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Forex - A negative sum game for losers

  • #681
  • Nov 7, 2023 1:54am Nov 7, 2023 1:54am
Quoting Tom81
Trading is business just like any other business. If you want to become successful attorney you have to go to law school, take bar exam and then practice law for years if not decades before having any chance of becoming good lawyer. Why would such competitive field as financial markets be any different? People have an illusion of easy money waiting for them around the corner. If it were so easy, we would have hundreds of millionaires on this forum by now.
You told it right! Even you know even people who are trainers are mostly losers by the end of the day. It’s not a concrete truth but it’s true actually.
  • #682
  • Nov 7, 2023 2:06am Nov 7, 2023 2:06am
Quoting TudorIoan
{quote} Zippia: “Day trader demographics and statistics in the US”, cited February 2023. (Source) WorldFinance: “The changing face of trading”, cited February 2023. (Source) MyTradingSkills: “15 Mind Opening Day Trading Statistics”, cited February 2023. (Source) DayTradeReview: “Day Trading Statistics-10 Interesting Facts”, cited February 2023....
This is how dumb you are: You are arguing with yourself.
Congratulations ScalaFX for coming out of the closet!
  • #683
  • Nov 7, 2023 4:41am Nov 7, 2023 4:41am
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.
The statement implies a zero-sum perception of trading and highlights the speculative nature of the activity. It underscores the importance of realistic expectations and embracing the inherent risk associated with financial markets.
  • #684
  • Nov 8, 2023 2:00am Nov 8, 2023 2:00am
Quoting Darsh1
{quote} The statement implies a zero-sum perception of trading and highlights the speculative nature of the activity. It underscores the importance of realistic expectations and embracing the inherent risk associated with financial markets.
True about perception. But even mathematically...
1. It's not a negative-sum because sometimes broker's reports sounds like 90% of the retail clients are losing money;
2. It's a negative-sum because 90% of the retail clients are losing money all the time, (around 90% on average)
Simple.

1. Is because the people-market-time equation goes in terms of volumes, not individuals, so broker/market can have occasionally 1 winner and 400 losers ...and this is still a zero-sum game;
2. But it's a shitty negative-sum business because you never see statistics like the opposite, 400 winners and 1 loser ...which may happen as well in a fair game. In fact, you never see peaks more than 30% winners. (winners may peak at 30% but they stay around 5% on average)
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  • #685
  • Nov 8, 2023 4:38pm Nov 8, 2023 4:38pm
Thank you for holding the line, TudorIoan.

Readers see the facts here on my thread. If they believe they know better, they will learn it the hard way. They will lose time, money, maybe even more like friends and family....we can warn them, we can explain how they get fleeced in detail, but they still will act against their very own interests.

Retail forex (like MAGA or supporting Trump) is a negative sum game for losers.
  • #686
  • Nov 8, 2023 5:28pm Nov 8, 2023 5:28pm
Quoting HudithePfupf
Thank you for holding the line, TudorIoan. Readers see the facts here on my thread. If they believe they know better, they will learn it the hard way. They will lose time, money, maybe even more like friends and family....we can warn them, we can explain how they get fleeced in detail, but they still will act against their very own interests. Retail forex (like MAGA or supporting Trump) is a negative sum game for losers.

Hi Hudith

You seem a reasonable person and seem to be trying to explain the reality of forex RESULTS to retail traders.
The result facts are undeniable.

However, and imho only, I believe the reasons given here for the end loss results of retail trading is not on target when it is suggested on this thread that it is

The s preads, commission, slippages, platforms freezing etc, are what causes a trader to lose, or will be THE MAIN factor in their losing.


The closer-to-reality reason that could be explained to all traders for their losing is that

A trader will always lose if they are on the wrong side of the order flow (price direction).
That is the reason as I see it, not the cost-of-doing-business s preads, commissions etc.

How a trader works out how to consistently be on the right side of the order flow is the challenge each trader faces dealing in the, I believe, segregated retail arena of forex trading (ie we are not trading in the interbank/tier real game arena).

Retail brokers would either have their own in-house liquidity provider/s or they would pool retail trades into a larger but lower level Liquidity Providing group
(who likely rebate brokers for retail trades uploaded to them, if the broker is NOT always in-house B-booking).


If a trader has issues with a Broker then they should change brokers immediately imo. To a Regulated On-Shore Broker
In AUS no broker I reckon would fool around here with the ASIC regulator and risk their licence,
as HAS happened to some brokers here and therefore ruin their own money making business chances.


If a trader is using an Unregulated Off-Shore Broker to achieve a 1:1000 leverage etc for a smaller account well I can understand their reasons for doing so.

BUT I would highly recommend they stop & change immediately if that is the case and their a/c seems to continually keep getting wiped out unexpectedly
(ie not because they made a poorly timed or directioned trade).


