realise a profit or loss)

So MAYBE instead of trying to scare traders into NOT trading, because of the deaded "zero sum" ,
why not embrace and let traders experience & understand the reality OF trading "against the system"

Or you could just keep the zero sum fear factor going as your pet project, ad infinitum, up to you sir.
  • #653
  • Oct 30, 2023 2:57am Oct 30, 2023 2:57am
Quoting TimeTells
{quote} You do not trade, imho, within the reality of the markets we all trade in. You only seemed consumed about the "totality" of how a zillion and one traders all end up even, ie zero-sum, less their comms. Spreads have NOTHING to do with zero sum as they are only the reference point where your trade price STARTS, not ends (at which point and only then do you realise a profit or loss) So MAYBE instead of trying to scare traders into NOT trading, because of the deaded "zero sum" , why not embrace and let traders experience &...
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  • #654
  • Edited 4:17am Oct 30, 2023 3:35am | Edited 4:17am
Quoting TimeTells
{quote} You do not trade, imho, within the reality of the markets we all trade in. You only seemed consumed about the "totality" of how a zillion and one traders all end up even, ie zero-sum, less their comms. Spreads have NOTHING to do with zero sum as they are only the reference point where your trade price STARTS, not ends (at which point and only then do you realise a profit or loss) So MAYBE instead of trying to scare traders into NOT trading, because of the deaded "zero sum" , why not embrace and let traders experience &...
Typical moronic ignorance from you. ...I could tell from your seemingly hypocritical claim of a pretended innocent thinker out loud
Me, consumed ? I've already said here my EA is running in green from 2014. Told you you don't read.
The market and life is full of arrogant schmucks like you, ok, thanks for your money if it is a zero sum...
And why would I try to scare dumb naive hopeful greenhorns around ??? ...we actually need them in "the system" !!!
Incredible, you dummies lose and still defend the industry, this is fkn hysterical

Hey, second thought, forget it, don't read this thread, you won't understand why this game is a negative sum of retail losers anyway
Member
  • #655
  • Oct 30, 2023 3:55am Oct 30, 2023 3:55am
Quoting TudorIoan
{quote} Typical moronic ignorance from you. ...I could tell from your seemingly hypocritical claim of a pretended innocent thinker out loud Me, consumed ? I've already said here my EA is running in green from 2014. Told you you don't read. The market and life is full of arrogant schmucks like you, ok, thanks for your money if it is a zero sum... And why would I try to scare dumb naive hopeful greenhorns around ??? ...we actually...

  • #656
  • Oct 30, 2023 4:27am Oct 30, 2023 4:27am
Cheers Tudor, you are a funny guy


If you are a successful trader yourself then you would also clearly understand all my points now.

Of just how TOTALLY IRRELEVANT this concept or even factual comprehension of any zero-sum
or even negative sum talk IS when thinking about trading.

IRRLEVANT, as in has NO bearing on an individual trader and their own successes or failures.


And you have actually proven this for yourself
As my very case against any of this negative/zero-sum nonsense in regards to whether a trader wins or loses at trading
BY
Becoming a winner yourself in your own a/c.

So I rest my case now Your Honour

(then have a read again later of my thoughts post , and let’s have a metaphorical ale, cheers)
  • #657
  • Oct 30, 2023 12:16pm Oct 30, 2023 12:16pm
Quoting TimeTells
{quote} Spreads have NOTHING to do with zero sum as they are only the reference point where your trade price STARTS, not ends (at which point and only then do you realise a profit or loss) So MAYBE instead of trying to scare traders into NOT trading, because of the deaded "zero sum" , why not embrace and let traders experience & understand the reality OF trading "against the system" Or you could just keep the zero sum fear factor going as your pet project, ad infinitum, up to you sir.
And that starting point is negative. If spread is 1 pip, that means that the moment you enter the market you are not zero but 1 pip under water. So now there's 50% chance that that market will move up 1 pip which makes you flat or 1 pip against you, so you lost 2 pips.

And no SL and TP ratio will help you because by this you're only changing the distance from your starting point. And this changes statistical probabilities of hitting those targets. You always end up with zero plust that negative spread. not to mention additional costs like commision if you have it and overnight fees.

It's anegative sum game, not zero.
  • #658
  • Oct 30, 2023 6:07pm Oct 30, 2023 6:07pm
Quoting YoMoney
{quote} And that starting point is negative. If spread is 1 pip, that means that the moment you enter the market you are not zero but 1 pip under water. So now there's 50% chance that that market will move up 1 pip which makes you flat or 1 pip against you, so you lost 2 pips. And no SL and TP ratio will help you because by this you're only changing the distance from your starting point. And this changes statistical probabilities of hitting those targets. You always end up with zero plust that negative spread. not to mention additional costs like...

Hi Yo,
We are now 33 pages into a seemingly pointless discussion, imho.
Pointless in regards to finally establishing if "Forex and Losing traders" are linked by this negative sum concept.

