Is Forex trading worth it? If so, why?

funny thing is most people use trading as an escape of some force, but as they (will) find. In the interest of competition in a basic supply and demand sense, all they do is replace the David version for the Goliath.


This doesn't have to be such a bad thing though.

Algo trading is only way to go otherwise ''supernatural power will make you lose''.http://www.forexfactory.com/showthread.php?t=568765

''naked eyes price action'' ''price action based naked eyes''

Because trading is like having one's financial life on Meth.

My point exactly...

Beautiful

Ok... Back in the day before rate speculation youd buy a companies stock because you believed that company is heading places and hence "undervalued"... Here in forex the notion of under or over valued is not so clear cut because of the ways foreign exchange is used for so many different reasons, and for this reason fundamental values can take a very long time to get back in line...


So how many people who buy tye GBpUSd fir some valid reason have an actual idea of the inefficiency they are exploiting or the value it "should be"... And out of those few individuals, how many can actually time it properly coming out ahead over 100 trades?

imo this is why.. People are obsessed by Support resistence and momentum but have no idea where their bus could go... Its kind of a no brainer when you think of it like that.

I think one extremely important fact folks overlook is forex trading shouldn't really exist. Its quite strange & not reality-oriented at least in genesis as other established markets, say, oil, or AAPL stock, in a very real mystical sense.

Say AUDUSD was par, then a second later, not. Why should 100 yards equal 91.44 meters one minute then 100 or something else the next?

The story unfolds long before Roosevelt moves gold around up & down to $35 an ounce & whatever the hell.

We've been slowly trending towards dictatorship. Banks today, are regulated like hell.

You know what I read today? Fannie Mae now has a new flexible housing program.. guys its nearly 2016, not even 8 years after the financial crisis & there's a program for 3% down & non-borrowers like parents sign on the mortgage & the "strict" evaluation metrics are more like 'John Doe & his wife both have jobs, & at this fixed rate mortgage, they're under 60% debt-to-income' .. approved.

What happens if Representative Agentall banks in the U.S. have income from 4% fixed mortgages on one side of their ledger, & the Fed has jacked up short-term interest rates to 6% such that they're de facto paying out depositors 5%leaving a larger than 1% hole (expenses) called losing money every day?

The same shit every cycle after the Fed raises rates to fight growth so much.. recession.

After the Nixon shock in the 1970s, Milton Friedman was paid by the Chicago Merc to do academic papers on currency futures to fill the void of objective-yet-still-relative monetary values. The result is what we have today. Not that 'the banks started trading currencies like this ["quasi setting it all against you, zero sum"]'. There's a real speculative & sort of merchant money-trade finance-tourism need in an immediate aftershock in the 1970s there. Sort of like suddenly trading cryptocoins if the forex market disappeared tomorrow. More: on a meta-technical political-economic level, it just so happened.. take AUD again, futures probably from memory traded before the float, & the country was under fixed exchange rate for years. Then gov arbitrarily says, 'first day of trade banks.. AUDUSD's gonna be .95 cents'. Why not -0.10? Why not flip the chart & go through zeroes. Its all quite arbitrary. And you can see it how foreign exchange values trend: relative central bank interest rate hawkish or dovishness.

Forex in that sense, is extremely sad. A sorry state of affairs. An originally initiated arbitrary value market maked & heavily traded by semi-grounded, rational entities who shouldn't stoop to that level, but.. coercion against them.. the financial sector.. after a few banks started trading like this why fight it? Such is why it exists.

Some economies that do well from fixed-exchange rates?

The UAE (Dirham).
China (Renminbi).

In the latter, most U.S. industrial production de facto happens there in part because you could build a plant & do some business & have its FX value be the same 30 damn years later. 30 years being often what serious long-term planning requires.

No man in his right mind after the U.S. civil war would voluntarily trade Bitcoin & Litecoins against each other for no reason given the alternative of sending his capital & earning interest on a railroad bond with a 4% coupon under neither monetary inflation nor deflation (just price deflation, cost of living falling, from productivity gains).

This is a problem plaguing the Euro too. Imagine how many deep value equity buyers out there wanted to buy Greek stocks at roughly the same price they are now, but at EURUSD 1.20, thinking it'll go lower.. that its undue risk.. so they wait it out.

Look at even some of the semi-good retail brokers, they 'feel charlatan'. Its disgusting. See how quick FXPro took its home to the UK over Cyprus?

The FX market is shaky man. Not intrinsically shady.
Shaky.

