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Is it Possible to Make Money in Forex Market

  • #81
  • May 6, 2011 10:20pm May 6, 2011 10:20pm
Quoting Custos
Then it's up to us to design the ea complex enough so that it can handle everything the market spits out at us.
Good luck with that.
  • #82
  • May 6, 2011 10:50pm May 6, 2011 10:50pm
1. Is it really possible to make money for a living through FX market?

Yes of-course and you know it! Everyone does!

But the real question is, can you really make money for a living through FX market? That depends entirely on you my friend!

Just a little suggestion from personal experience, Please first think about not losing you money in the market, protect you investment at any costs. If you can do that, profit will start to come eventually.

The thing I love about this market is, you don't to think "how much money", you need to think "How many pips", even with 10 pips a day, one can easily live a standard life with enough investment.
" The fool who never traded Demo "
  • #83
  • May 7, 2011 12:40am May 7, 2011 12:40am
Of course it is. Just flip a coin.

Science will prove that randomness with no human emotion will beat well thought out and defined methodologies with human emotion.
  • #84
  • May 7, 2011 2:36am May 7, 2011 2:36am
Quoting FXTradeX6
Good luck with that.
no luck needed. I already designed some ea's that can do just that.
  • #85
  • May 7, 2011 4:15am May 7, 2011 4:15am
Quoting Custos
Then it's up to us to design the ea complex enough so that it can handle everything the market spits out at us.
The thing is each moment in market is unique and you can not compare it with same situation in the past. Sometimes may react the same as before but not always
  • #86
  • Edited 5:50am May 7, 2011 5:48am | Edited 5:50am
IMHO it has been said that only 30% of forex traders are making money.
So be sure to be in this 30%!

And answer for the question:
yes, it is possible to make living only from forex.

In example:
A:
Deposit: 10'000€.
Lots: 1. (risk 10%)
TP: 20 pips (w/o spread).
You earned 200$ ~ 139,35€ ~ 6% profit.

But when You will have:
B:
Deposit: 50'000€
Lots: 5. (risk 10%)
TP: 20 pips (w/o spread).
You earned 1000$ ~ 696,75€ ~ 6% profit.

Trading once a day ('scalping') example B only 20 pips look what You earning:
1000$ daily!
You can make living with that!
Many threads on FF which can proove you that.
Here it is opportunity to find and learn from profitable traders.
RichieEU
  • #87
  • May 7, 2011 6:59am May 7, 2011 6:59am
Quoting amir85
The thing is each moment in market is unique and you can not compare it with same situation in the past. Sometimes may react the same as before but not always
that is why you need to find out which patterns are random and which are recurring with a certain statistical likelihood.
Once you identified those patterns it is rather easy to exploit them using an ea.

I think the difference in our perspectives is that you BELIEVE that the market is unique in each moment, while I KNOW through my statistical data that this is not the case.
  • #88
  • May 7, 2011 7:25am May 7, 2011 7:25am
Quoting Custos
that is why you need to find out which patterns are random and which are recurring with a certain statistical likelihood.
Once you identified those patterns it is rather easy to exploit them using an ea.

I think the difference in our perspectives is that you BELIEVE that the market is unique in each moment, while I KNOW through my statistical data that this is not the case.
As long as you do not expect all the patterns you find by your system, will not act as you predict and all of your positions with your EA have stop loss not more than 5% of the account and it is profitable, it's OK for me

but I never saw such an EA. may be you can help
  • #89
  • May 7, 2011 7:56am May 7, 2011 7:56am
Quoting RichieEU
IMHO it has been said that only 30% of forex traders are making money.
  • #90
  • May 7, 2011 8:25am May 7, 2011 8:25am
Quoting Marv
Why are you laughing?
RichieEU
  • #91
  • May 7, 2011 8:35am May 7, 2011 8:35am
Quoting RichieEU
Why are you laughing?
I can't speak for Marv, but I believe that the number is MUCH smaller than 30%.

It's one thing to crunch numbers to show that if I can make X pips per day, then I will make $Y at the end of Z months. Anything might be possible, if you're expert enough, but I know from experience that the practise is somewhat more difficult than the theory - that's assuming we're talking about maintaining consistency of performance over several hundred trades and many years of changing markets.
  • #92
  • May 7, 2011 9:44am May 7, 2011 9:44am
Quoting RichieEU
Why are you laughing?
What Hanover said.
  • #93
  • May 7, 2011 10:47am May 7, 2011 10:47am
Quoting RichieEU
IMHO it has been said that only 30% of forex traders are making money.
It seems the real statistics are below 10%
  • #94
  • May 7, 2011 4:25pm May 7, 2011 4:25pm
Quoting amir85
As long as you do not expect all the patterns you find by your system, will not act as you predict and all of your positions with your EA have stop loss not more than 5% of the account and it is profitable, it's OK for me

but I never saw such an EA. may be you can help
You need to find an inefficiency in the market first and then build your whole strat around that. Normally any rule you have can be coded, you just have to think how your rules can be formulated in programming language. (And yes, discretion can be coded as well, cause discretion are essentially rules that you didn't formulate yet.)

