Questioning common beliefs

[Forexmospherian]

I am just hearing on the BBC News at 10 00pm that the Serious Fraud Squad will be now making more official investigations into Currency trading in the London Market and the manipulations going on prior to the 4.00pm UK time - which as had a detrimental effect on many Pension funds investments.

Studies have shown collusion between large Banks - No surely that cannot be true(lol)

If that was the case the regulators would have noticed surely ;-) ( joke)

Are all large players corrupt in the FX market ?

Regarding the market being like a "game of snake and ladders"

You got that one dead on Shakone - I used to think it was just another video game ie space invaders - but "snakes and ladders" far better analogue - and let me guess who the snakes are ?

 

[sonofcablemonster]

I am just hearing on the BBC News at 10 00pm that the Serious Fraud Squad will be now making more official investigations into Currency trading in the London Market and the manipulations going on prior to the 4.00pm UK time - which as had a detrimental effect on many Pension funds investments.

Studies have shown collusion between large Banks - No surely that cannot be true(lol)

If that was the case the regulators would have noticed surely ;-) ( joke)

Are all large players corrupt in the FX market ?

Regarding the market being like a "game of snake and ladders"

You got that one dead on Shakone - I used to think it was just another video game ie space invaders - but "snakes and ladders" far better analogue - and let me guess who the snakes are ?

yep forex is the wild west of trading but this can be used to a traders advantage. The technology has existed for decades to enable a centralised marketplace but the big players have resisted. I cannot think why lol. biggest market in the world and someone can drop serious size on it and you wouldn't know if you aren't part of the club. oh well, it has its pros as well as cons.

 

[Forexmospherian]

yep forex is the wild west of trading but this can be used to a traders advantage. The technology has existed for decades to enable a centralised marketplace but the big players have resisted. I cannot think why lol. biggest market in the world and someone can drop serious size on it and you wouldn't know if you aren't part of the club. oh well, it has its pros as well as cons.

Could not agree with you more - and with being no member of the "club" need to find all the other clues when its going happen - a bit like that game - "pass the parcel" and when the music stops.....lol

That brings me to pose another serious question -

Which is more important in Forex pricing - the countries fundamentals - OR - stop hunting for a few hundred mill ? ;-)


I definitely know the answer on that one ;-)

 

[forker]

Banks trade with each other and have zero benefits trading over a centralised fx exchange. There are good reasons other markets are centralised but the same cant be said for the fx market.

 

[DionysusToast]

Banks trade with each other and have zero benefits trading over a centralised fx exchange. There are good reasons other markets are centralised but the same cant be said for the fx market.

I agree.

I don't see any reason banks would want this - although I would like to buy shares in the exchange that creates it!

 

[Sharpreranfaster]

Thats a good one. You know my preferred trading style, using point and figure. That is all about waiting for the breakout to happen, and then some. I haven't been able to get in early with great success, so I prefer to wait for the breakout, and then some more like I say, but the number of winning trades has gone up significantly. I don't mind joining the party late at all. One of my rules is WAIT.
Then if the trade doesn't work, at least I cant kick myself afterwards

Your strategy I think sums up the hardest truth of the markets for everyone coming in to learn. You really can't predict what is going to happen. Yes, coming into a move late means you don't get as much of a win, but you still won, you still got a piece of the movement, and you did so with far less risk.

Hard to argue with it.

 

[Solas0077]

Your strategy I think sums up the hardest truth of the markets for everyone coming in to learn. You really can't predict what is going to happen.

To make money you do not need to predict you just have to know the statistical distribution of returns. In forex for example the spread paid to the market maker induces a large negative shift and the probability of profiting is very small no matter how hard you try or how smart your system is. This blog changed my views on trading. It is a must read.

 

[Forexmospherian]

To make money you do not need to predict you just have to know the statistical distribution of returns. In forex for example the spread paid to the market maker induces a large negative shift and the probability of profiting is very small no matter how hard you try or how smart your system is. This blog changed my views on trading. It is a must read.

Hi Solas

I guess you are a fairly new trader and therefore can understand you reading blogs like this and being "put off" short term intraday trading - (not quite scalping) - but very similar.

Well first of all - The blog for me is totally misleading "rubbish" - and is normally put out by the trade trying to take new traders away from the most profitable way of trading. ie "get traders off the scent" - "steer" them the wrong way etc etc;-)

The first clue why it is rubbish is in the first line - ie simulation - and then further along - random buying and selling based on one method giving you approx 50/50 results. Yes what they are saying - if you have not got a system or method than can give you win ratios ideally over 50% ( I recommend at least 65% on over a 1000 trades ) and you don't incorporate advance money management methods - then yes - you will lose money.

