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Do you guys find that forex trading sucks?

  • #121
  • Dec 19, 2011 11:19pm Dec 19, 2011 11:19pm
Quoting erock
Ok so let me get this straight you know people that trade on 50k accounts and generate 20% a month, so that's 240% a year. Alright let's compound this out.

3 years 50k at 240% turns into 2 million
5 years it turns into 22 million
and 10 years it turns into 10 billion

So in 10 years you can generate 10 billion dollars from 50k. Now that's pretty impressive. Do you understand my point. It's doesn't work like that. You can't compare anyone to buffett or soros. Those guys are legends.

If anyone can seriously trade and generate profits, legends...
Compounding interest is great but at some point you need to substitute the math for the reality. At some point you simply won't be able to trade the same way you have been.

The same strategy you used to compound a 100K account to 1M could not be used to compound a 1m account to 1B. The numbers look nice in a spreadsheet and the logic seems simple enough, but at some point if you want to make the multi millions + you're going to have to learn a more advanced version of the game you already play. It wouldn't be knowing which prices to buy and sell at (you already do), but more about HOW to Buy and Sell @ those prices.

You can't compare small 100K or 5K accounts to hedge fund accounts. It's Apples and Pares. They play a completely different game to that of a regular trader and much of it revolves around acquiring the liquidity needed to fill such large positions. This is a cost they incur that small traders don't have to worry about. We have the luxury of being able to trade at any price we want, when we want, at how much we want.

A hedge fund can't just say "oh cool, Aussies about to tank lets risk 1% of our 10B fund on this trade and sell at the market". 1% of 10B is 100M, so what they now need is a willing buyer of 100M AUD... Are you game? Would you take the other side of that trade? Someone has to...

A 100K account holder could see the same trade and short it with no worries, hit the bid take a $3000 profit or a $1000 loss.

This is why Hedge funds settle for such seemingly meager % returns, 1) it's all they need to make a boat load of money and 2) It's all they really CAN make because at those massive fund sizes there simply isn't enough people willing to LOSE that much, in order for them to GAIN that much. The money has to come from somewhere/ someone.

If you really know how to trade Forex, 1000% on a small (<$5k) account over time (within a year) is nothing. But as your account grows that % shrinks which is what compound interest forecasts often fail to account for (as well as tax as someone mentioned earlier.

This is why debates between 5K account holders and 100K account holders about % gains is simply ridiculous.
Time hides Nothing
  • #122
  • Dec 19, 2011 11:39pm Dec 19, 2011 11:39pm
Quoting erock
Don't you get my point. RISK IS RISK. You have the risk the 50k to get to the million.
That is the nature of compounding, but doesn't really reply to my post.

Quoting CindyXXXX
Compounding interest is great but at some point you need to substitute the math for the reality. At some point you simply won't be able to trade the same way you have been.....
  • #123
  • Dec 20, 2011 1:50am Dec 20, 2011 1:50am
Quoting erock
Ok so let me get this straight you know people that trade on 50k accounts and generate 20% a month, so that's 240% a year. Alright let's compound this out.

3 years 50k at 240% turns into 2 million
5 years it turns into 22 million
and 10 years it turns into 10 billion...
Compounding 20% every month doesn't give you a return of 240% a year, its more like 800% a year. And the rest of your math isn't even close, even when the right numbers are substituted for any number of your mistakes. In fact the only thing you did get right, is that trading isn't for you.
si hoc legere scis nimium eruditionis habes
  • #124
  • Dec 20, 2011 1:58am Dec 20, 2011 1:58am
Quoting numbnuts
Compounding 20% every month doesn't give you a return of 240% a year, its more like 800% a year. And the rest of your math isn't even close, even when the right numbers are substituted for any number of your mistakes. In fact the only thing you did get right, is that trading isn't for you.
True that, 50K at 20% a month after 3 years compounds to $35,440,093

lol, now he's gonna be really pissed
Time hides Nothing
  • #125
  • Dec 20, 2011 2:01am Dec 20, 2011 2:01am
That post made my head hurt, and from somebody proclaiming the virtues of compounding interest. I'm going to lie down.
si hoc legere scis nimium eruditionis habes
  • #126
  • Dec 20, 2011 2:31am Dec 20, 2011 2:31am
Quoting erock
More power to you, I'm not a genius trader and I'm not bashing forex traders. I'm just saying it's not for me and I didn't lose. I gained a little. Just not my cup of tea. God bless you guys if you are doing it!