Now our trade will actually start where our account terminal shows it as a ... price and a start time.
The 1 pip spread etc you mention we each know going in and it is called

“The cost of doing business.”
(ask any shop owner about this before they open their own shop each day)

So negative-sum starting points imo have nothing really to do with any potential profitability in Forex Trading.
Which is entirely down to the trader and when they subsequently exit their trade.
(While comms do add a little to a losing trade and remove a little from a winning trade they are actually NOT the reason imo for any trader
becoming OR being restricted to being a “loser” as the thread title here suggests)

The phrases zero-sum and negative-sum are derived originally from Game Theory.
Not Trading Theory.

Linking the phrases, both zero or negative sum, to LOSING traders is then falling into the realms of being

‘Fooled by randomness’ as Taleb detailed in his lengthy and hard to read book
(and in which many forex traders subsequently misquoted his meaning of the word “randomness” which had more to with datasets being misused than any real or other imaginary experiences of our commonly used word random)

How can I put it about the costs of doing business
Well every business in the world has them.

If WE are trading, even from our home, on a computer,
then the portion of the cost of the electricity bill we will receive for that computer usage can also be considered then as part of a negative-sum aspect to trading.

If a trader can remove any initial fear and anxiety of this negative-sum concept before they even start the trading day (I NEVER think about it, ever, lol),
then they can realise that the reality of trading and the reality of why a trader might lose is

NOT to do with the negative-sum aspect but to do with the fact that
You cannot win at trading if you close your trade at a loss by trading against the current order flow.

And by flipping that around a trader may eventually come to understand that to WIN at trading we must …
Close our trade for TP (Take Profit) when trading WITH the current order flow.

How each trader arrives at that TP scenario will be up to them I reckon (and not the Game Theory, imho).

all the best, trade safe and trade well
  • #659
  • Oct 31, 2023 4:53am Oct 31, 2023 4:53am
Quoting TimeTells
Cheers Tudor, you are a funny guy If you are a successful trader yourself then you would also clearly understand all my points now. Of just how TOTALLY IRRELEVANT this concept or even factual comprehension of any zero-sum or even negative sum talk IS when thinking about trading. IRRLEVANT, as in has NO bearing on an individual trader and their own successes or failures. And you have actually proven this for yourself As my very case against any of this negative/zero-sum nonsense in regards to whether a trader wins or loses at trading ...
Sure, zero-sum or negative-sum it's an irrelevant topic ...as long as brokers are fine.

There's also this fallacy, it's a negative-sum because when the broker is compeled to tell how many clients are losing - it must be public information - data never looks like only 50% are losing. Apparently, that would make it a zero sum game, 50% wins, 50% loses, right?! But there are always more who lose than those who wins. Why is that ?
Well, that's stupid question, because it doesn't really prove anything.
I mean, what if a high roller bets $10,000 a shot and 400 other retail traders just $25 each, all in the same broker's house?
A - if the market favors the high roller, you'll have one winner and 400 losers. So at some point, the report for this particular broker will sound like : "warning: 99,8% of our clients are losing money - disclaimer: trading FX it's a fkn risky business" (still a zero-sum)
B - But if the market doesn't favors the high roller, now you have 400 winners and just one loser (still a zero sum).
But you see, that never happens!!

You'll never see such a broker's report like 99% are winning!! All brokers publish like more than 50% are losing. That's for a FACT.
How the fuck come ?!?
Maybe, as the game goes on, is because when everybody is selling some schmucks must buy. And if there are no schmucks to buy in the market/house at that particular point, the broker must buy it as counterpart with its own money... and that hurts, ...than it's maybe easier to cheat for the broker ...in the end, the house never lose.
But still, that doesn't prove it's a negative-sum. Because they can pretend that high rollers are smarter, not only have better data feeds, and that's why the report still might sound like much over 50% of clients are losing!!

It could be something else. You know, trading FX is a 50-50 game on the long run. It's like flipping the coin, regardless our proofs of "long" winning streaks and "consistent couple of months strategies" and apparently wise experienced non-random shots... all these are nothing but standard deviations.
Now, when you aim for a 20 pips target and put up a -20 pips risk, you actually need say 22 pips from the market and -18 pips where you get stopped out. This is no more a 50-50 game for you because of the spread. Anyone can see that RR is never straight like 1:1 and that's because of the spread. And the low the target is, the worse the RR comes for the client. So obviously for you this is worse than a 50-50 game. Although mathematically 50% means nothing in trading odds, we are not given those even odds in this game at all. And this unbalance comes from the very basic rules of the game!

Sure, maybe zero-sum or negative-sum it's an irrelevant topic ...but why not debate anything ...debate doesn't hurt ...still "NO bearing on an individual trader and their own successes or failures"

Cheers, buddy!
Member
  • #660
  • Oct 31, 2023 5:24am Oct 31, 2023 5:24am
Quoting TudorIoan
but why not debate anything ...debate doesn't hurt
Because it's fucking boring, pointless, and a waste of time.

Whatever "sum" phrase you want to use is merely an argument of perspective and proves a whole lot of nothing. When you actually define the perspective then there's nothing to argue or debate because the fact of the statement (with the correct perspective) will be evidently true or false, and those who can't see the difference between it being true or false aren't worth the time and crayons.
Congratulations ScalaFX for coming out of the closet!
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