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  • #241
  • May 17, 2016 12:58pm May 17, 2016 12:58pm
Quoting GibsonL6
{quote} I had to look that one up..it sounded dangerous..Lol.. Many people changed the world, who other people thought were asinine....Who knows, I may even change the forex world by being asinine, but I doubt it.. But I think FX traders can also be labelled as asinine....My self included, when I was trading...but I was wise enough to get out...
move somewhere else.dating sites...?mental health sites...?relaxing sites or some hobby sites

what kind of clown spent his 1/2 day in forex forum when he quit trading?
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  • #242
  • May 17, 2016 1:02pm May 17, 2016 1:02pm
Quoting vasily
{quote} move somewhere else.dating sites...?mental health sites...?relaxing sites or some hobby sites {image}
Are you sure? Look at all the interesting opinions this thread has created...Who knows, you might even pick up a pointer or two....
  • #243
  • May 17, 2016 1:26pm May 17, 2016 1:26pm
Quoting PaulDaemon
{quote} Those figures get released quarterly and they are consistant. So are you going to tell me that retail traders profit 30% for ONLY the 1st 3 months then some how loose it all then a new bunch take over??? Sound far fetched to me. Please provide me with some other verified figures that show 99% of RT loose. You wont because its all speculation.

  1. My sample shows the pobability that a trader is consistently profitable (net profit > 0) over x quaters ... which is virtually impossible already for a 5 year period - this is a best case path of the probablity tree - however if you want to make a living from your day trading, there should not just be a profit > 0 but a profit big enough to compensate you for your time and capital invested and risk taken during that period, compared to standard low risk investment and a real job.
  2. It's clear that most traders are not losing every quater, some still manage to get a profitable quater some times...so lets see what this means. You can visualize this "simplyfied" buy using binominal distribution and calculate the probabilty after x quaters, that a trader ends in profit for y quaters. Assumed the he takes everytime more or less the same risk / reward and trades a more or less identical volume (he has a plan and he applies money management), he should be at least half of the quaters in profit (y >= x/2) to come out with a net result >= 0 after x quaters...... so looking over a 40 quater period (10 years) there is only a 1.2% theoretical chance that a trader ends up in profit (>= 20 positive quaters out of 40).
  3. In reality this percentage must be much smaller because of black swan events during this period that will certainly occur and where the money management does not protect the trader from significant draws. It is not hard to understand that a net zero profit after 10 years can't be really defined as a success.... but still such a trader would be part of this 1.2%. In reality, the number of significantly profitable traders will be way smaller, probably less than 0.1%, most likely even much smaller..... impossible? No, but a very very very low probablity......

Maybe this day trading research paper will open your eyes if you still believe the forex marketing machine......it is day trading and not just forex specific, so the results are even better that what you can expect from retail forex, because the stock market has at least underlying real growth and is not (yet) a zero sum game:

http://citeseerx.ist.psu.edu/viewdoc...0.1.1.225.4003

For those capable of reading and understanding this paper, the results are a pure nightmare for the ones selling the day trading dream - p.e. forex brokers and their marketing machines, signal providers.......
One funny detail: Even the 1.26% survivors after > 5 year of trading are still on average net losers as a group...... unbelievable ! The only reasonable explanation in my view for this finding is serious gambling addiction.....Why would somebody be so dumb not to get it after 5 years?

And this data base is huge..... millions of traders over 14 years! And it is just one paper..... you find a lot if you dig to support what I tell you. Retail forex has no future for retail forex traders - but every day millions of potential new victims are born on a global basis so the forex industry does have a bright future.... a never ending supply of suckers seems to be granted....and they never learn, even after 5 years....!

So any more questions, proposals, suggestions?