The reasons for winning or losing in the retail environment are far wider imo than just the s preads & commissions (and the zero/negative sum situation).

All the best Hudith, as you seem well controlled emotionally and can put real facts out there of what a retail trader might expect in trading forex.

Just the reasons WHY retail traders lose we will probably differ on.
  • #687
  • Nov 8, 2023 8:51pm Nov 8, 2023 8:51pm
If you have traded currencies for a long time and have not been able to be profitable, consider changing to a different instrument. Stocks, futures, even stock/index options (with just PUTs/CALLs and no difficult strategies). Start by looking at the charts with the goal to be able to consistently predict even short term directions for that instrument. When you can do that, you will make money.

If you want to stay with currency trading, again, you have to be able to consistently predict short term direction, so you have to spend time with the charts in such a way as to do that (i.e., indicators, in my opinion). Because if you keep doing what you're doing and you've been losing money doing what you're doing, you need to do something different.

Just my $0.02 worth...
  • #688
  • Nov 10, 2023 12:46am Nov 10, 2023 12:46am
Quoting TimeTells
{quote} Hi Hudith You seem a reasonable person and seem to be trying to explain the reality of forex RESULTS to retail traders. The result facts are undeniable. However, and imho only, I believe the reasons given here for the end loss results of retail trading is not on target when it is suggested on this thread that it is The s preads, commission, slippages, platforms freezing etc, are what causes a trader to lose, or will be THE MAIN factor in their losing. The closer-to-reality reason that could be explained to all traders for their losing is...
BTW, the Australian financial regulator ASIC on its trader information site suggests that trading CFDs is riskier than gambling on horses or going to a casino...
Just sayin'...
Member
  • #689
  • Nov 10, 2023 1:36am Nov 10, 2023 1:36am
Quoting TudorIoan
{quote}
BTW, the Australian financial regulator ASIC on its trader information site suggests that trading CFDs is riskier than gambling on horses or going to a casino...
Just sayin'...


A very good point TI.
Imagine going into a casino (or racecourse) with $1000 and asking the Pit Boss to extend to you 1:500 leverage (wink).
The ASIC rambo style interventions in 2021 also shut down all Binary Option trading firm brokers here in Aus. Gone.
And they set limiting behaviour on CFD's as well (1:30 max leverage on the forex majors, and negative balance protection as well).

- - -
https://asic.gov.au/about-asic/news-...or-five-years/

ASIC found that the product intervention order has been effective in reducing the risk of significant detriment to retail clients resulting from CFDs. For instance, ASIC observed during the order’s first six months of operation:

  1. a 91% reduction in aggregate net losses by retail client accounts (from $372 million to $33 million aggregate net loss per quarter on average)
  2. 51% fewer loss-making retail client accounts per quarter on average
  3. an 87% decrease in margin close-outs affecting retail client accounts per quarter on average
  4. an 88% reduction in negative balance occurrences for retail clients per quarter on average.


- - - -

And here's what a winner at a racetrack looks like from last Tuesday's Melbourne Cup.
While the 2nd pic might be what loser's look like after the big Cup

.

Attached Image(s) (click to enlarge)
Click to Enlarge Name: Melbourne Cup betting winners.jpg Size: 366 KB
Click to Enlarge Name: Melbourne Cup betting losers.jpg Size: 533 KB
  • #690
  • Nov 16, 2023 2:13pm Nov 16, 2023 2:13pm
If you could win in forex long term.

Why is there not a long term consistant signal providers ?
  • #691
  • Nov 16, 2023 2:22pm Nov 16, 2023 2:22pm
GIVE ME EVIDENCE.
  • #692
  • Nov 23, 2023 2:31am Nov 23, 2023 2:31am
The fact that only 1.6% of day traders are consistently profitable indicates that day trading is challenging. It requires a deep understanding of the markets, effective strategies, discipline, and the ability to manage risk. Successful day traders are often a select group with refined skills.
  • #693
  • Nov 26, 2023 5:36pm Nov 26, 2023 5:36pm
Quoting HudithePfupf
As as starting point, this is a good summary...
This thread is full of good information about why day trading is stupid, but it doesn't offer much evidence that it is the foreign exchange market's fault.

Day traders of stocks are also mostly losers. Commodity futures too.

Most people actually do make money investing in stocks, but most people don't day trade.

And the foreign exchange market is NOT a negative sum game because the spreads and commissions don't disappear, they go in the brokers pocket. It is a 3 participant game.

