Who lost money last week? | Forex Factory

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Who lost money last week?

  • #1
  • First Post: Aug 18, 2007 4:42pm Aug 18, 2007 4:42pm
I just cannot understand who lost money last week.

And we know that trading is a zero sum game, where someone has to loose for you to win.

I can't figure out who lost money last week. from reading forums here, we know newbies who started a week ago made some profits. I started trading couple of years ago and I'm not a professional.

Now, come to think of it, the guys who has millions and billions in hand, the hedge funds and Institutions who hire Ph'd and mathematicians and to top they work like a team with lightning information and super powerful computers.

Will they be stupid enough not to realize what is coming, these guys are market movers....they do and we follow...YET someone has to loose for our gains.

Now carry traders.. even if you do small carry trading..you close out on Monday if you see any bad coming, but last week was whole 5 days of downfall and yet money keep coming in for us to win.

Something is missing here....how could the guys who move the PIPS loose...its impossible...The very market is present due to big guys and say if they had lost all money that would mean..the market will stop functioning.

I think we all are eating government printing press money issued to banks. They do not carry any value until it comes into the market....The market is just representing whats the value of your money.

That would explain why the government pumped billions of dollars into the market and lowered interest rates for banks to borrow more money.

The market just can't keep coming down for ever else it will be the end of civilization ....market will have to go up some day..now if the hedge funds and institutions have lost money..who will make the market go up..the Ph'd's and mathematicians would have being fired long ago..but we know thats not the fact...all data shows..these market movers profits climb like a rocket year after year..take goldmann sacks, citi group ..i never saw any data..showing they are about to go bankrupt...their profits compounds every year it seems.

I think we all are playing into the hands of our respective governments plus big institutions..they just print money and pump into the market and we all have to accept it.

They flood the market with money and drain it in a cycle...in the biggest picture...all it would matter is where do we stand, thats what forex learning is all about.

I would appreciate ANY comment on this...Thanks
  • #2
  • Aug 18, 2007 4:49pm Aug 18, 2007 4:49pm
Well i personally know someone that went long usd/jpy at 118 and got margin called soon after... so.. all the people that thought they're smarter than the market lost money.
  • #3
  • Aug 18, 2007 5:30pm Aug 18, 2007 5:30pm
just watch how many people are going to lose money in the coming weeks.
Take a report.
  • #4
  • Aug 18, 2007 6:00pm Aug 18, 2007 6:00pm
The word is "lose" not "loose."

That being said, it is very easy to see automated trading systems lose if they are based on oversold/overbought indicators.
  • #5
  • Aug 18, 2007 11:36pm Aug 18, 2007 11:36pm
Quoting CateFul
just watch how many people are going to lose money in the coming weeks.

Exactly. Many of those who gained by trading recklessly will continue recklessly next week which may or may not be an entirely different environment. They'll be trading with courageous money--just as dangerous as scared money. I've been through it plenty.

Then there will be some who traded hard, did well, and will resume their normal mode and protect what they earned last week.

Then there will be an even smaller group who traded their normal plan, booked their normal profits and will continue on next week doing the same. Like they always do week after week, month after month, year after year. Turbo and Mike to name a few. The ones who will still be around 5 years from now.

Who lost? If you read the the entire thread about the USD/CAD reversal you'll find people who went long against a steady downtrend and held their positions for several hundred pips until their accounts were gone.

Me? I traded hard, did very well and will probably take the week off and read DiNapoli's book on Fibonacci. Or start to anyway.

All the best for this week coming!
  • #6
  • Aug 19, 2007 2:07am Aug 19, 2007 2:07am
All the bottom-picking longs would have been profoundly smashed this week. A friend of mine was buying at nearly every round number(00) and finished the week 500 pips down.
The agressive, ill-timed shorts with narrow stops would have been smashed also.
I finished the week 340 pips up but anyone going short in the greenback with patience and wide stops was going to do well.
Just one of those weeks that trend riders just love.
  • #7
  • Aug 19, 2007 2:16am Aug 19, 2007 2:16am
Retail stats at Oanda show the yen crosses at 70-85% net long through the entire 2000+ pip downdraft. Ouch....
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  • #8
  • Edited 2:31am Aug 19, 2007 2:21am | Edited 2:31am
Forex is not Truly Zero sum game.........

People actually buy foreign money to buy product made elsewhere....
the demand is there... regardless of the rate, people still have to buy the money to buy things made in other country......