  • #244
  • Edited 6:41pm May 17, 2016 1:28pm | Edited 6:41pm
Quoting vasily
{quote} move somewhere else.dating sites...?mental health sites...?relaxing sites or some hobby sites what kind of clown spent his 1/2 day in forex forum when he quit trading? {image}
maybe the ones who will make your job a little bit less secure, your profits a bit smaller, but the world for sure a lot better......
  • #245
  • May 17, 2016 1:48pm May 17, 2016 1:48pm
Quoting Atokys
{quote} The high rate of failure has less to do with the traded instrument and more to do with the people trading it. Retail Forex trading just so happens to attract a vast number of people who are inclined to fail. The currency markets don't inherently have something against particular people, its just that the access to high leverage and the ability to trade on a shoestring account attracts the worst of the investing public; the reckless, the stupid, the gamblers and the desperate. Individual success or failure can be predicted: - People who have...
Awesome.., dear...
Trade fearless not careless...
Syed Mohsin Ali Profit This Month: -393
  • #246
  • Edited 10:16pm May 17, 2016 4:16pm | Edited 10:16pm
@nobody in particular:

Everybody has their opinion as to how easy, difficult (or impossible) it is to profit systematically from retail forex. Now I'll give mine. People are welcome to disagree; I'll simply state my view and leave it at that.

Firstly, if you can't find an honest ECN/STP broker, you're stuffed. I've used both AxiTrader and Pepperstone, and I've never been cheated, at least as far as I'm aware. Hence I can't blame my broker for any of my trading losses.

Secondly, I read HudithePfupf's post #202, and while I don't disagree with most of what he says, I think it's a matter of viewpoint. Provided that the big players aren't targeting me specifically -- i.e. I'm small enough not to warrant any special attention -- then I believe I can realistically view the market as being merely an anonymous, inscrutable pattern generator, something like the way in which a kid approaches a video game.

The next question is whether price is a totally random walk or not. This is crucially important, because random games can not be beaten mathematically. If I can find occasional pockets of non-randomness among the generated patterns -- or better yet, find probable underlying reasons for them -- then I have the basis for a methodological 'edge'. (I listed some possibilities as a starting point in myth #22 here). In other words, if I can locate recurring situations that signpost some kind of imminent directional or behavioral bias, then I can potentially devise a system of entries and exits to exploit them. And the non-randomness must be sufficient to allow such a system to overcome transaction costs (spread, commissions, swap differential, etc).

Obviously I must also apply sensible risk management, i.e. size my positions conservatively enough to allow my account to survive an unexpected run of losses, and hence my edge to prevail over the longer term.

And equally obviously, I need the personal qualities (patience, nerve, discipline, self-belief, stamina, ....) to execute my strategy consistently, otherwise it's effectively worthless.

That, as I (and market wizard Gil Blake**) see it, is the mountain that every trader must climb.

A couple of years ago, there were apparently 14 million traders using MT4 alone. Out of the millions who've attempted trading over the years, there will inevitably be a few geniuses, just as there are in every other walk in life: folk who are much smarter, more knowledgeable, and mentally tougher than I am. So the question

"Are there retail traders out there who are systematically profiting?"

ultimately resolves itself to

"Are there occasional pockets of non-randomness in price movement?".

If the answer to the latter question is yes, then we may rest assured that there are geniuses out there who are profiting from forex, despite whatever odds are apparently stacked against them (and their performance is not affected by others' opinions of what is or isn't possible). However, I doubt that too many of them bother to post on trading forums.
________________________

** Gil Blake, interviewed in Jack Schwager's New Market Wizards (Harper Business, 1992), attributed his success to the following formula (see p 248):

1. Focus on trading vehicles, strategies, and time horizons that suit your personality.
2. Identify non-random price behavior, while recognizing that markets are random most of the time.
3. Absolutely convince yourself that what you've found is statistically valid.
4. Use this to set up trading rules.
5. Follow these rules.

________________________


Quoting HudithePfupf
You can visualize this "simplyfied" buy using binominal distribution and calculate the probabilty after x quaters, that a trader ends in profit for y quaters......
Your math presupposes that trading is 100% 'luck', and hence that the samples of winners and losers can be treated as a random distribution.

Consider, hypothetically, an activity that necessitates pure skill (such as the ability to perform a conjuring trick). Let's say 30 people out of 100 know how to do it. Then, if we were to measure 'success' on a quarterly basis, the same 30 people will remain successful in every quarter.

In an activity involving a combination of skill and uncertainty ('luck'), the success rate will lie somewhere between that of distribution math, and the figures in the forexmagnates-published data (say 30%), i.e. somewhere between 0%, if the list successful traders is constantly changing; and up to 30%**, if the same traders (supposedly due to their knowledge and skill) are successful in every quarter. Without seeing the lists of successful and unsuccessful traders, that make up these numbers, all we can do is say that the percentage of losers is somewhere between 0% and 30%. The reality might well be that it's close to 0%, but we can't infer this merely from the data that's been provided.

