Why dont we all just do what the real pros do?

Hi all,

After nearly 2 years now of studying the charts pretty much full time, Ive developed a healthy cynicism for the forex market, not to mention the un-ending tide of spam email “holy grail” systems that bombard my inbox everyday. I know real money [I]can[/I] be made from this ugly beast, but as we all hear continuously, 95% of all traders fail in this “profession”, so my question is this: why dont we just do what the real pros do? By real pros, i dont mean proper traders, i simply mean why dont we just do what the retail brokers do? They KNOW the statistics, they KNOW that nearly everyone who tries their hand at this is doomed to failure from the outset, which is why many retail brokers will act as the market maker; i.e. they’ll actively take the other side of your position no matter what “strategy” youre using simply because they know that in the long run, unless you are super disciplined and have a large amount of experience or have a natural flair for trading they’ll get all your cash, just like any bookie in any town takes the other side of your sports bet (although they can manipulate things in their favour by using the odds)

For example, most retail brokerages will tell you that they only make their end from the spreads. In some cases, among the more reputable firms, this is true and they pass your trades onto the “actual” market, but the more unscrupulous will just take the other side of any trade their clients place knowing that most traders will run out of patience or funds sooner or later. If you say that a typical new account for a beginner trader is say 5 grand, then they only need to sign up 200 new clients per year to have a million sloshing around in their client account annually. They would be EXTREMELY FOOLISH if they DIDNT exploit the naievety of these novices and bet against them knowing they will end up with most of this money rather than just taking the spreads. (I dont know if 5k is typical, but for examples sake…)

So, how do we make this work for us? Well, if you assume that 95% of all traders lose money, then is it also safe to assume that 95% of pretty much any system will lose money seeing as [B]most traders follow a system[/B]? In which case, should we pick pretty much any holy-grail type system at random and bet against it? (which is essentially what the brokers are doing) And the more rigid and inflexible the system the better. Or are the brokers simply betting that most traders will lose focus and discipline and end up giving up on their system and just start to gamble to recover their losses (which is a VERY slippery slope that WILL end badly), or just jump from one system to the next and bleed themselves dry? I get the feeling that with a lot of “strategies” out there, it would be profitable to bet against them in the long run and the retail brokers certainly seem to be happy enough doing it. Having said that, they do have the spreads on their side which in my experience seems to tip the odds in their favour just enough - its like having the zero on the roulette wheel; just that extra little bit makes all the difference in the long run. Also, they know that most new traders will have poor money management skills, so if you try and apply good money management to an inverse trading system it may just work out the same anyway

Anyhoo, those are just a few of my bitter thoughts, I welcome any and all comments.

p.s. dont get me wrong, i have found a few strategies that DO work with a certain degree of consistency - but NONE of the systems that get emailed to me daily by the forex marketer scumbags will ever produce long-term consistent results as they claim, and its these sort of false-hope strategies that im really talking about

Now, that’s an impressive rant, I remember having one or two myself, bashing the floor in frustration springs to mind, tears too, that head exploding feeling.

Eventually though I made a profit, but recently after not taking much notice of it for nearly two years I read the ‘New and Aspiring trader’ thread at the top of this page, have a look at that, it contains everything you need to become a profitable trader, and you’ll probably find a few answers to some questions you had, and answers to questions that you didn’t even know how to ask them!!

Have a look at it, dont make the mistake I did, I now expect to move into September, where generally we expect better trading conditions, and this time around, I expect to make 'explosive’profits, rather than good ones, and when we move into a quieter trickier market, I still expect to make very good profits, as opposed to before where consistency was tricky.

I completely agree that anything you buy on the internet is bound to fail seriously, its like buying something off an infomercial. do you really believe using this ab electrifying device will give you a 6 pack while you watch tv in 4 weeks? seriously get real. Seriously if you havent found success in trading it isnt anyones fault. This market 95% thing or whatever. Its about the same percentage to start a small business. how many small businesses or start ups are there every year that continue to exist after that 1 year period is the same as successful traders. So it is completely possible, your success or failure is on you. Yes you can make money filling client orders/being a broker. But you wont make as much as a trader. I worked as a desk clerk in one of the largest futures exchanges filling institutional and client orders. most of our traders out in the pits would break off and trade on their own accounts. Why because its more profitable. There is only one split difference consistency in earnings vs earnings potential. The same thing that differentiates a corporate worker to an entrepreneur. The corporate worker gets a set salary and benefits. The entrepreneur my go broke after trying to start their own company, or be very successful and severely out earn and out grow his corporate buddies. Its all about risk reward, either in life, a career decision, or a trade.

to me reinvesting or developing other ventures or opportunities is just another trade. There are risks, rewards, and things to take into account before you put your money down. Buying a house is a trade, unless you expect your family to live there for 100 years, at some point your probably going to sell it. Therefore its a trade, just a long term one. Buy % equity in a start up as an angel investor and sell out at the IPO or when they are bought out, just another trade.