Forex - a big illusion?

Trading Discussion
1

Hey pips and pipettes,

I’ve been wondering - have you ever met anyone personally who actually made money of forex? And I mean someone real and impartial. I do NOT mean some random guy over the internet or a blogger, and also not a broker with an interest in your funds or a guy who wants you to buy his book. I mean someone you know personally and can verify he’s not full of it (bs of course, not money).
My broker who also taught me to trade always tells me of some client of his that got the hang of it or some junior broker in his firm that knows the business, yet I keep asking myself - if he personally or his junior broker knows how to make money from forex, why oh why is he still working at an office job? I mean, give me a system that works just 40% of the time and I’ll be a millionaire in a year and a half, I’ll quit my job and start developing hobbies. But here’s something I will NOT be doing - sitting at an office wasting energy and nerves trying to convince potential clientele how they can make money if they are well educated, disciplined and careful, etc. etc…
I enjoy cruising the demo but risking my real hard earned money? Not sure 'bout that at all.

Now personally I met someone who became a millionaire from a 3000$ account in less than two years, but he was trading stocks and he was a genius (a lucky one at that). As for forex, everyone likes to talk big and mention strategies that work 70% of the time, but it just smells like bigfoot sightings to me - everyone knows someone who saw one, heck, there are even self proclaimed bigfoot experts, but no one actually saw a bigfoot himself.

What are your thoughts?

2

Well what d’ya know it’s [B]that[/B] time again (huge yawn), & right before the weekend too…………………………………what a surprise.

Yet another joker (or perhaps the same one under another fresh banner) intent on lighting the blue touch paper, standing back & watching all the fireworks go off.

Do everyone a favor pal, delete this pile of (insert expletive of choice) thread & go look up your hot shot stocks trader acquaintance.
If your genius is half as lucky as you maintain, he might be inclined to throw a little of it your way - & that will save you from wasting your valuable time searching for bigfoot.

ps; if enough folks report this garbage as potentially inflammatory content the mods might get around to binning it quicker than usual & save on all the drama this stuff usually attracts.

3

Take it easy. He wasn’t being inflammatory in any way, he just asked a simple question.

On my end, no I do not personally know anybody who is now ‘made’ because of forex.

4

I have met several people. A few of them made a few hundred thousand trading in about 2 years. Then one of them decided to take it slow from there, and only place swing/position trades, as the daytrading was burning him out. Once you reach a certain account size, then making 20% a year is a good amount of money to live on. So you do not need to pressuring yourself to make 100% per year with a small account.

Most people do not stay in the game long enough to learn how to be profitable. A lot of people can get lucky and catch a winning streak and experience the euphoria of a few winning trades. But trading consistently and pulling pips out of the market every month takes some decent skill. It’s not hard, you just need some good information to work with, and a good mentor if you can.

5

Wow… you’re pretty angry with life aren’t you?

Anyway, for the sane replies - a couple hundred in two years is difinetely impressive as far as realism go. And yea, I suppose once you reach a certain capital yearly precentage is what you start to look at.

More stories would be appreciated.

6

I’ve never met anyone in the flesh who was a real (self-made) trader. They’re probably all around I’m sure. But then if I was a kick-butt trader I’m not sure I’d go around advertising it either. Especially in forex I think the real traders are a lot more spread out (since its a global market).

Read some of Jack Schwager’s Market Wizards books to get inspired about real traders. I believe there are 3 in the series.

The broker is still working because he can’t figure out how the real traders are doing it. Some people are just that way, they are “content” with the stable income of traditional slavery (ahem, I mean dayjob).

7

You know I think this thread has an absolutely valid question.

Just the same as if you wanted to become a pilot cause you had heard it was awesome to fly, but you had never seen a plane or actually met a pilot, just heard stories…

Like you I have my doubts… only ever seen the hype… & yeah your question is so valid!

But I just remembered talking to a relative a few years back at a family do. I asked him what he was doing, “Forex!” I didn’t even know what it was at the time lol!

I remember him saying he was making 60% on his money or something, haven’t seen him since, (probably margin called) :slight_smile:

8

As a matter of Fact…I have actually met 3 different people in real bodies, with thinking brains who have made money in Forex. All 3 of them I have been too there houses and seen there wealth. One is a former business owner of a construction company, the other 2 are in commercial real estate…all now retired. As for the business owner, a number of years ago I met Bill and his wife Collette and I began selling investment research pertaining to stock options too them. I know personally that he has made over 500,000 in forex. I have seen his personal documents on this. As for the 2 commercial real estate friends, I know that they have made some money in forex…but not as much as Bill and Collette. The interesting thing about all 3 are that they all had a business plan BEFORE they began trading forex…They typed out there own trading plan, trading percentages, losses, capital required and long term strategy. Remember that Forex is a business…whether you perceive that way or not. You are competing against other businesses with websites, dealing desks, research depts…so on and so on. Most small players NEVER make serious money because there failure to view Forex as a business…a serious business.

When I started trading stock options a number of years ago…I had no plan. I then realized after some losses that I was the problem. I believe there are lots of people who make money in forex…most of them have well developed strategies and plans laid out on paper or in there heads. As for your question about forex people making money…they are there…quietly going about there business plan.

9

Cool post man! Did the people you know had a deacent capital to start with? ‘Business owner’ sounds like good capital potential for an initial investment.

