Forex as a Future?

You need to learn how to trade. I remember you. You are the one who took a snapshot of my fun account to suggest that I am wasting my time here. It is people like you who make unsubstantiated claims based on your own beliefs who waste our time here.

You need to learn how to trade. Your ignorance is showing like a butt crack.

Typical reaction of the forex marketing trolls, shooting against the person, not being able to compete on arguments.....
So Taiwan data doesn't convice you? Would you like data from France or Poland?

Further hard evidence that proofs retail forex has no future and does serious harm to the general public:

http://www.amf-france.org/technique/multimedia?docId=workspace%3A%2F%2FSpacesStore%2F9bf2caa8-1ce4-4832-85f4-4dffcace8644&famille=PIECE_JOINTE

If you read this paper from the French watch dog regarding trading forex and CFDs the whole discussion comes to an end because the truth is laid down in front of all.

Summary:

 

1. 14800 active French retail traders of only regulated French brokers (so all the countless scammers, bucket shops all over the world are not in this data, heavily active on FF are not included). Consider this as a close to best case environment in regards to broker choice.
2. 89% lost money over 4 year period / a total of 161115000 Mio Euros so dont believe those who try to blame the percentage on micro accounts of a few hundreds of dollars . Thats true for brokers in developing countries or third world countries, but there the stats will be for sure much worse than in France. The average loss is more than almost 11000 Euros. More the 7400 traders lost more than 1840 Euros.
3. The broker choice is very relevant in how fast you will lose your money. Average loss at the best broker is 3 times lower than at the worst broker! Thats what I mean regarding stop loss hunting by spread widening, asymmetrical slippage against retail customers, providing excessive leverage, the impact of broker plug-ins ranging form disconnecting the customer for a certain period of time, to delaying his orders, to increasing the numbers of orders that are just partially filled or rejected, etc.
4. Only 112 traders earned more than 24000 Euros over the 4 years period, in total just 10 Mio Euros so they just got a small fraction of the loser pot. I hope its clear to anyone who gets the other 151 Mio Euros?
5. The data clearly shows the more you trade (frequency, volume, exposure), the more you lose. This is very clear evidence that all signal providers, day traders who should be or claim to be more skilled are wrong and most likely just losers and gambling addicts.
6. The data clearly shows there is no learning curve visible over the duration of 4 years. This data shows indirectly that money spent on forex training is most likely not well spent.
7. If this game would be based on skill, then a learning curve would have to be visible, but that isnt the case!
8. Look at the asymmetry of the profit / loss distribution this game is far more rigged against retail traders than all legal gambling in casinos.

Fat tails:
The fat tail of the massive losers > 50000 Euro / 722 traders can be explained mainly by gambling addiction, resulting in high activity, high volume and high leverage. Based on their trading, they feel the full heat of the asymmetric design of the system against them. The brokers must therefore love them. The data proves that the heavy gamblers lose most and as long as they are not broke they even continue to do so after 4 years! Again proof they dont get it! I showed above that 93% of their money goes to brokers, only 7% goes to the retail winners.

And now we analyze the section that fuels the forex retail dream at the fat tail of the 112 winner traders. There isnt enough specific data to prove how exactly they achieve their gains, but there is enough data to look for reasonable explanations:

Statistical probability of pure luck
From a pure probability approach assuming randomness and binominal distribution, the winners as a whole group can still be attributed to pure luck, based on the assumption that the profitability of a positive quarter is 0.32%, a total of 16 quarters and the assumption that at least 8 quarters must end in profit to be part of the winners. However the distribution of the winner itself and especially the fat tail proves there is more than pure luck at work.

Real hedges / non speculative profits
Some of these winners do not speculate at all and are no traders. They have a real business related demand to hedge an real exposure based on their current business. Their gains are offset by the development of the underlying currency between the order of a product, its delivery to the customer and the final payment in a foreign currency. These business actors do take only very few trades compared to speculators, hold them for a longer time period. They are not targeted as a customer by FX brokers, because of their low activity. They should be mainly located in both fat tails, the looser and the winner side.

Skills the dream the forex business wants to sell you in many different forms
If skill would be the main driver of their gains, there should not be a fat tail like this, rather you should see a distrubtion of profits that somehow correlates with increased training and therefore increased skill. You should see a learning curve somehow! However, this data proves once more there isnt a learning curve! The same finding was true for a cohort of millions of day traders in the Brad Barber Paper I listed before.
The Forex Retail Industry wants to sell you the skill argument as the main driver. Skill is a legal base, skill is good, skill is what we aim for in all aspects of life. However, research like this proves them definitely wrong and they know this. I do believe they are lying on purpose, that is there business model.

Information in price data does not give you an edge in long run, that you can significantly profit from it, especially not on a retail basis. Maybe this was partially possible 20 30 years ago, but todays markets are efficient enough to set this bar high enough, that only heavily equipped algo traders & HFTs can profit significantly. There is absolutely no reason to believe that even a single one retail trader is able to compete on this level in the long run.

A fundamental edge
A certain percentage of these 112 winners are not speculating at all. They are trading on a real, existing, fundamental edge using a relatively large capital base and low leverage. The main distinction is whether this edge is acquired legal or not.