There is absolutely no two ways about it - shorter term trading or trading in the "now" is more profitable than fortune telling / guessing - ie over days and weeks and months. It as far more advantages than disadvantages to other forms of trading

The trouble is - it's harder to do and learn and takes years to get to the standards you need to be really good at it. Coming up to approx 13k intraday live account trades over many years - I should know - and do you honestly think I would still be trading if I was continually losing money ??

To give you more evidence - even the industry went over to HFT ( high frequency trading) simply because it could make a lot more profit than the traditional investment type trading.

A more everyday analogue - is "weather forecasting". I am not expert weather forecaster - but every day in any season - i can go outside and be at least 80 - 95% accurate on what the weather will do in the UK over then next 5 minutes and in some cases even up to an hour or two - pretty good aye ;-))

Now ask me to forecast what will happen weather wise next month or in July 2014 - I have not got a clue and can only just guess - so accuracy - might be 50 /50 or even only 30% accurate predicting weeks and months ahead.

Well that is exactly the same in the world currency markets. During an hour ahead - its more readable - whereas trying to figure out were price will be in February - is pure guessing - as so many variables and so many thing could change to effect the world currencies - ie Obama might be shot - Cyprus might be found to be sitting on the largest oil reserves in the World - Germany and Japan might go bankrupt - etc etc - ie anything could happen - but more than likely it will not always happen in the 10 -30 mins I am trading in the "now" ;-))

Please Solas - on your trading journey - don't believe half of what you read - and if it is connected with the industry - probably only believe 20% of it - the trouble is far too many retail traders think their mentors etc should come from the commercial trading world.

Just go out and find successful retail traders who can proof it with their performance / accounts / history etc - although the majority of professional full time Forex traders would be reluctant to show you all their info and profits for years etc - ie I don't want to even show mine to the Inland Revenue lol.

However you will soon find out over a year or two who the retail forex traders are who can "walk the walk" etc - maybe 5 to 15 out of every 100 traders blogging. You would think with guru's or professional tutors it might be higher - but from what I have witnessed over my 11 years is not supporting this - unfortunately

Hope this helps rather than confuses you more

Regards

Forexmospherian

 

[darktone]

"You need to find a trading method/system that fits your personality!"

 

[Forexmospherian]

To make money you do not need to predict you just have to know the statistical distribution of returns. In forex for example the spread paid to the market maker induces a large negative shift and the probability of profiting is very small no matter how hard you try or how smart your system is. This blog changed my views on trading. It is a must read.

This blog I presume -

http://www.priceactionlab.com/Blog/...-forex-trading-is-a-losing-negative-sum-game/

Well - what an absolute load of tosh - all based on random entries - not on probability scalping or trading at all - so the report is just a total waste of time - spun out by some commercial guys who want to put traders off the scent again - as normal

Trading is a bit like weather forecasting - I am good and most people are at guessing the weather in the next 10 mins or even an hour. Get me to guess in 4 hrs time or next week - and my high probability will be reduced

Yes the fx market is a negative zero sum game - life is a game - we can all die under a bus today or tomorrow if we are not careful

You only trade this game when the odds are in your favour - and for me its probably 10 -30 times a day on any one pair

If i started taking random entries at the wrong time of the day or session - yes I am sure i would lose money etc

However after now coming up to 14000 live trades - I am still here - surviving making money - and with win ratios over the last 10 k trades of 62% on a really bad week up to 87% on a really good week - so calling it 70 -75% on 100 trades - is easy an average.

Next money management - without out that all of us would be losers. The report just goes off on one angle - its totally bias and to put it mildly its like saying its wet when its raining - yes for sure - we would all lose if we did not understand how to play the game
Quote -
The losers are retail traders who trade frequently and the beneficiaries are the market makers.

True - 70 -90% of traders cannot intraday trade successfully

Its an acquired skill that can take years and years with 1000's of hr watching live charts

If you put 95% of drivers in a formula 1 car on a wet road - or 80% of skiers on the top of a mountain in the dark - we would know the answer - yes there would be crashes and things going wrong etc

But for the guys who can hack it - ie done the learning - done the long hours - got the "edge" - fine tuned their skill level - etc etc - they will make it.

The game can only be won consistently or over long term by a very few .

If there are say 1 million retail traders world wide in 200+ countries ( some reports say less than 700k others over 2 million - nobody really knows) then only 3- 5% will be really good - as in most top sports skills etc - but on 1 million retail traders - that's still 30 -50,000 traders

So if you are not one today - it does not mean you cannot get there - BUT are you prepared to go through all the "pain" to get that "gain " ??

Regards

F