GBP/JPY goes down more then 4000 pip..... it simply mean JPY value raised......

man, now my Government will have to pour in more cash to pay for the loan we took from Japaneses to build our superhighways... and that mean, we wont be buying Sony PS3 allot either because of its price has raised allot....
  • #9
  • Aug 19, 2007 2:21am Aug 19, 2007 2:21am
Quoting Trader KGB
Retail stats at Oanda show the yen crosses at 70-85% net long through the entire 2000+ pip downdraft. Ouch....
You know, somehow i dont know if i should trust these charts from oanda. They almost always tell what the market is doing, Oppositely. (excuse my english)
100% of traders are losers. Just that some win more than they lose!
  • #10
  • Aug 19, 2007 2:23am Aug 19, 2007 2:23am
Trading is not a zero-sum game. Trading Forex however is.

The big guys are the losers here, though just because you took some money from them this week, doesn't mean they lost overall. They may have liquidated positions this week in order to reduce their risk, but whatever overall investment they held is most likely very much in profit. The vast majority of carry trades aren't in currency speculation, but loans used to by other securities or bonds. These loans have been outstanding for years, enough time to make their money many times over. Giving a little back is all part of the game.
  • #11
  • Aug 19, 2007 2:28am Aug 19, 2007 2:28am
Quoting Syafi
Forex is not Truly Zero sum game.........

People actually buy foreign money to buy product made elsewhere....
the demand is there... regardless of the rate, people still have to buy the money to buy things made in other country......

It doesn't matter why they are exchanging their currency, in fact most of the trades in Forex aren't speculative in nature, but necessary for business. However, if they are exchanging their currency for another, someone made money and someone lost.
  • #12
  • Aug 19, 2007 2:29am Aug 19, 2007 2:29am
Hedge funds braced for more pain

By Anuj Gangahar in New York and Kate Burgess in London
Published: August 12 2007 18:30 | Last updated: August 12 2007 18:30

The much-heralded financial rocket scientists responsible for the explosion in complex mathematical trading strategies are bracing themselves for fresh pain after what one team of analysts called “the perfect storm” last week.
Quantitative strategists, or “quants” as they are known, attempt to profit from pricing inefficiencies identified through mathematical models. These send buy and sell signals on small variations in price between different securities.
One hedge funds manager said the average quantitative fund manager was down about 15 per cent in the first few days of August.
“Nothing seems to be working. Previously uncorrelated factors have recently been falling with the same pace, leaving investors with very few places to hide,” said Citigroup analysts in a report to clients last week.
Hedge fund managers who have suffered in the first few days of August and late July include James Simons, long acknowledged as the “king of quants”, at Renaissance Technologies and Clifford Asness of AQR Capital Management. Quantitative managers at Goldman Sachs and Highbridge Capital Management have also experienced difficulties.
Statistical arbitrage funds have run into particular problems. Their mathematical models rely on past trading patterns to predict how particular securities will perform in the future if other securities, say, fall in price. But their models are unlikely to take into account current trading conditions where investors, desperate to raise cash, are selling everything they can.
They are also unwinding short positions, which means buying back stock they sold earlier. Thus, companies with poor prospects have seen shares rise and vice versa, undermining the logic of “stat arb” models. Compounding the problem is that many stat arb managers have borrowed heavily to buy shares.
One hedge fund manager estimated that statistical arbitrage funds with more than $100bn (€73bn, £49bn) in assets had on average borrowed four times their actual assets. These borrowings magnify significantly any moves they may make in the market.
It is these more heavily indebted statistical arbitrage funds that have proved most attractive for pension funds seeking supposedly lower risk hedge fund strategies.
It is also these funds that ran into problems at the end of July when volatility began to rock the market.
As volatility rose, they began to cut back their risk. They did this by selling out of their positions to reduce leverage.
But the wave of selling only exacerbated the problem by pushing down prices. As asset values fell, the ratio of debt to assets rose. This forced them to sell yet more assets.
One hedge fund manager said: “Nobody is happy with their credit position and everyone wants to de-risk and de-leverage. And it is global. The market has gone freaky”.
Analysts at Lehman Brothers said the problem was that investors’ models, its own included, were behaving in the opposite way to tried and tested predictions.




http://www.ft.com/cms/s/030ba626-48f...0779fd2ac.html
  • #13
  • Aug 19, 2007 2:42am Aug 19, 2007 2:42am
Spider long time no see....

Did you pyramid into GBPJPY over the last 6 months, like we talked about on "Dion's Pyramid?"

Best.
  • #14
  • Aug 19, 2007 3:26am Aug 19, 2007 3:26am
Quoting Trader KGB
Retail stats at Oanda show the yen crosses at 70-85% net long through the entire 2000+ pip downdraft. Ouch....
every chart(retail stats) that i had seen from oanda looks like this...
"Abandon all hope, you who enter here" La Divina Commedia, Dante Alighieri
  • #15
  • Aug 19, 2007 6:31am Aug 19, 2007 6:31am
Quoting Hagbard Celine
It doesn't matter why they are exchanging their currency, in fact most of the trades in Forex aren't speculative in nature, but necessary for business. However, if they are exchanging their currency for another, someone made money and someone lost.
Most of the money arent speculative?
I cannot agree with you less.
90% of the money in forex are speculative ones.
Who certainly lost were big players who cannost putt all the money off the market.
But as mentioned above, it is part of the strategy.
I know about institutions who lost billions in speculation with currency (per trade) but overall they ends with 9 buck in profit.