And are you still in options or do you mix it up? Options down right scare me, but I’ve been personally thinking to add forex to stocks and mix it up a bit.

10

I am new to the Forex markets, but I am an experienced trader in other investment fields. My speciality is NYSE/NASDAQ stocks and stock options. I made a majority of my trading income from those areas. The area that I really enjoy most is investment research, that is how I met Bill and Collette. I do not know the exact amount that Bill and Collette started with, but they are well capitalized…so I am assuming he probably started with a good size account.

When I do my own investment research, I use Excel 2002 spreadsheet and view the data as following (Technical Analysis 98%, Fundamental Analysis 2%)and I chart the Forex currencies in Daily, Weekly, Monthly, Quarterly and Yearly formats. I then will lay out my strategy for 2 plays per week…one primary play, one secondary play. Right now I have been playing the EUR/CAD as my primary play, the USD/CAD as my secondary play. Regardless of what happens in the other currencies, my focus remains steady with the Primary/Secondary objectives.

I view the Forex charts in this order:

Yearly first to determine long term movement and trend
Quarterly to break the long term into 4 more manageable sections
Monthly to determine the monthly highs and lows, areas of probability
Weekly to sharpen my trade areas and possible trouble spots
and of course Daily…highs and lows…broken down into hourly sub sections.

I do use any tick data less than 5 minute, I usually view hour data because it is less distracting. I have been playing 3 contracts, looking for about a $1000.00 a day NET PROFIT. So far so good. Hopefully I have an excellent year.

11

That is actually not that far from how I was about to play the forex markets. Demoing it so far though…

12

…yeah it’s a big illusion, happy? now go and do something else and leave us deluded in peace.

13

No, don’t think I will. But thank you for agreeing.

14

Sort of can’t believe that I am going to bite and respond to this thread (no disrespect to OP, it is a fair and valid question, it just does the rounds on here), but this sort of debate can shake the already-fragile confidence of some new traders, so I will add my thoughts: yes, I know people who make proper money from Forex. I speak with them about trading, so have also had the opportunity to see, over an extended period, which trades they are placing and how those trades work out - I have seen what they are placing real time, so it is not possible to fake the results. Sure, there are losses, but these are handily outweighed by the gains.

I had a similar concern to that expressed by the OP when I started to scratch the surface of Forex trading shortly after starting out, so it was very heartening for me to see, in detail, that this does work.

In terms of making serious money from this, even assuming you have a decent strategy (sounds easy when I say it quickly!), it still requires a good account size, which is harder than one might think the come by. You are talking in terms of big houses, cars etc. Well if a good strat doubles your money each year, you need a very large account indeed to draw big money as an income. So it takes time. To get the big % returns you need to put the time in and not draw an income while the account is growing and you learn your craft. To put this time in alongside a regular job is difficult. The psychology also gets harder, for many, the larger the account.

So in summary, my own view is that yes, Forex works, but making proper money at it is by no means as simple as sticking ten grand in a trading account and waiting a few years. You can make some money like this, and compared with sticking it in a bank you can get a great return, but you won’t change your life in the short-medium term. You need either to fund your account more heavily (which is fair enough - we can’t really expect something for virtually nothing in the short term) or accept that it will take longer than some of the advertizing suggests.

It works, it just isn’t easy, so it does not work out for a lot of people, which increases the number of people in the world who say, ‘Forex doesn’t work’. What they should be saying is, ‘I couldn’t make it work’.

15

as long as you know it takes a lot of hard work, it’s not an illusion.

16

even then it’s still a mirage.

17

personally, one of my dad’s best friend is a successful trader. but he doesnt trade forex, only gold, and other metals. he deals straight to london exchange market, so the quanlity is quite big. he trades solo now in shanghai.

I also know somone is okay in forex trading, after trading around 4 years, he starts to getting profit. ithink its about experiance, system, psychology and money management.

GL trading guys :wink:
cheers

18

Ok, so my word on that. Statistics 95% loose 5% wins. From the looks of it, everyone is in the 5%. Although in real life, you would reaaaaaaly rarely meet or even hear a person from the 5%. There are hundreds of self proclaimed winners, liars and losers who don’t want to be accepted as losers. So them and other losers, claim fake numbers, claim that they are wining, and all of it is just a big pile of c**p. Most (if not all of them) of the people you know, hear, talk to are in the 95%. The rest, are just insanely rich, and don’t give a ding-dong about forums and sharing their secret ‘grails’.

19

My outlook changed a bit since I started this thread after doing more research and gaining some experience. I understand this market a bit better now for all its faults and positives.

I also think that that the ones who found a good profitable system wouldn’t want to share it for one main reason - they’d be nervous the efficiency would go down if more people knew about it. Because they are effectively making money on the backs of the 95%…

Speaking of online liars, check out this guy:

Create Your Own Forex Trading System in 2 days!

More specifically what he says at 7:06-8:26

And we have this article by the School of Pipsology:
Mechanical Trading Systems | Create Your Own Trading System | Learn Forex Trading

More specifically what is written at paragraphs 8-13:

You may notice it is the exact same speech - WORD for WORD.

So do you think he is related to babypips or did someone commit a little plagiarisimo?

20

There are people in every profession who talk a lot of nonsense. Once you have been around a while and know what you are doing you can generally spot them and filter them out. It does not mean that the profession doesn’t make sense.