Legal fundamental edge:
Trade on a fundamental edge based on legally acquired macro knowledge. This is only possible if you are able to access / screen / proceed / analyze / of as new as possible, high quality data. This information is expensive and the work associated to analyze and process it into tradable data is massive. This is something large organization, banks or hedgefonds with a lot of manpower and the required infrastructure can do. It is highly unlikely that a retail forex trader beats big organizations in this game, however, this is still the base for the next possible reason.

Illegal fundamental edge aka insider trading:
If I would be a regulator, these 112 winners would be great database to look for insider trading cases. A significant part of the winners, I wouldnt be surprised most of them, trade on an illegal fundamental edge, based on political decisions, non public market data. If one trades the news the only thing he can do is chopping of a part of the profits this guys achieve with their illegal edge.in the long run, trading the news without illegal information must make you a loser over time, just based on pure logic.

Market manipulation
I explained how and why I think this is relevant. Some retail traders may be part of larger organized market manipulation scheme, but the relevant manipulations are not made by them. They are far more victims of these activities.


Fazit:

There is no real net value generated for mankind by speculative retail forex trading. Therefore a broker customer relationship can never be a win win situation for both parties in the long run. This business model is doomed in the long run. Retail Forex does not provide a future for retail traders. The forex industry will continue to use billions of USD per year on a global basis to continue their scheme on the cost of business and society. Marketing does work, propaganda does work and as long as regulators, the public and especially the real business sector does not see and understand the parasitary behavior of a large part of the financial industry, they wont be stopped lure in new retail suckers and keep the addicts on hopium.

However, I will deliver my part to make sure the days of this industry are counted all for free with only the aim of making this world a little bit better.

I would be more convinced if you directed your venom at the betting industry where rational people know the odds are stacked against them. Do you? I would be interested to know the difference between gambling and speculation. Maybe you would say there is no value to mankind gambling? Perhaps various forms of art should be banned? What should we all be doing anyway, in your opinion?

I have never had a problem with brokers manipulating the market tor hunting my stops or widening spread to give me a margin call. Just take a look at the current GU chart is this market manipulation or is it supply and demand? I just made 50 pips on it. Do you think the market has a red and green light on it that tells you when to buy and sell? It is impossible to only have winners. Cooperations for example are not in it to win they just hedge against their import/exports, you can even hedge against your own positions in more ways than one.

To win you have to take from the banks from the cooperations and play their game. The market is not manipulated, it just consists of buyers and sellers supply and demand nothing more. The market wasn't created to take money from the little guy it existed for more than 100 years. People have been trading for 1000's of years. The problem is people that know absolutely nothing about economic cycles come into fx and trade off the chart this is fine for scalping if you know how to read PA. They watch a few youtube videos and think they are a pro trader and blow their money and blame it on the market manipulation. If I were to watch a few youtube videos on how to do a lung transplant would that make me a surgeon? Or maybe watch a video read a few books on carpentry would I be able to build someone a house? So these new traders come into the market with no understanding of economic cycles and expect to profit from the financial markets?

You have convinced me FF is full of whining losers and I am out of here this will be my last post. I will however be back sometime in the future as I am in the process with building a website writing a book.

Basically high leverage causes people to lose in most cases... I agree with that and I think we all know that, but using high leverage doesn't make you "addicted to gambling" because leverage can be scaled down as soon as your capital grows, at least that's what I'm trying to do.

Was that directed at me? I am not a troll, you are. You dare to come on a forex trading site telling us we're all fools and you quote a load of statistics of how many people lose in this business? Maybe you should do the same for plumbing start ups, then see how you succeed on a plumbing trades website.

This behaviour is akin to Nigel Farage getting himself democratically elected as a a Member of the European Parliament and then trying to demolish it by actually, in truth, being the founder of the United Kingdom Independence Party.

No, sorry, I've gone too far. Sorry.

Blake was a fund timer and a pioneer in that strategy class. His type of trading is wholly different from speculating the highly efficient and well-arbitraged currency markets.

That said, the systematic approach to trading is something many would stand to gain from.

Same reason a person like myself would touch each other sector that makes up a diversified portfolio.

I sense that you would rather blame the instrument than accept that the responsibility of failure is borne solely by the people who bring it upon themselves.

Wasn't a commentary on leverage.

While traders refer to specific markets and trading instruments the layperson would just oversimplify by grouping most of these as "leveraged trading".

The point being made is that most laypeople are naturally risk averse and fearful of "leveraged trading". This, at least, is a far better attitude than the reckless disregard of risk that some "Forex Traders" are known for.

So let me check what's going on currently in Down Under in the forex industry.......

http://www.financemagnates.com/forex...il-fx-brokers/

Oh oh...looks like everything is on track.....and your right, we have some whining losers here on FF, maybe because 27 forex broker marketing collegues have been removed by ASIC in H2/2015 from financial services? Sorry if I have interfered with your dreams in becoming a professional forex trader....

