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Idea for trading where everyone benefits..

  • #1
  • First Post: Jan 29, 2008 7:40pm Jan 29, 2008 7:40pm
hey guys.

I was wondering if this makes sense. Start a website where we get a good amount of members who trade speculatively as majority of us do. If the site/club has enough members, a large amount we could then as a large group trade in one direction. For example, we would decide that every Tuesday we would buy a certain currency. I am thinking if it has enough members, maybe like 2 million or so, controlling a large amount of money, then if all of us buy at same time it would create a rally, and since we all decided to buy we all win and earn pips. Eventually it should grow large enough where we control large amount of money to drive prices up or down whenever we want. As more traders hear about it, they would join making it better. Eg, would be a site like this, where you sign up free and become a member. then we have a moderator or someone who organizes the group and sets times and dates to buy or sell. So as members, 1 million or so people would then know that on tuesday march 2007, at 12:00am, we buy EUR/USD whatever and that should create a small rally so we all gain pips.

Makes sense?
. Would 1 - 2 million people controlling an average of $1000 each buying or selling a pair at same time push the market in their favour? or is that number way too small.??

Thoughts?
  • #2
  • Jan 29, 2008 7:52pm Jan 29, 2008 7:52pm
thats what managed account are... aren't they?
just put it on the good hand and they'll try their best.....

oh wait,,, i mean signal service...
  • #3
  • Jan 29, 2008 7:57pm Jan 29, 2008 7:57pm
"Thoughts?"

Yes. I think you really, really need to lay off whatever medications you're currently using. Sheesh...
  • #4
  • Jan 29, 2008 7:57pm Jan 29, 2008 7:57pm
first off i highly doubt you can get two million people to join your website, second thing i believe that the sheer size of the trades, and posting it on a public website will make the group all the more vulnerable because the guys with much much much deeper pockets will flip the tables on you and basically you would be giving them a way make money off of you.
Egyptian and proud of it!
  • #5
  • Jan 29, 2008 7:58pm Jan 29, 2008 7:58pm
Quoting realdude
hey guys.

I was wondering if this makes sense. Start a website where we get a good amount of members who trade speculatively as majority of us do. If the site/club has enough members, a large amount we could then as a large group trade in one direction. For example, we would decide that every Tuesday we would buy a certain currency. I am thinking if it has enough members, maybe like 2 million or so, controlling a large amount of money, then if all of us buy at same time it would create a rally, and since we all decided to buy we all win and earn pips. Eventually it should grow large enough where we control large amount of money to drive prices up or down whenever we want. As more traders hear about it, they would join making it better. Eg, would be a site like this, where you sign up free and become a member. then we have a moderator or someone who organizes the group and sets times and dates to buy or sell. So as members, 1 million or so people would then know that on tuesday march 2007, at 12:00am, we buy EUR/USD whatever and that should create a small rally so we all gain pips.

Makes sense?
. Would 1 - 2 million people controlling an average of $1000 each buying or selling a pair at same time push the market in their favour? or is that number way too small.??

Thoughts?
it might work in the stock market if you pick the right stock...just remember to be the one of the first once to jump out...
  • #6
  • Jan 29, 2008 8:04pm Jan 29, 2008 8:04pm
no, it does not make sense. now stop wondering.
"i wake up in the morning, and i piss excellence"
  • #7
  • Jan 29, 2008 8:47pm Jan 29, 2008 8:47pm
Hi realdude

You will probably get a few responses here with reasons for why the idea wouldn't work, and I'll give you one below. However, it's not because I want to be negative or try to look smart. It's because every idea, even ones that won't work, are opportunities to take another step along the road to knowledge. When you have an idea like the one you posted, and it turns out that it won't work, you have two choices.

A: Crumple up the idea, throw it away, forget about and maybe look for some other approach.

B: Figure out exactly WHY the idea won't work and then use that new knowledge to improve yourself as a trader.