1 / access wikipedia - Keyword search: forex market.
2 / thought as speculators: buy cheaper - sell expensive.
3 / cause appreciation of currencies and commodities.
- When inflation ==> higher commodity prices ==> sales rose ==> the company owns more cash ==> rising consumer demand, bank deposits fell ==> banks have less money in the treasury ==> want to borrow or exchange money at the bank will be more difficult. ==> Currency appreciated against foreign currencies but depreciated against the goods.

What speculators today do with currencies, interest rates, stock indices, commodities etc. is the same thing as what speculators many years ago were already doing with railroad/motor/mining stocks, onions, pork bellies, cotton, grains etc.

I was thinking there just might be a sure fire way to win at Forex, and it's a lot simpler than most of us ever dreamed... anyone remember that episode of Seinfeld where George realizes he's followed his gut instinct his entire life and it's always led to failure? What if we just trade opposite to the initial gut reactions we would have had as beginners?

True, i guess i was just trying to say that the main reason this is so difficult ( for most) is the random walk the market can take after your entry, and seeing as its hard to stay confident in a trade whilst they're sqeezing or not squeezing without some confident notion of the eventual destination, participants are constantly at the mercy of the machine which moves only when it is ready to do so and pushes people in and out right and wrong directions as it accumulates the line...

This is all i meant. Like someone said earlier we're kind of meant to lose.

Try it.... Unfortunately there is no correct entry until you know what you are doing. The market will eat you for breakfast, lunch & dinner on both a buy and/or a sell.
Figure out that riddle and you will be on your way to profitability..... if you aren't already.

So again.... "The market will eat you for breakfast, lunch & dinner on both a buy and/or a sell."

Why?

There is no royal road to riches in speculation but a few simple rules can at least give you a fighting chance. They are as follows:

- Ride your winners
- Cut your losses
- Manage risk

The "why" trade forex is a complicated one, I believe that many people do it for hope of a better life, if nothing else. Some trade to alleviate boredom, others are gamblers and enjoy the rush. The amount of money that's theoretically available is only limited by your imagination, and that's a big part of the problem.

What makes a successful forex trader then? Here's some attributes that I believe make a successful trader (in no particular order):

1. Be interested macro economics and fundamental analysis. If you're genuinely not interested in why things happen and the flow on effects, if it doesn't stimulate you intellectually, then maybe trading isn't for you.
2. Learn technical analysis, if for no other reason than because everyone else is doing it, especially forex traders.
3. Understand foreign exchange market structure and who/what really moves the markets.
4. Lower your position size to a point where you're relaxed about the money on the line.
5. Find a mentor and experienced trader that you can learn from
6. Do not trade a "system", trade the market. This isn't blackjack - this is poker. If you understand the game and how it really works then I believe that you have a chance at taking some crumbs from the pie.
7. You have to be emotionally self aware. Lots of books on Trading Psychology, "Trading in the Zone" is the best place to start.

That just the beginning. There's so much more to write on it but to be honest, there just aren't that many "traders" out there who are willing to learn. Everyone wants the quick dollar. Unfortunately, most people (myself included) are only capable from learning after they have made the mistake and discovered for themselves.

Well said

Really like what you say here Scottik187. Thanks for posting. In my opinion...One of the most, if not the most insightful posts on the thread.

The truth about the forex market and any other markets is: This trillion $ day business is not about you or me, it's about the big monies.Almost all traders try to speculate and predict where the market will go intraday, without realizing that this business is not about prediction, but it's about letting the market reveal its intentions for the day b4 you jump into a trade.
Another reason traders fail is: they all use same set of indicators. MA,Stochs,FIbs,RSI, etc. EVen if u use a 1 EMA to find direction, it still has a lag time, coz' it can't do nothing on its own until price moves.
I quite agree with Martin Cole when he said: let the market reveal its hand b4 u can do anything.
For you to know what u're doing, u gotta look at price and nothing else, price is the ultimate indicator, but unfortunately, most pple got a wrong perception 'bout price action.
MY little, advice is: study price to really understand how the SM manoeuvre and manipulate price, to really understand it for yourself.Dnt b fooled by indicators cos they will never make u earn money on the long run.
Jst my thought.

Ok, so the OP Cubbybgood has changed the discussion to .....

.... which is unfortunate because now it's basically a why do traders fail thread which is a bore-fest . Sorry but there is only one answer and it's a simple one. There are broker stats to prove it. A staggering percentage of traders fail because they don't take their profits. They are in the money, leave it and then go in the negative. No exit plan, no money anytime soon.

C'mon,.... everyone say it with me.....,"GREED"