I'm just saying when someone tells me they can consistently make 50-100% returns I know for a 99% fact they are full of shit. If they can do it by all means I would love to hear how you consistently do it. Not one or two or three years you're up 50 to 100% but multiple consistent steady years. Even if you are up 20% year, Year in and year...
The smaller retail accounts are more nimble and we are not competing for liquidity. The large accounts are however (i.e non retail), and they need to use a different tactical approach to load up and dump positions.
  • #127
  • Dec 20, 2011 3:08am Dec 20, 2011 3:08am
If you can't trade forex, don't try and find the reason why as some external issue. Plenty of people out there myself included trade it successfully, and most of them will be able to trade their strategy on just about any market out there with a bit of tweaking, but, they have all got more than a few years hard graft behind them. If you are worrying about not being able to trade forex successfully after just a year of trying, either give up now, or commit yourself to learning how to, no matter how long it takes, because that is the only way to get there. Harsh words, but true.
  • #128
  • Dec 20, 2011 7:23am Dec 20, 2011 7:23am
Quoting CindyXXXX
Compounding interest is great but at some point you need to substitute the math for the reality. At some point you simply won't be able to trade the same way you have been.

The same strategy you used to compound a 100K account to 1M could not be used to compound a 1m account to 1B. The numbers look nice in a spreadsheet and the logic seems simple enough, but at some point if you want to make the multi millions + you're going to have to learn a more advanced version of the game you already play. It wouldn't be knowing which prices to buy...
For someone who does his business like that, what you and others are trying to tell him is actually way over his grasp, and i am really enjoying this.

He is an investor guys not a trader.

Quote
What I typically do is take 100k and put it into U.S. T notes. I can then trade against the note and have access to 97% of my capital to trade. The yields on notes right now are very low but typically they yield 3%. So I can collect 3% right from the start

I then take 45% of my money and go into bonds. I'll take the other 45% of my money and go into equities and 10% will go on margin for futures.

I'll risk 1 percent on each trade for futures and equities and then write covered calls and puts to add income.

The t note will yield 3% the...
  • #129
  • Dec 20, 2011 8:34am Dec 20, 2011 8:34am
Quoting erock
I've traded forex for the past year. I trade on about $100,000 account and normally trade futures and equities.

Normally if I trade a currency I trade it through a futures contract. I decided to incorporate forex into my trading but was greatly disappointed.

There is too much volatility and the markets don't adhere to any trading theory or indicator. Forex markets don't even adhere to basic psychology that most markets adhere to.

You also can't write covered calls or puts that help to add income to your positions. It just seems like the...
So let me just make sure I understand this?

You're a trader, you trade other markets and think (rightly) that Forex presents another opportunity to increase your return.

You go into it, you don't fail but you turn only a marginal profit and then give in.

You then come on here and tell everyone that you are now sure that nobody can make money off Forex (this despite you seeming not to have given it any length of time to prove itself to you - it took me about 2.5 years to get profitable - and also despite the fact that you even admit that YOU made a profit. Tad odd)?

You're either a cretin or one of those weird people that gets their rocks off going around trading forums telling folk that they're wasting their time. Either way, you make yourself look like a plank.
  • #130
  • Dec 20, 2011 9:45am Dec 20, 2011 9:45am
hi guys hows the argueing doing. erock your answer before reminded me something my mother kept saying years ago. i would go out and run 20 miles and she would say,,, if i was any good i'd be running 26 miles ie marathon. one doesn't have to prove one can trade consistently for year after year. i was messing about small time about 3 years ago maybe some of my old posts will prove this. anyway approx 3 years ago i started trading my way going off statistics and probabilites and hey presto. i compound over 5 days and use approx 5 pairs to choose trades from and normally when i hit 900 to 1000 english pounds i stop tradeing then start again the folling week. i dont need a billion as i dont have a big enough suit case. but trading upto 1000 is relatively easy on my nervous system. and i must say i normally make my target with 2 or 3 pairs so if one goes down i'm still in. happy days
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #131
  • Dec 20, 2011 10:06am Dec 20, 2011 10:06am
Just a hint: the enter key with a left hand arrow used every once and awhile would help others reading your posts.
  • #132
  • Dec 20, 2011 10:20am Dec 20, 2011 10:20am
Quoting nasir.khan
For someone who does his business like that, what you and others are trying to tell him is actually way over his grasp, and i am really enjoying this.