**Actually, less than 30% for the following reason:
Quoting hanover
suppose 30 traders are profitable, and 70 fail (and quit trading). Then, say 6 months later, the same 30 remain profitable on the br0ker's books, while another 70 have meanwhile failed. And so on. So, at any given point in time, the br0ker will report a 30% success rate, but in reality the number of profitable traders is 30, while the number that have failed is 70+70+70+70+70+........ I agree that's an overly simplistic explanation, and I've picked arbitrary numbers, but I believe that the general idea is valid.
Another piece of missing data is how profitable the traders are. For example, a trader could make 30% in one quarter, and then lose 5% in each of the other quarters. Hence if success I measured arbitrarily on the number of quarters for which is profitable, he would be considered a loser despite being ahead overall.

A PhD student named John Forman did a similar study a few years back, from br0ker-supplied data, and apparently reached the conclusion that around 0.4% of traders were profitable for 4 consecutive quarters (if I recall correctly). More info here.
  • #247
  • May 17, 2016 6:36pm May 17, 2016 6:36pm
Hanover, thanks for the feedback.

I fully agree with you there are pockets of non-randomness in price movement..... I think I do clearly see them, especially on time frames below 1 day, the smaler the time frame the more often they occur. The important question is why do they occur? Everybody tells you that a multi trillion market can't be manipulated. I don't believe that. The forex market is probably one of the best places for market manipulations, insider trading, front running etc, because you can hide your activities in its decentralized structure most likely better than everywhere else and there is sufficient liquidity to move relevant amounts of money.

If it can be done, it will be done and since we are talking about money, the main motive for illegal activity, it is done.

Now I wait for comments like "you can't influence price, the volume is too big".... sorry that's bullshit. Maybe those profiting from this manipulation can convince regulators or politicans, but you definitely fail miserably to convice me. Everybody working on an institutional currency trading level shoud be aware this is not true. Even a customer order of a few billions is big enough to create without any problems moves of 100 pips in a pair depending on when and how it is placed. There is a reason for distribution software that does nothing else than minimizing the impact on price even looking a far smaller real orders by splitting them in tranches, hiding the intentions of the seller as good as possbile to avoid front running (which is done anyway, but to a smaller amount). If such software does work and provide a real benefit, which I believe it does because it is used, why not using the same strategy the other way around? Instead of minimizing the impact you look for way to maximize impact in your favour?

If you compare the > 500% growth of the forex market from 1 Trillion to more than 5 Trillion within the last 20 years against cummulated real world gdp growth (way below 60%)......is there any question where the big part of volume growth in forex came from? No, it is obvoiusly pure speculation..... Based on that I would estimate about 3.5 - 4 auf of 5 Trillion is more or less pure speculation without any relevance and direct relation to the real economy... so a market dominated by short term speculation can't be manipulated????? Really???

My guess is these pockets of non randomness do exist, but the forces creating them are always ahead of a retail trader. Even the smartest retail trader needs some price action to identify such manipulations and extract a small profit out of it, always carrying a big risk being late and getting screwed. You are always behind the ones initiating these manipulations, always! I am sure that today a significant part of the trading volume comes from bots against bots, all of them somehow forcing an price action to create a price reaction and benefit from what happens in between.

I mean there so many ways I can personally think of how I could manipulate a market and looking back in history there are so many proven examples how the finance industry actually manipulated all kind of markets from stocks, futures, gold, libor, oil, silver.... so maybe the best way to put it is that the market is the sum of all manipulations of all participants, whereby the ability to manipulate is very unfair distributed against retail forex customers. They are at the very end of the food chain.....so either one gets it, or finally pays for it.

An as I said the probablity of a retail forex trader being profitable over 5 years is not zero, but already very close to zero.... the 0.4% hanover lists of a period of just 1 year again supports what I have listed. It's even worse.

Just regarding the luck vs. skills question.... in the beginning I thought skills do really matter in this game. They do, but only to a certain degree. It takes longer till the market transfers your money to the ones creating the patterns you react on. Still, if you play this game long enough and I am wright with my assumptions regarding manipulation, you will end up as a looser one day in the future.

So I am gladly run for the next tin foil hat award on FF. Thanks.