It is certainly possible to attain long-term profitability in the forex. I've been a member of a trading group for over 7 years now. There are over 90 members in the group, and we all trade using the same basic approach. The key metric used by the group is designed to focus attention of execution, and the second metric measures monthly pip capture ($$$ metric is not useful, since the group has a wide range of lot sizes in play per trade). From my experience, successful forex trading involves: an understanding of FA and their impact on various markets; an intermediate understanding of international economics, finance and banking systems; ability to use TA to measure the first 2 items; a personally-proven and accepted trading method; and strong personal discipline, maturity and control. That's it, but each element is equally important is attaining success. From the perspective of the trading group, there is only one way to get kicked out of the group: consistently fail in any of the 5 areas listed.

No one in the group ever complains about broker issues (although there were a lot of traders who switched from FXCM last year due to risk assessment of their business outlook), random acts of the forex, etc. That's because everyone knows that the approach is not 100%, there will be losses, etc. We focus on execution of the trading plan. A good plan will tell you what to do, with good trades and bad trades. It's up to the individual to execute the plan. If you are not finding success, you should start with improving yourself along the five areas listed above, then fully digest your trading approach, and finally practice execution. With rare exception, complaints about randomness or brokers or whatever are signs of failure in one of the things I just mentioned. And it's always easier to blame failure on something separate and distant from ones self, rather than have to look deep inside and find blame with yourself.

Finally, this notion of everyone failing in the long run is BS. The forex has been doing the same thing now, nearly every day, for as long as I've been analyzing charts. If you can't/don't see that, you have more work to do. Good luck and good trading everyone!

Not everyone can be a successful trader.
Not everyone can be as fast as Usain Bolt, as good at MotoGP as Valentino Rossi, as good at F1 as Michael Schumacher, as good at tennis as Roger Federer, as good at basketball as Michael Jordan, and I can go forever.
Each one of us is meant to be ...... each one of us has a destiny.
You can work as hard as you can but you need talent, luck, passion etc.
When you see a successful person at trading, basketball, football, tennis etc you see the result. I can guarantee you that person before becoming a success has tried multiple ways. You need to find your way and forget money, they are not a way.
If your destiny is to be a successful trader then you will succeed.
There are people that are constantly profitable at trading even after years.
I saw an interview of Valentino Rossi (I'm Italian and really like MotoGP) he is 37 years old and is riding from 20 years now and they asked him "What does push you to continue at your age? How can you still win?" and he said "I love it, it's my passion, I can't imagine a life without riding a bike." Sure winning championships is a great motivation, winning races is a great motivation but he doesn't do it for this reason. It is a competition, he does it to be the best.
Trading is a great challenge, it is a competition and win the best one.
A successful person one day will look at his past and will see that spent time studying instead of going out, stayed at home during nights, weekends, days instead of going out or to party. And I can guarantee you that it will not hurt him because he did it with passion.
I am going to be hard but don't take it personally, it is a metaphor. If today you can't be a better trader than yesterday than trading is not for you. And this is valid for everything in life.

Alex

Hi GEfx

I agree with you in FA ... but TA is BS
Do not get me wrong, all the best for you.

Il Dottore is the best

No offense taken. We use TA to measure "forex processes and tendencies" and their duration. They have a very specific use and only in specific situations and under specific circumstances. TA helps translate the underlying narrative of market structure and PA. But that's just me!

Hud, I'll tell you a true story.

A relative of mine was well into her 30s but hadn't ever left home. Her parents loved her and everything but they were getting exasperated, wanting a bit of space to themselves in their retirement. They had a word with her, and she reluctantly left and found the first job she came across.

Her parents were pleased for a time, but less than a year later, she came back with her tail between her legs, dejected, having found it soulless. So they sat her down again and told her, look, do something that means something to you. She stopped and then it came to her. A lightbulb moment. She decided she'd follow in her dad's footsteps and become an "x" (career removed to protect the innocent).

But again, less than a year later, she came back dejected. "It wasn't for me", she sobbed, "I just did it because I thought you'd be proud of me".

Her parents, exasperated, sat her down one day and said "look, you really need to think on what *you* want to do with your life and then go off and do it! Anything! Just something you really care about"

She went away for a few days and came back, "I've decided what I'm going to do and I'm going to do it. Nothing shall shake me from my purpose in life".

Excited, they said, "What's that? Tell us, tell us! We'll support you in anything you do."

She said "My purpose is to look after you in your elderly years, and I'm going to stay right here and stick at it".

She's still there now, driving everyone crackers

LOL

According to Pfupf, you should be jailed for insider trading !

Many have come along to say this's not possible, that's not possible. That's a rookie dreamer, chasing holy grail and many other restrictive impossibilities.

I say you are limited only by the grey cells between your ears, your passion, your diligence, and your honesty in attaining your goal.

This business venture requires primarily a great brain to achieve the impossible. If you're endowed with one great brain then what's impossible to others is possible to you. It may be impossible and seem foolish to them but not you. What's great to another is mediocre to you.

On the other hand, if you lack then the task to achieve your goal will be impossible. The mediocre to you seems great.

Know yourself and be honest with yourself about your ability in this business. Set goals that are attainable. Don't be reckless to try for the impossible. Walking away from this business may be the best decision you have made.

I not even know what that is