Subprime mortgage is the black hole. Big players know it (part of the game). Everyone knows when it blows away it will smack down (tie up) U.S. economy. Yet, it didnt blow up.
We are digging pips upon bloated markets, yet risk is well known in advance.
Irony is when it blows up, the more rich you are, the less you lost (rich doesnt mean big)

Thanks
&
Nice day!
Thanks & Nice day!
  • #16
  • Aug 19, 2007 8:58am Aug 19, 2007 8:58am
Quoting Pip Rage
All the bottom-picking longs would have been profoundly smashed this week. A friend of mine was buying at nearly every round number(00) and finished the week 500 pips down.
The agressive, ill-timed shorts with narrow stops would have been smashed also.
I finished the week 340 pips up but anyone going short in the greenback with patience and wide stops was going to do well.
Just one of those weeks that trend riders just love.
I can assure you your friend is not dumb
Take a report.
  • #17
  • Aug 19, 2007 8:59am Aug 19, 2007 8:59am
Quoting mobi
Most of the money arent speculative?
I cannot agree with you less.
90% of the money in forex are speculative ones.
Who certainly lost were big players who cannost putt all the money off the market.
But as mentioned above, it is part of the strategy.
I know about institutions who lost billions in speculation with currency (per trade) but overall they ends with 9 buck in profit.

Subprime mortgage is the black hole. Big players know it (part of the game). Everyone knows when it blows away it will smack down (tie up) U.S. economy. Yet, it didnt blow up.
We are digging pips upon bloated markets, yet risk is well known in advance.
Irony is when it blows up, the more rich you are, the less you lost (rich doesnt mean big)

Thanks
&
Nice day!
In spot forex, most of the funds aren't speculative. Even in futures market this is the case. Take a look at the COT report.
Take a report.
  • #18
  • Aug 19, 2007 9:37am Aug 19, 2007 9:37am
here is my contribution... first post...
good observation-- if everyone is making money ... (or most)
who is losing.. in a zero sum game...
Well the forex market by itself is a zero sum game but there are many markets... share, sub-prime borrowers ect,...(so its not)
if you consider every single market the aggregate is zero sum....
where is my example:
i personally lost 40 pips on currency but made more on CFDs...
so I to am a little bit up... **(only playing with small money)

Essentially the price movements and investor positions (buying/selling) ect
serve to DISTRIBUTE wealth,, not create it..
thus many sub-prime borrowers will lose (defiantly)... institutions dealing in subbies will lose, some carry-traders will lose and some speculators.. (i don’t think
there is a way to get data anyway of who when and how much)
BUT considering the news-----> if your account is growing probability
is that it’s coming from subprime (borrowers! and lenders) and (importers/exporters) which have had the exchange rate moved against them.

Hope this answers your question....
PS.. since i am new to forex i will wait on the sidelines this week
are you guys jumping in early for a correction?? or still waiting for price adjustments?? (Im following AUD/USD massive fall but looks to be finding its feet?)
Texas Hedge: go long two call options and buy the underlying asset.
  • #19
  • Aug 19, 2007 12:47pm Aug 19, 2007 12:47pm
Quoting Huddy82
here is my contribution... first post...
good observation-- if everyone is making money ... (or most)
who is losing.. in a zero sum game...
Well the forex market by itself is a zero sum game but there are many markets... share, sub-prime borrowers ect,...(so its not)
if you consider every single market the aggregate is zero sum....
where is my example:
i personally lost 40 pips on currency but made more on CFDs...
so I to am a little bit up... **(only playing with small money)

Essentially the price movements and investor positions (buying/selling) ect
serve to DISTRIBUTE wealth,, not create it..
thus many sub-prime borrowers will lose (defiantly)... institutions dealing in subbies will lose, some carry-traders will lose and some speculators.. (i don’t think
there is a way to get data anyway of who when and how much)
BUT considering the news-----> if your account is growing probability
is that it’s coming from subprime (borrowers! and lenders) and (importers/exporters) which have had the exchange rate moved against them.

Hope this answers your question....
PS.. since i am new to forex i will wait on the sidelines this week
are you guys jumping in early for a correction?? or still waiting for price adjustments?? (Im following AUD/USD massive fall but looks to be finding its feet?)
Couldn't agree with you more. I'm looking to long Aussie, too.
Take a report.
  • #20
  • Aug 19, 2007 2:25pm Aug 19, 2007 2:25pm
I'm long Aussie vs Jpy and USD, looking to see what happens vs the Euro
Patience + Humility + Study = Success
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