PS: For the forex marketing specialists, retail sucker recruiters and system sellers a little goody to make you sleep better....oh ohhhh

http://www.financemagnates.com/forex...g-ban-in-2016/
  • #248
  • Edited 9:16pm May 17, 2016 8:13pm | Edited 9:16pm
Quoting hanover
The next question is whether price is a totally random walk or not. This is crucially important, because random games can not be beaten mathematically. If I can find occasional pockets of non-randomness among the generated patterns -- or better yet, find probable underlying reasons for them -- then I have the basis for a methodological 'edge'. (I listed some possibilities as a starting point in myth #22 here). In other words, if I can locate recurring situations...
I do not believe that price is totally random walk, that's what my observations told me.

Quoting hanover
And equally obviously, I need the personal qualities (patience, nerve, discipline, self-belief, stamina, ....) to execute my strategy consistently, otherwise it's effectively worthless.
With logical reason behind this non-random walk existence supported by empirical evidence, personal qualities takes a backseat and rendered insignificant.

Quoting hanover
That, as I (and market wizard Gil Blake**) see it, is the mountain that every trader must climb. A couple of years ago, there were apparently 14 million traders using MT4 alone. Out of the millions who've attempted trading over the years, there will inevitably be a few geniuses, just as there are in every other walk in life: folk who are much smarter, more knowledgeable, and mentally tougher than I am. So the question "Are there retail traders out there who are systematically profiting?" ultimately resolves itself to "Are there occasional pockets...
That's why I'm of the opinion that other than geniuses of some sort and a very, very few lucky fellas, this claim that it's not too difficult with fundamentals, s/r, trendlines or whatever is plain naive verging on blatant ignorance.

Quoting hanover
......if the list successful traders is constantly changing; and up to 30%**, if the same traders (supposedly due to their knowledge and skill) are successful in every quarter. Without seeing the lists of successful and unsuccessful traders, that make up these numbers, all we can do is say that the percentage of losers is somewhere between 0% and 30%. The reality might well be that it's close to 0%, but we can't infer this merely from the data that's been provided. **Actually, less than 30% for...
I don't subscribe to this subjective idea of knowledge and skill. One might get lucky for a long while even attributing this profitable period to knowledge and skill but eventually the outcome in the long run will come to John Forman's findings of around 0.4%. In the multitude of retail traders, from a statistical standpoint there's bound to be temporary winners.
  • #249
  • May 17, 2016 8:26pm May 17, 2016 8:26pm
Quoting HudithePfupf
Hanover, thanks for the feedback. I fully agree with you there are pockets of non-randomness in price movement..... I think I do clearly see them, especially on time frames below 1 day, the smaller the time frame the more often they occur.
By logic and your explanation on manipulation(and the purpose of it) would have indicated that it's on the smaller time frame.

Quoting HudithePfupf
My guess is these pockets of non randomness do exist, but the forces creating them are always ahead of a retail trader. Even the smartest retail trader needs some price action to identify such manipulations and extract a small profit out of it, always carrying a big risk being late and getting screwed. You are always behind the ones initiating these manipulations, always!
I agree the retail trader is always behind the curve unless one have insiders access, work with that.

Quoting HudithePfupf
Just regarding the luck vs. skills question.... in the beginning I thought skills do really matter in this game. They do, but only to a certain degree. It takes longer till the market transfers your money to the ones creating the patterns you react on. Still, if you play this game long enough and I am wright with my assumptions regarding manipulation, you will end up as a looser one day in the future.
Trading forex is not like playing tennis or football, skill factor is minimal.
  • #250
  • Edited 3:46am May 18, 2016 12:17am | Edited 3:46am
I don't think success in this field has to do with genius at all, on the contrary !

The only way to succeed is through many mistakes, hence a good dose of stupidity along with some blind faith are essential to keep you going after so much frustration.

Wait, Not too much ! one has to be stupid enough to make his 200th deposit, in spite of all advices he received from the wise people (hard workers), but not too stupid to leave his job / lose all his money.