He is an investor guys not a trader.
I agree with the people that state that compounding doesn't work to infinity, but I also feel that the argument is sometimes being used to defend the people stating that they can make 20% monthly.

The element that limits compounding is liquidity. Frankly, the Forex market is liquid enough that it could support accounts ranging far into the millions, without causing problems. Orders of high into the millions would not move the market, and investment banks would even quote tighter spreads for such orders. In fact, orders >10 mio tend to get quoted tighter spreads than <10 mio, if I remember the numbers correctly (I think I read it in a paper by Osler that examined spreads and differentiated between small and large orders, settiing the boundary for that at 10 mio.)

So, traders claiming to make 20% monthly have no practical boundary not to compound their accounts to at least some million dollars. (Unless their strategy is based on exploiting their retail broker's - as retail brokers may induce some limits when scaling up your account - slippage, for example.) My question then is why don't the people bragging about easily making 20% monthly run million dollar accounts? Probably because they start bragging when they experienced quick a profit, and flush their accounts within the next couple of months. I make no accusation to anyone, just a general remark.
The nail that sticks out gets hammered back in
  • #133
  • Dec 20, 2011 11:05am Dec 20, 2011 11:05am
investing the forex.... nuts.


LOL joke i just cant picture myself investing. once atrader they say its hard to be an investor.

they even call position traders, TRADERs. not investors... maybe just me but are there any fx investors?



if ure an investor obviously ull have a hard time 'trading' with all the volatility and not to freak out with it. perhaps u need to adapt to change?
Have I got something on my face, SOLDIER?
  • #134
  • Dec 20, 2011 11:43am Dec 20, 2011 11:43am
Quoting billytt
i trade for a living but i do work as a bodyguard not that i have to but its great being in the limelight.A scenario, i had a fight with a semi pro boxer. if i was in a ring by rights he would of beat me to a pulp but alas i was in the street and dislocated his knee and broke his collar bone. the moral to the story is i fight one way he fought the another. I trade one way and you trade another. i trade forex and make approx 55 thousand english pounds per annum. that isnt a huge amount but its comfortable for me. and before you ask i dont use indies,...

omg

You see, even knuckle heads can trade fx...
  • #135
  • Edited 11:57am Dec 20, 2011 11:55am | Edited 11:57am
Do I find that forex trading sucks? Not in the slightest. For instance, today I made exactly 179+ pips in one trade which I entered yesterday at around 8pm GMT and closed it today at 1.45pm ish, I only trade GBP/USD, I enter breakouts from S/R levels and my profit target is usually a respected level where the price is undecided on which way it wants to go or where the price has rapidly changed direction in the past (predicting the future?), for instance my profit target today was 1.5693 which was hit then the price has bounced down from that area, which if you look at the gbp/usd chart is a major level.

I don't think I'd change from forex.

Thankyou and good day.
  • #136
  • Dec 20, 2011 11:58am Dec 20, 2011 11:58am
Quoting Noloqy
So, traders claiming to make 20% monthly have no practical boundary not to compound their accounts to at least some million dollars.
I think the biggest boundary (assuming the edge isn't the problem) is a psychological one, as the lot sizes increase so does the fear and reality of money. Suddenly you're not risking the equivalent of a cheap night out anymore, but weekly wages, holidays, cars. We're only human after all and money is hard to simply ignore. Why do you think we're all here in the first place?

Of course this is a destructive way to view trading risks/ losses. It's a great skill to be able to keep things in perspective and think always in %, but again, we're only human. And of course not everyone wants to be a millionaire, some find their comfort zone at a certain level and stay there.

Slow and steady wins the race as they say...

Keep an eye on this guy.
Time hides Nothing
  • #137
  • Dec 20, 2011 12:29pm Dec 20, 2011 12:29pm
Quoting billytt
hi guys hows the argueing doing. erock your answer before reminded me something my mother kept saying years ago. i would go out and run 20 miles and she would say,,, if i was any good i'd be running 26 miles ie marathon. one doesn't have to prove one can trade consistently for year after year. i was messing about small time about 3 years ago maybe some of my old posts will prove this. anyway approx 3 years ago i started trading my way going off statistics and probabilites and hey presto. i compound over 5 days and use approx 5 pairs to choose trades...
Answer this quetion. What is your purpose of trading? Is it to make money or to just have fun.

How long do you plan on trading forex 1 year, 2 years or 20 years. The whole purpose is to make money, if not you're just wasting your time.

