Is Forex reliable?

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It amazes me that there are people on this forum with this mindset - I really hope they're not trading live... Again I'll reiterate Mr Seykota:

lol ..... I thought it was funny. But some people might take you seriously.

I do not trade FOREX... That's for people who want to lose their hard earned money...

Haha, you nub

So as a noob the forex world what is the best way for one to get into the markets and still keep their shirt. Is it best to read books or find a mentor or buy a system? I think there is very good potential but am a bit cautious that so many people fail to succeed.

LOL. true mate

As someone already suggested, start trading on demo (to have as much screen time as possible) and meanwhile start educating yourself about forex. You can do that with reading books, online stuff, or having a mentor, it depends on you. It will take time, but it's definitely possible to get there.

Certainly forex trading business is a very much reliable business so that we can trade in the forex market and make some good amount of money is a safe and steady way.

Yes Forex is very reliable business and we can earn good and consistent profit and it is necessary that trading should be done through proper planning and strategies so that we will be able to achieve our goals of success in Forex.

Im sure you don't make a living TRADING RETAIL FOREX from your HOME... So better stop the LIES and start being honest for ONCE IN YOUR LIFE...

I will bet you anything you want, that you cannot make a living off RETAIL FOREX, during the next 12 months in a row. I can even put a very low entry level, let's understand 3K per month as making a living. This is actually very very low barrier.

Actually the BET goes to anyone in this forum who accepts the challenge. We will do all legal, with signed contracts.

I will bet anyone in this FORUM, that they cannot make a living off ONLINE RETAIL forex, every single month, for the next 12 months, trading exclusively RETAIL FOREX from your home, using MT4 and the so called "indicators", trading on your own.

Actually I posted this several times, during the last months and NOBODY could accept... We all know why...

No comments other than the "huh?" doing the rounds..seriously though, you may want to rethink your offer or we may just opt to take up your bet..

No one will bet for sure from this Forum ....because most of us (including me lol)belong to 95% losers,while the other remaining 5% winners...don't care. lol.

Yes it is reliable, it cost less to invest rather than stocks.

Attached is an example of a trend-following EA (written by my programmer friend) that was tested over 6 years of high quality tick data and more than 800 trades on EURUSD, assuming a spread of 1.8 pips per trade. It uses a combo of directional bias and key price levels for its entries, cuts losses quickly, and lets profits ride — frequently on multiple entries — while trends exist. There is absolutely no curve fitting; varying the parameters has little effect on the overall result. As you can see, it has around a 40% win rate, but each losing sequence is followed by a new equity high, whenever EURUSD enters a 'trend'. And it avoids any dodgy or unsustainable MM (recovery, hedging, averaging, martingale etc): every position is simply sized at a consistent 2% risk of equity. Its edge comes solely from entries and exits that are the result of price-based analysis. This is one of 4 different EAs we have that have backtested profitably, and are currently being tested further on live data.

I call it a 'dumb' EA because it takes no cognizance of news announcements, session considerations, correlation with other markets/instruments, orderflow, macroeconomics, heavyweight bank agendas, supply & demand, weekend gaps, etc etc, i.e. 'contextual' factors that any reasonably knowledgeable (discretionary) trader could use to significantly improve its performance. It is also 'dumb' because it has no ability to interpret the market beyond its coded rules, or adapt to special, one-off or changing conditions. In other words, the EA represents the tip of the iceberg, compared to what is potentially achievable.

Yet, if your research is correct, this 'dumb' EA is smarter than 99.6% of human traders (including anybody who believes that profitable forex is impossible). LOL.

Now, let me anticipate some of your most likely objections:

i) "The results have been faked and/or the screenshots have been photoshopped". They haven't.

ii) "6 years of results prove nothing". Well, how many years would you need to see, to convince you that profitable trading is not necessarily the result of mere 'luck'? Despite the occasional losing month, every period of loss is followed by a new equity high. Why? Because after shuffling sideways for a while, EURUSD occasionally breaks into a decent (D1/W1) move, and the EA seeks to maximize its gains, whenever this occurs.

iii) "Historical testing proves nothing". Well, whether it's backtesting, forward testing in demo, running a simulator, or operating a live account, all performance ultimately becomes historical, due merely to the passing of time. Sure, nothing can be absolutely guaranteed — market conditions (volatility, correlation, etc) do change over time — but the bottom line is that either you believe that the patterns of the past repeat themselves in some way, or you don't. To whatever extent market inefficiencies occur repeatedly, they can be exploited systematically for profit. It's that simple. Beyond that, the only questions involve implementation: your personal psychology, and finding a br0ker who doesn't cheat you.

iv) "The results involve some kind of curve fitting". Again, no data mining was involved. We began with theories that we believed were promising, and simply used the last 6 years' data to test them, because it's all that we had available. The EA doesn't use technical indicators that could potentially be optimized; and varying the sizes of other parameters (SLs etc) has little effect on the overall result. Only 'robust' concepts (key levels recognized by banks; directional bias; cutting losses quickly; letting profitable trades run for several weeks/months) were employed.

v) "The results posted represent the most profitable subset from a larger set of results". No, we used all of the available data that we had; we're not selling anything, and there's no point in trying to fool ourselves, when the EA is intended for our own private use. In any case, you can choose any starting point that you wish, and the 6 months following are on-balance profitable, evidence of consistency despite any market changes that might have occurred during the 6 years. We chose EURUSD because EUR and USD tend to be, on balance, negatively correlated currencies, resulting in more frequent moves. That's the nearest we came to any 'cherry picking'.

vi) "It uses martingale or some other MM trick". No. Risk was a consistent 2% of current equity, per trade.

vii) "The data used in the testing was inaccurate". Data was obtained from Dukascopy. See the test report: 99% modeling quality, no mismatch errors.