So, is forex a zero sum game for losers, or are loser day traders just attracted to forex?
  • #694
  • Nov 26, 2023 6:36pm Nov 26, 2023 6:36pm
Quoting GiuseppeN
The fact that only 1.6% of day traders are consistently profitable indicates that day trading is challenging. It requires a deep understanding of the markets, effective strategies, discipline, and the ability to manage risk. Successful day traders are often a select group with refined skills.
but 1,6 % is a lot who wins consistent. think about same in pokergames, nothing different. computer games playing people, nothing different,.....

so nothing bad with this number, just normal number in such a normal market.
  • #695
  • Nov 27, 2023 12:42am Nov 27, 2023 12:42am
Quoting GiuseppeN
The fact that only 1.6% of day traders are consistently profitable indicates that day trading is challenging. It requires a deep understanding of the markets, effective strategies, discipline, and the ability to manage risk. Successful day traders are often a select group with refined skills.
Quoting Trader191
{quote} but 1,6 % is a lot who wins consistent. think about same in pokergames, nothing different. computer games playing people, nothing different,..... so nothing bad with this number, just normal number in such a normal market.
Except that the 1.6% could be just a number which doesn't always mean the same particular group of persons in the long run.
Quoting Velarcus
{quote} So, is forex a zero sum game for losers, or are loser day traders just attracted to forex?
Most definitely, losers are attracted to gambling and Forex. It just happens that many of them are retail daily traders.
Member
  • #696
  • Nov 27, 2023 1:08am Nov 27, 2023 1:08am
Quoting TudorIoan
{quote} {quote} Except that the 1.6% could be just a number which doesn't always mean the same particular group of persons in the long run. {quote} Most definitely, losers are attracted to gambling and Forex. It just happens that many of them are retail daily traders.
true, but then 1,6 % is not consistent profitable. consistent for me is with very low standard deviation you do for 10 years very good or good results.
difficult to guess how many are like this. if you do step by step and slow it could be some, but reality is who is doing it or even know how to do. most want get rich fast (do it in 20 or 30 years is much to long for most) and so many need to fail , and some just get lucky and think they got it because of they was better and not luckier.

i would also call a gambler never a trader, but anyone defines different. anyone who cant tell me what he would have earned in last 1000 trades with this setup he trades at the moment is called a gambler in my definition.
  • #697
  • Nov 27, 2023 1:17am Nov 27, 2023 1:17am
Quoting Trader191
{quote} true, but then 1,6 % is not consistent profitable. consistent for me is with very low standard deviation you do for 10 years very good or good results. i would also call a gambler never a trader, but anyone defines different. anyone who cant tell me what he would have earned in last 1000 trades with this setup he trades at the moment is called a gambler in my definition.
true, but then 1,6 % is not consistent profitable. ...that's why I said in the long run. But here it becomes relative...
Ok now, 1.6% are winners for say, 10 years (upward slope growing account), ...who can possibly claim that this information is accurate??
Member
  • #698
  • Nov 27, 2023 1:24am Nov 27, 2023 1:24am
Quoting TudorIoan
{quote} true, but then 1,6 % is not consistent profitable. Ok now, 1.6% are winners for say, 10 years (upward slope growing account), ...who can possibly claim that this information is accurate??
nobody know for sure. only some traders can do this. brokers cant know, because people can have many accounts with different brokers, and winner in one broker are maybe loser in other broker.

also you never know if this person is a big or small winner or loser. he can have 1 million and lost whole account of 10.000, so is total small loser (but by looking at only this one account looks like big loser), maybe even winner with other accounts or job or other income. and other trader did make 500% and did go from 100 to 500, so he won less then need for living and has nothing on end (without maybe other income).
without a complete living situation (tax, all accounts, all income and costs) you never know if someone is a loser or winner, a good or bad trader, because the account should be connected to the whole living situation with risk and win structure (depends on the experience and how big is trading the main source of income).

so you are right, calculating with missing full informations is useless and brings wrong results from wrong input.
  • #699
  • Nov 27, 2023 1:38am Nov 27, 2023 1:38am
Quoting TudorIoan
{quote} true, but then 1,6 % is not consistent profitable. ...that's why I said in the long run. But here it becomes relative... Ok now, 1.6% are winners for say, 10 years (upward slope growing account), ...who can possibly claim that this information is accurate??
I am 0% consistently profitable in the negative
  • #700
  • Nov 27, 2023 2:07am Nov 27, 2023 2:07am
Quoting Trader191
{quote} nobody know for sure. only some traders can do this. brokers cant know, because people can have many accounts with different brokers, and winner in one broker are maybe loser in other broker. also you never know if this person is a big or small winner or loser. he can have 1 million and lost whole account of 10.000, so is total small loser (but by looking at only this one account looks like big loser), maybe even winner with other accounts or job or other income. and other trader did make 500% and did go from 100 to 500, so he won less then...
Nice relative stuff, thank you ! That's why "they" invented the standard deviation, to avoid being caught in such sophisticated traps
FX is in fact a 50-50 game in the long run so, at least theoretically, there are no winners in the long run. Simple math.
But my EA contradicts me, it continuously running a stupid strategy since 2014 ...but I don't trust it, I trust math!
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