A trader does not have to lose before you make profit in the Forex market

I have seen a lot of articles that claims that 5% of the FX traders in the market are the ones making profits and the remaining 95% are just losing, and their monies are being transferred to the 5% winning mafia. This is not totally true. I have found out how the price engine of the brokers work, and I can let you know how possible it is for everyone including the bankers and the traders and the brokers to be happy, all at the same time. If you really want to know this, you can reply, or follow the thread. I will come back later to give you full details. I wrote in my last post in the Rookies's forum that we have finally cracked the code for this forex market. I trade for just about 2 hrs a day and very profitable.

Happy pips and Good luck with your trading.

im intrigued

regards damien

wow you must be new to this. the procedure is first you make a few hundred posts, get a few vouches, THEN try to scam people.

kids these days.

Yes but he has found the secret code that magcally allows everyone to profit from forex, bankers, brokers and traders. In a supposed zero sum game, this is one heck of a achievement. The unfortunate fact of trading, is somewhere on the way there has to be losers.

He's fast tracking, he can't waste valuable time posting when that time could be used spending all the profits from "finally cracking the code for this forex market".

ok, i'm waiting for the reply. And of course it has to be free

Fellow traders

I am reading a few of the responses to the post, and I wish to say first, that the fact so many people in this market believe that something is true does not necessarily make it true. May be it is right to say that the 5% that dare to get the right information about the dynamics of this market are the ones really making the money. Information is power if you get it right and use it right. I do not need any voucher from Forexfactory or any other forum. This is not scam. If you get an information, and you are not happy about it or you do not believe it, you have the right to discard it immediately. I mean just drop it. A word is enough for the wise.

I will break this information into few pieces because of my schedule. I will be posting it in bits. It is unfortunate that the post was taking away from the trading discussion forum where the so called experienced traders will have access to it. But, if this is destined for the newbies, so be it.

Let's start:
A forex broker like FXCM, AvaFX etc will have a trading platform, a back-office operation, web servers, news servers, account servers etc. the trading platform integrates all of the information into a format that is user-friendly. There is also a bridge interface system that makes it possible to interact all participants in the inter-bank forex market. Most of the time, a broker will not offer many types of trading paltforms because the more they offer, the more complex it is to manage and synchronise.

You might have been wondering how you get the quotes on the trading platform. Let me explain what happens:
Prior to you getting any quote shown on the platform (no matter how fast they seem to appear from time to time), a forex broker uses what is called API (Application protocol interface) that the major banks produce. The broker uses this API to set up a link that allows it to get price quotes in various currencies. To us retails traders, these banks may not mean anything, but, in the real sense, they are, to the brokers what we call liquidity providers. I will let you know the effect their activities have on the overall market later.

Using the API, the broker then builds a connection between its own backoffice and the backoffice of the liquidity providers. Most of the time, the big and good brokers get prices from 1-4 banks like Citibank, Bank of America, Deutsche Bank, Barclays, JPMorgan Chase, HSBC etc. Small brokers will usually get prices from say 1 liquidity provider and will surely be at the mercy of this provider for price quotes to its clients. So, it is very important to be aware that your choice of broker could determine, to some extent, your profitability in this market, especially in the long-term.

I will stop here now and continue later. You can keep posting your responses.

I wish you all good luck in your trading adventure.

Question to the topic description..
"A trader does not have to lose before you make profit".

Can someone please explain why?
From what I have understood, If less people would lose then the chance of winning would be bigger.
If everyone in the world would buy and then reverse to sell at the exact same times then we would have 100% chance to always win and no one loses.

Fellow traders

Now, let's start from where we stopped before. My last statement was about your broker having only 1 liquidity provider. If this is your type of broker, then, you will undoubtedly be at the mercy of this liquidity provider also. And remember, you are trading as a very tiny portion of the entire Forex Interbank market globally. So, competitiveness is very important.

So, let's get back to business.

Now, let's assume that your broker is the type that gets quotes from say, 4 big banks. This broker will then use its connection or what is called the "back-end bridge interface" to "aggregate" or bring together prices from various liquidity providers. Prices from different banks will never ever be the same, but generally, the prices among the big banks are usually close.

So, the broker continues to receive these price quotes but it does not really know whether a client (you) will buy or sell. No matter what position you take in the market (i.e no matter what your order is), the broker should be able to deliver. If two traders using the same broker take opposite directions, the broker should still be able to deliver to both in terms of fulfilment of the orders. This is where it gets confusing atimes. But is quite straight forward. I will explain it with figures later so that everyone can understand.

Though, the broker is interested in showing you (from its platform) bid/ask quote, it is more interested in showing you the bid/ask quote that will eventually be profitable to it in case you click either. So, this is what the broker does. Before showing you the bid/ask price on any currency pair, it must ensure that it is able to secure one or multiple bid/ask prices that will allow it to earn a profit from the spread. To decide what price to show you is not as easy as it may sound. It actually requires a very complex algorithm programmed inside the price engine. This algorithm determines what price and spread to show for each pair given a set of conditions given to the brokers by its liquidity providers, and also the limitations of their own back office systems.