Your idea about setting up a public website to plan trading moves in advance is a good example of how to learn something useful from a flawed start. You said,

Quoting realdude
So as members, 1 million or so people would then know that on tuesday march 2007, at 12:00am, we buy EUR/USD whatever and that should create a small rally so we all gain pips.
Now here's what I would do if I were one of your 1 million members. Since I know that everyone's going to be buying on Tuesday, I'll get a jump on everyone and start buying on Monday before prices start to shoot up. But am I the only one who's going to think of that? No. Everyone else will be buying on Monday too. So to beat them I actually need to start buying Friday. But so will everyone else. Get the picture? Basically, what will happen is that as soon as the word is put out on the site, everyone will begin buying to try to get a jump on everyone else.

Now we're getting somewhere. Your website idea might not work out, but in discussing it we've encountered a couple of interesting subjects about how markets behave.

1. The market discounts any publicly available information very quickly (meaning that the information gets "included" in the price). You may want to Google things like "market discounting of information", "efficient market hypothesis", "random walk", "behavioral finance", etc. You will learn a lot about the different controversies surrounding exactly the kind of scenario you discussed.

2. To get a wider view, if you're not familiar with Game Theory, do a little research on that too. It involves the same kind of issues and the basics can be useful to traders.

So don't let any purely negative comments discourage you. Even if you come up with an idea every day that doesn't work, each one is an opportunity to discover something that does work. Always keep asking "why?"
  • #8
  • Jan 29, 2008 8:50pm Jan 29, 2008 8:50pm
Quoting capitalist88
A: Crumple up the idea, throw it away, forget about and maybe look for some other approach.
Bingo.
  • #9
  • Jan 30, 2008 1:49am Jan 30, 2008 1:49am
Quoting realdude

a good amount of members who trade speculatively as majority of us do.
My thoughts are that the majority of people don't trade speculatively. That's usually confined to newbies in their first few weeks.

I think most traders usually have a reason for buying or selling (admittedly it's usually the wrong reason, but still).
  • #10
  • Jan 30, 2008 2:03am Jan 30, 2008 2:03am
Quoting capitalist88

So don't let any purely negative comments discourage you. Even if you come up with an idea every day that doesn't work, each one is an opportunity to discover something that does work. Always keep asking "why?"
GREAT post Capitalist

My faith in the usefulness of trading forums just went up a few notches.
  • #11
  • Jan 30, 2008 4:57am Jan 30, 2008 4:57am
Good post Capitalist88. Great advice to all of us.
Quote
Originally Posted by capitalist88 : It's because every idea, even ones that won't work, are opportunities to take another step along the road to knowledge.
In trading, there is no bullshit. You either make money or you don't.
  • #12
  • Jan 30, 2008 5:27am Jan 30, 2008 5:27am
Quoting forexmoments
My thoughts are that the majority of people don't trade speculatively.
You might wanna look up what currency speculation is.

Anyway, there have been scams similar to what the original poster here talks about, that is, market manipulation or "pump and dump" schemes. The forex is not the best place to do it, nor am I advocating the use of this method, but it does work.

The scams I am referring to specifically include rings of hackers who procure access to a large number of electronic trading accounts and use them simultaneously to manipulate stock prices to their own advantage.
  • #13
  • Edited 6:31am Jan 30, 2008 5:57am | Edited 6:31am
1 million people with $1000 would represent $1 billion. Leveraged, that's $100 billion. That is enough to move the market at times.

Wow, wouldn't the brokers and banks take note the first couple times a million orders for 1 mini lot each came through all at once?

As another poster said, it wouldn't take them long to figure out what happened, and figure out how to clean up big on us. Maybe.

But maybe, if there were no co-ordinated exit time, there would not be a definite enough outcome for them to work "our" system against us. I think most savvy traders would wait to see the wave start, then jump on and just try for a small piece of the move. People would be entering and exiting at different times, along with at least as many more others who never knew of the website and just joined in. It would be like any other move of the market except we would know when to be watching.