So why am I posting this? To correct two misconceptions that you've been spreading (rookies, take note):

1. You imply that it's impossible to trade profitably. ("Nope, it's not reliable. Eventually, you will lose everything in FOREX.")

2. Your "$3k income per month" bet implies that, to be successful at forex, you need to be profitable every month. Not necessarily. Using the EA as an example, it has a few losing months along the way, but is still handsomely profitable overall. Hence many successful traders might not accept your bet, for that reason alone. Moreover, $3k per month depends on capitalization. And to a 'big' trader, you might need to wager something like $100k, to make it remotely worthwhile for them. And how many of these 'big' traders would bother to read the 'Rookie section' here? So I'd respectfully argue that the fact that nobody has accepted your bet proves very little.

Whatever you might think, I'm not here to prove anything to you or anybody else. In fact, I don't think it's possible to prove that any given trading strategy will continue to maintain its edge indefinitely; but I've nonetheless satisfied myself that sound, price-based concepts can remain effective for at least 6 years, and hence will very probably continue to do so in the immediate future. I just get sick of people continually moaning that winning at forex is impossible, and I wanted to demonstrate that it's not necessarily true. This EA is just one of many, many possible counterexamples (my friend and I certainly don't claim to be geniuses; I'm sure it's possible to come up with a methodology — whether automated or discretionary — that's MUCH more profitable). If I may be brutally candid, I expect that you repeatedly post the "99.6%" figure partly because, the more you can convince yourself how impossible forex is for everybody, it makes you feel better about your own failures. I once thought the same way that you did, but I realize now that it's conceit and ignorance to believe that if I can't achieve something myself, that nobody else can, either. Subduing our egos, and acknowledging that we are not the smartest people on the planet, is the first step toward accomplishing anything worthwhile.

[Note to everybody: we will not be discussing the method more fully, nor sharing/selling the EA. It is for our own use only].

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actually , i did accept your bet..... but after careful reconsideration, i deleted my acceptance post several hours later......

btw when you say ,According to Official Broker Stats, 99.6% of Traders LOSE Money in FOREX..., which official broker are you referring to...... thanks......h

Very Nice explanation with supported evidence

Thanks Hanover.

Are you sure this will clear up the misconceptions and carries incontrovertible evidence?.... with the above being said - and very well said indeed, just what the aspiring forex millionaire is ever so thrilled to read, are you not in fact, preaching to the choir? and is the choir made up of at least 1 retail forex millionaire "making a killing" with a secret "trend-following EA" ?

Bla bla bla...

The FACT is that you don't make a Living, trading RETAIL FOREX, Hanover... Same as 99.6% of people... Official stats in the study made by a PhD using official broker data. Again... 99.6% of people lose money in FOREX. You don't know what to answer to this, right?... You can think a response all weekend if you want, let's see how you try to justify that...

Instead, you make a living convincing people to trade RETAIL FOREX, to get them to HIRE YOU and program stuff for MT4... Stuff that will never make them a living.

That's a FACT.

Otherwise, Accept my bet. Come on, accept my bet, Hanover...

If anyone here can make 3K per month for a year trading RETAIL FOREX from their home using MT4, I will give them the equivalent of that (U$S 36K)... If they lose, they give me 36K...

We will make all legal with signed contracts.

Nobody will accept of course. We all know why.

Good idea.
I agree NO ONE will accept.
Point made.

I'm not attempting to preach to anybody. All I've done is provide an objective demonstration that a non-curve fitted, price-based methodology can remain effective for a period of 6 years, and that there's no obvious evidence that it will implode in the immediate future.

As I said in the last paragraph in my post, it's impossible to prove that any edge will maintain its effectiveness forever. Hence I don't believe that "incontrovertible" evidence can ever exist. Nobody can predict the future with absolute certainty, because anything can potentially happen and markets can ultimately behave however they please (hence the need for risk management).

But it's also equally impossible to prove that nobody on this whole planet is making a living from trading forex. The only self-evident FACT is that no matter how many times MapleLeaf says "that's a FACT", it doesn't alter this reality, whatever it might be. LOL.

As for an aspiring forex millionaire being thrilled, he might keep in mind that it's taken me 7 years of fairly intensive study, researching and testing many different approaches, to reach this point. And I owe a huge amount to my programming/trading buddy, whose contribution has been invaluable. I never said that forex was easy. But I'm sure that it's possible for folk who are smarter than I am, to reach the same point in their journey more quickly than I have done. Especially if they can find themselves a good mentor.

You can decide for yourself what to make of the EA's performance. You might want to see 10 years of profit, or 20 years, or a profit factor > 2, or some either criteria. Or you might want to see it done on a live account with a deposit of > $X. Fair enough; that's your prerogative. My research is a work in progress, and I can only ever deliver to the best of my current ability.