You will agree with me at this stage that choosing the right broker is not something to be taken lightly when you are setting out on your journey as a forex trader.

keep following this thread, keep sending your responses, and I will be back later. I have to go start preparing for the week's work. the market starts soon. I am also trying to see if we can create an online chat room where many people can trade together and smash this market. I have truly cracked the code for the forex market, but, it seems some people still do not believe it. I have made 1167 pips in May 2010 alone trading for less than 2 hours a day and risking only 1% of my entire trading fund at a time. I am even looking at trading for only about 20 minutes a day soon.

Good luck in your trading journey. I wish you every success possible.

still intrigued would like to see where this goes

regards damien

I'm having that strange feeling of "deja vu"...

so am I,

lol I had this sneaky feeling when I read the thread a day ago.

Let's give the guy a chance.

Yes.. .lets give the guy a chance to post his live account and give us his secret of breaking the market for free!. Ya, right..! HE will be back for you to get a group together to trade live in his site to sell you his program BECAUSE HE IS THE EXPERT ON ALL! . That is why he needs you there; to make himself and his superiority feels so good!.

"for less than 2 hours a day and risking only 1% of my entire trading fund at a time. I am even looking at trading for only about 20 minutes a day soon"

Man if I had finally cracked the "code"(err there is a code?) I can think of so many more interesting things to be doing than spending my time on a forum ^^

I am also trying to see if we can create an online chat room where many people can trade together and smash this market. I have truly cracked the code for the forex market, but, it seems some people still do not believe it. I have made 1167 pips in May 2010 alone trading for less than 2 hours a day and risking only 1% of my entire trading fund at a time. I am even looking at trading for only about 20 minutes a day soon.



How can we believe or dis believe? You haven't posted the code yet.

Post 1 blah blah blah.
Post 7 blah blah blah.
Post 9 blah blah blah.

Post the code, then we can decide.

This feeble-minded, severely broken logic shows a complete misunderstanding of the principles of a zero-sum game. Take your vain attempt at being a shill elsewhere.

Hi there

I am back again. Just went to place my only trade at about 1am London, UK time. Do I live in London? Yes. Already I clocked 40 pips on EUR/GBP LONG in 1.5hrs. I trade on the 6-hr chart spending about 20 minutes to figure out my best probability trades. I am about including the daily strategy now where I will only spend 20 minutes per day. That will start today also. The code is finally cracked. It is up to anyone to believe it or leave it. I have read some response that talked about having a program to sell. I believe if I have something good to offer at all, which I believe it is worth paying for, and will ultimately be of benefit to others, it will not be out of point to have such program to sell, for as long as everybody involved can be happy and trade profitably with it, and of course a person can make a choice whether to buy such or not. Anyway, we are not for that now.

Let's go to business.

The next thing I am going to show you is how you the trader and the broker profit together, even without your fellow trader taking any opposite direction in the market. This includes some figures. So, if you like, you may get a calculator, a pen and a sheet of paper.

Now, let's say you see an opportunity to buy EUR/USD. let's also assume that your broker shows its clients (on its platform) a spread of 3 pips on EUR/USD, for instance 1.2270-1.2273. You the client (or trader) then submits an order requesting to buy at 1.2273 via the trading platform. This order is relayed by the broker to its back-end bridge. Then, the broker gets the following simultaneous tradeable prices from say, three liquidity providers:

Bank 1 Quote: EUR/USD 1.2271-1.2272
Bank 2 Quote: EUR/USD 1.2270-1.2271
Bank 3 Quote: EUR/USD 1.2272-1.2273

We will assume in this case that of course, you are trading standard lots.

So, your broker confirms the trade at the quoted price of 1.2273 for you, and charges you $30 (spread) per $100,000. The broker then offsets the trade risk by buying at 1.2271 from Bank 2 (the lowest asking price). The reason for offseting the trade with the interbank market is so that the broker remains indifferent to whether the client makes money or loses money. This is simply called ARBITRAGE within the interbank system.

Now, let's go to what happens when the trade is to be closed.
When you request to get the trade closed, the broker looks at its liquidity providers quoted prices again. Let's assume that it sees the following:

Bank 1 Quote: EUR/USD 1.2372-1.2373
Bank 2 Quote: EUR/USD 1.2369-1.2371
Bank 3 Quote: EUR/USD 1.2371-1.2372

The broker then decides to show you (the client or trader) 1.2369-1.2372.

Let me stop here. We will do the basic arithmetic when next I visit this forum.

Happy trading week.

It's not just the code that's cracked....seriously, you expect to sell this stuff?


The next thing? What was the first thing?

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