What could the banks do? They could soak up the $100 billion(s) and continue pushing against us, but then what? They end up with a huge position to get out of, which they probably didn't want, all because of some website? Banks don't trade that way. I don't know exactly how they do, but I know they don't risk $100's of billions because of some bunch of small-timers with a website. Then they have to worry about us taking "the next move" while they hold that big position. Maybe we would then reverse, costing them 10's of billions.

Or, they would push it to our stops, then they would be getting out at a profit each time a stop is hit. This is what they do now.

We would probably never learn to do to them what they do to us. Their stops are too wide, or they don't use them.

We also have to remember that our orders end up at the banks at some point. But if they tried to shut off the retail brokers to stop "us" that would open up another huge can of worms.

Could be very interesting, if not profitable. It would probably drive implementation of new laws or banking / broker procedures. They'd figure out a way to "halt trading".

Or, maybe not. Since they set the price, they don't HAVE to do anything with that big position that they don't want to. They can set a price that will preserve their profit, and that's that. Ultimately, a bank's profit comes from someone else's pockets. Many of us would lose, as now, depending on how each of us managed our trades. We can never do anything to them that they don't let us do.
  • #14
  • Feb 2, 2008 3:39pm Feb 2, 2008 3:39pm
Quoting fierceman
You might wanna look up what currency speculation is.

Anyway, there have been scams similar to what the original poster here talks about, that is, market manipulation or "pump and dump" schemes. The forex is not the best place to do it, nor am I advocating the use of this method, but it does work.

The scams I am referring to specifically include rings of hackers who procure access to a large number of electronic trading accounts and use them simultaneously to manipulate stock prices to their own advantage.

Guess the idea was just an idea...just wanted to hear your responses. thanks to those who replied..


also
Why would this idea be a scam? who would be the ones being scammed?
Also, you guys who think you are not currency speculators i suggest you take up a dictionary and learn, i have and i believe that i have used it in the correct context.
  • #15
  • Feb 2, 2008 8:14pm Feb 2, 2008 8:14pm
Well... by law it's regarded as market manipulation and second, as the others mentioned, the retail brokers (then investment banks) would soon find a way to pick you off. The other thing is "becoming the market" is the worst thing ever, however as it is forex, you won't have to worry about no one accepting your exit.

But yes, it's market manipulation and it is frowned upon and the CFTC or NFA etc. will act in some way.
  • #16
  • Feb 7, 2008 5:23am Feb 7, 2008 5:23am
Quoting realdude
Guess the idea was just an idea...just wanted to hear your responses. thanks to those who replied..


also
Why would this idea be a scam? who would be the ones being scammed?
Also, you guys who think you are not currency speculators i suggest you take up a dictionary and learn, i have and i believe that i have used it in the correct context.
I guess what you are suggesting isn't a scam per se... but the idea I was referring to definitely is.

And yes you did use the term "speculators" correctly. I was referring to the other posters who somehow think that having a trading plan makes them something other than speculators. A currency speculator is ANYONE who buys/sells currencies for the purpose of profiting from exchange rate fluctuations.
  • #17
  • Last Post: Edited 6:03am Feb 7, 2008 5:46am | Edited 6:03am
Quoting inggscap

But yes, it's market manipulation and it is frowned upon and the CFTC or NFA etc. will act in some way.
Market manipulation happens all the time. Stop hunting by banks? Collaboration by banks? Of course, they probably can't be caught, but if someone organized it such as the original poster suggested, then they might get a "visit".

I saw the Cramer video awhile back and vowed never to buy a stock or option again. In stocks, there is nothing but constant manipulation. I'll see if I can find it.... if these links get removed, just google jim cramer manipulation

http://www.thestreet.com/video/10329....html#10329438

http://seekingalpha.com/article/3025...-at-hedge-fund

http://www.yikers.com/video_jim_kram..._activity.html
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