I think most guys are just not researching inefficiencies well enough. Cause most patterns are really just random occurences that sometimes have better odds of occuring and sometimes not. If they occured frequently in the near past, then they will become popular again. But by no means are they actual inefficiencies. Even random occurences also have sometimes trends. Take the coin toss example: overall head and tails should be equal over an extended period of time, but it might be that my next 100 tries will only be heads or only be tails. Now most people would assume that they found an edge based on those 100 tries, but in reality, this trend will end pretty soon and go back to a 50:50 chance over the long haul.

Finding the real inefficiencies is about looking past these random patterns and finding the ones that really consistently occur over and over again. Once you have those, writing an ea for exploiting them is really easy.
  • #95
  • May 7, 2011 4:28pm May 7, 2011 4:28pm
Quoting RichieEU
Many threads on FF which can proove you that.
Yeah, I don't think claims on threads can be considered as proof.
  • #96
  • May 7, 2011 5:28pm May 7, 2011 5:28pm
Quoting Custos
I think most guys are just not researching inefficiencies well enough. Cause most patterns are really just random occurences that sometimes have better odds of occuring and sometimes not. If they occured frequently in the near past, then they will become popular again. But by no means are they actual inefficiencies. Even random occurences also have sometimes trends.
Yes, I believe you're correct. Real inefficiencies must be robust enough to stand the test of time: several hundred trades and many years of changing markets. The best edges come from inefficiencies and patterns that are caused by deep-rooted, recurring market dynamics. A couple of possible examples: (1) macroeconomics cause exploitable trends on longer timeframes (there is generally always one currency that's weak or strong for a sufficiently prolonged period to create a decent move), and (2) pairing the strongest currency/ies against the weakest will always give the strongest, cleanest trends.

Here's a horse racing analogy: The savvy punter knows that studying factors like the track condition, weight carried, barrier draw, and jockey's experience can give him a real edge. The uninformed punter might (for example) run a historical test based on saddle blanket color, and over a large data sample discover that the horse that wears a yellow saddle blanket wins more often on Thursdays, while one wearing a green saddle blanket wins more often on Tuesdays. The results of the test, whatever the statistical error, are irrelevant, simply because the underlying premise has no real bearing on the outcome. The same applies to the markets.
  • #97
  • May 7, 2011 8:03pm May 7, 2011 8:03pm
Quoting Custos
Normally any rule you have can be coded, you just have to think how your rules can be formulated in programming language. (And yes, discretion can be coded as well, cause discretion are essentially rules that you didn't formulate yet.)
This is very true...but most do not understand this! If you can quantify it, you can build it! The problem is that most can't figure out how to quantify their discretion. And of the ones that can, very few know how to code it properly.

However, I never understood the popular opinion that edges in the forex must be related to some inefficiency of the market. To me, the "secret" is identifying the EFFICIENCIES of the the forex market - the things that continue to happen over and over again.

Sure the forex market if chaotic, but it is still extremely efficient. Understanding this "chaotic efficiency" is the edge that most continue to search for.
  • #98
  • May 7, 2011 9:02pm May 7, 2011 9:02pm
Automated trading has its place, and so does discretionary trading.

What you're saying might be true for discretionary trading that has relatively straightforward and identifiable rules, but there are things that are nearly impossible to code. I for one don't simply look at statistically collectable patterns in price data, or some TA formations etc. but many different things on different layers pertaining to the market, some of which are not technical at all, are hard to quantify, and are concerned with only the present unique moment (i.e. are hard to track/collect and of which past occurrences, if any, have zero relevance to the present occurrence and how it may influence price). On top of all that, you got intuition. Try quantifying that.

It's just too many things for me to attempt to code, so much that it seems not worth the effort when compared to just trading discretionarily. In other words, I keep telling myself that the many months I'm going to spend trying to quantify and code all of this stuff I would rather spend them, well, trading!

Besides, I personally enjoy the kind of direct interaction with the market discretionary trading offers, and I truly hope discretionary trading will never die. I'd hate to see the market being 100% traded by 'machines'.
  • #99
  • May 8, 2011 1:15am May 8, 2011 1:15am
Quoting hanover
Yes, I believe you're correct. Real inefficiencies must be robust enough to stand the test of time: several hundred trades and many years of changing markets. The best edges come from inefficiencies and patterns that are caused by deep-rooted, recurring market dynamics. A couple of possible examples: (1) macroeconomics cause exploitable trends on longer timeframes (there is generally always one currency that's weak or strong for a sufficiently prolonged period to create a decent move), and (2) pairing the strongest currency/ies against the weakest...
nice post. I especially like your analogy! Makes a lot of sense.
  • #100
  • May 8, 2011 1:20am May 8, 2011 1:20am
Quoting zznbrm
This is very true...but most do not understand this! If you can quantify it, you can build it! The problem is that most can't figure out how to quantify their discretion. And of the ones that can, very few know how to code it properly.

However, I never understood the popular opinion that edges in the forex must be related to some inefficiency of the market. To me, the "secret" is identifying the EFFICIENCIES of the the forex market - the things that continue to happen over and over again.

Sure the forex market if chaotic, but it is still extremely...
Well, maybe we have different definitions of what inefficiencies and efficiencies are. If the forex market were to be efficient , then it would be impossible to gain superior returns over the long haul (efficient market hypothesis). From my understanding, if any market was really truly efficient, price trends would cease to exist, since they in themselves represent an inefficiency.
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