If you only want to get in one year and make a 100% return then I see your point.

For me it's my retirement and a way to compound my return. I combine trading with investing. If you compound higher returns at shorter time frames you won't make as much money as longer time frames with smaller returns.
  • #138
  • Dec 20, 2011 1:20pm Dec 20, 2011 1:20pm
Scalping and short-term trading is not for everyone as you will need precise entry and exit points. Most of the intraday price action are just noise to the longer prevailing trend. My suggestion is to trade in longer time frames. In trading longer time frames, it will test your ability to control your emotions, especifically PATIENCE. It will also minimize over-trading/revenge trading, which usually results to wiping out your account very soon.

Pull out a daily chart and put some indicators on it and analyze profitable entry and exit points. Target for a maximum of 20 trades per year. Remember, you CANNOT BE RIGHT all of the time. However, even if you are right less than half of the time, but make a lot of pips when you're right, it makes trading profitable.

Happy Holidays!!!
Fear prevent possibilities, and so does Greed
  • #139
  • Dec 20, 2011 1:27pm Dec 20, 2011 1:27pm
Quoting erock
Answer this quetion. What is your purpose of trading? Is it to make money or to just have fun.

How long do you plan on trading forex 1 year, 2 years or 20 years. The whole purpose is to make money, if not you're just wasting your time.

If you only want to get in one year and make a 100% return then I see your point.

For me it's my retirement and a way to compound my return. I combine trading with investing. If you compound higher returns at shorter time frames you won't make as much money as longer time frames with smaller returns.
The purpose for me (not that you asked me, whatever) is to make a liveable wage solely off of trading profits. In a word, money, but money in and of itself is not the sole goal.

I plan on trading as long as I (a) need to, and (b) want to. I may never get to the point where (b) trumps (a), but I digress.

If I have a $50k account, I know I can comfortably trade 1-2% positions with 10 pip stops intraday. I know the liquidity is available, I know that size position is well within my comfort level, and I know my strategy works. Skip ahead to the end of the year and let's say theoretically I made 100% (definitely on the low end of what is possible if you are trading this style), or $50k on top of my account. Between taxes, living expenses, etc. (let's say $45k all totaled) I'm probably not ending up with much more than $5k in bankable profit that can be reinvested. So now year 2, I've got $55k to trade, and I repeat-- nothing has changed, liquidity situation is still the same, strategy is the same. Now I've got maybe $10k left over to reinvest, so at the start of the third year I've got $65k to trade now. Situation is still the same, no liquidity issues, strategy still works. 100% again. So on and so forth; you can rinse, repeat, earn 100% on your account year by year, and it's going to be a while before the liquidity situation changes and your strategy no longer works.

Meanwhile, you earned 30% on your $50k account after one year, and somehow your "longer time frames with smaller returns" is beating my shorter time frames with larger returns how????? I completely agree that a $500mio fund earning 1% a year will beat my $50k account earning 100%. No one is disputing this. What we're saying is that a $50k account is small enough to implement low-risk, high-reward, high opportunity intraday strategies that can make a $50k account a liveable prospect, while earning 30% a year on a $50k account trading longer term is barely enough to cover gas money for the year.

You need to keep in mind the reality of the situation most of us are in. We don't have $10mio accounts, and we have real lives, costs included. The concept of someone taking a $100k account and earning 100% on it every year, while compounding, and not having to ever withdraw or pay out any of these winnings is simply not based in reality. And the thing is, any time someone makes the claim that they can earn 100% (or any other % figure, really), there will always be people jumping out of the woodworks to "prove" that this simply isn't possible, otherwise some magic trader would've done it already-- all the while ignoring all practicalities of the situation.
  • #140
  • Dec 20, 2011 1:46pm Dec 20, 2011 1:46pm
Quoting CindyXXXX
Keep an eye on this guy.
I also discovered his track record the other day, very impressive. Just inspected it in more detail, and noticed that the lot sizes tend to vary strongly over time. There might be a rationale for this, but we can't deny he was betting his account when he took a 50 lot position, which would have gotten him broke if the market moved 45 pips in "the other" direction. It ended up well though, as he made a 125% profit on a 55 pip rise.
Again, my intention is not to talk bad about others, I'm only trying to say that the heroes of today might be gone tomorrow. Probably we'll find that some traders that never will be on the community's radar will end up with the most five years from now.
The nail that sticks out gets hammered back in
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