Sorry if I offended someone, please forgive !
  • #251
  • May 18, 2016 2:13am May 18, 2016 2:13am
Quoting vasily
{quote} understanding market is very very very very very dificoult until you understand it.after that you cant forget it "In this wall there is an object, it will take a while to see it, but once you see it, you won't be able to look at the picture without seeing it" understanding is dificult but the structure behind is so easy cuz its under nobodys control.and you have 2 directions to go.black or red and understading it dont mean that you can make 100% winers.risk and reward is diferent topic no one can take all control of market and make it ultra...
Thats the problem with the losers for one they cant spot patterns in the charts amongst other things.
20 Pips a day keeps centerlink away
  • #252
  • May 18, 2016 2:16am May 18, 2016 2:16am
Quoting vasily
{quote} move somewhere else.dating sites...?mental health sites...?relaxing sites or some hobby sites what kind of clown spent his 1/2 day in forex forum when he quit trading? {image}
20 Pips a day keeps centerlink away
  • #253
  • May 18, 2016 2:29am May 18, 2016 2:29am
Quoting HudithePfupf
{quote} My sample shows the pobability that a trader is consistently profitable (net profit > 0) over x quaters ... which is virtually impossible already for a 5 year period - this is a best case path of the probablity tree - however if you want to make a living from your day trading, there should not just be a profit > 0 but a profit big enough to compensate you for your time and capital invested and risk taken during that period, compared to standard low risk investment and a real job. It's clear that most traders are not losing every quater,...
Hi,

Well the 1st thing I noticed the study is localized only to Taiwan, and was done quite some time ago. If you have any idea you would know Chinese Taiwanese Vietnamese are the biggest gamblers in the world. I live in Adelaide Australia I have never been to the casino here but I am told its full of Asians.
20 Pips a day keeps centerlink away
  • #254
  • May 18, 2016 3:05am May 18, 2016 3:05am
Quoting HudithePfupf
So any more questions?
Do you trade?
  • #255
  • May 18, 2016 3:22am May 18, 2016 3:22am
Quoting HudithePfupf
{quote} My sample shows the pobability that a trader is consistently profitable (net profit > 0) over x quaters ... which is virtually impossible already for a 5 year period - this is a best case path of the probablity tree - however if you want to make a living from your day trading, there should not just be a profit > 0 but a profit big enough to compensate you for your time and capital invested and risk taken during that period, compared to standard low risk investment and a real job. It's clear that most traders are not losing every quater,...
Trading is easy if you are patient
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20 Pips a day keeps centerlink away
  • #256
  • May 18, 2016 3:23am May 18, 2016 3:23am
Quoting HeyYou
I don't think success in this field has to do with genius at all, on the contrary ! The only way to succeed is through many mistakes, hence a good dose of stupidity along with some blind faith are essential to keep you going after so much frustration.
Name one self made billionaire who's stupid. Trading success has the same bell curve as wealth distribution and intelligence. 14-15% of traders are marginally successful. 4-5% are highly successful. The rest break even or lose.

http://www.travismorien.com/FAQ/trad...dersuccess.htm
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  • #257
  • May 18, 2016 3:42am May 18, 2016 3:42am
Quoting Jfx
{quote} Name one self made billionaire who's stupid. Trading success has the same bell curve as wealth distribution and intelligence. 14-15% of traders are marginally successful. 4-5% are highly successful. The rest break even or lose. http://www.travismorien.com/FAQ/trad...dersuccess.htm {image}
truth
  • #258
  • Edited May 19, 2016 2:12am May 18, 2016 3:56am | Edited May 19, 2016 2:12am
Quoting Jfx
{quote} Name one self made billionaire who's stupid. Trading success has the same bell curve as wealth distribution and intelligence. 14-15% of traders are marginally successful. 4-5% are highly successful. The rest break even or lose. http://www.travismorien.com/FAQ/trad...dersuccess.htm {image}

It's just a matter of time, especially as retailers to acquire technical knowledge, one does not need particular intelligence.
Just my opinion.
  • #259
  • May 18, 2016 4:05am May 18, 2016 4:05am
Since trading is above all else an intellectual exercise, I don't think it can be done well if one's lacking in that department.
  • #260
  • May 18, 2016 4:16am May 18, 2016 4:16am
Quoting vasily
{quote} move somewhere else.dating sites...?mental health sites...?relaxing sites or some hobby sites what kind of clown spent his 1/2 day in forex forum when he quit trading? {image}
Yeah, this guy obviously has no friends and no life. That's sad. I hope things pick up for him soon.
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