That is what I studied at Uni, but never worked in the field.
first of all: i don’t know anyone personally, who is a successful fulltime trader.
second: just by thinking about the theory behind forex leads to the fact, that it NEEDS to be possible and there NEED to be people who make a lot of money. forex is a zero-sum game, i.e. the money one person loses another person gains (spread substracted). it is well known, that there are a lot of people losing money at forex, lets say 95%. this means that the other 5% will make the money, the 95% lost. the question is, who are these 5%, only banks/brokers? well, think about it. the “big players” are also just people like you and me. they are just more professional at that business, because they WORK there. if any person is as dedicated to trading as a person employed at a bank for example, you should be able to make money too.
just my opinion
That’s a good point, I never thought about it quite like that. We know that banks make money from trading, and this trading is carried out by individual traders. If bank traders can make money, why not private traders? Okay, banks train their traders, which makes it easier for them to learn compared with traders without access to this kind of training. However, there are no secrets to trading, it’s just a question of education and practice.
Yeah it is a good point… although the banks have Might in their favor, I do know one guy in the banking industry telling me how his colleague dumped 150 million on a currency pair to do a stop raid, netted a nice 5 mil in a few minutes… so I sorta know one guy out there, but he was cheating lol
first of all: i don’t know anyone personally, who is a successful fulltime trader.
second: just by thinking about the theory behind forex leads to the fact, that it NEEDS to be possible and there NEED to be people who make a lot of money. forex is a zero-sum game, i.e. the money one person loses another person gains (spread substracted). it is well known, that there are a lot of people losing money at forex, lets say 95%. this means that the other 5% will make the money, the 95% lost. the question is, who are these 5%, only banks/brokers? well, think about it. the “big players” are also just people like you and me. they are just more professional at that business, because they WORK there. if any person is as dedicated to trading as a person employed at a bank for example, you should be able to make money too.
just my opinion
95% is a number often quoted, but the context isn’t included. Are they all going bankrupt? are they just at a slight loss? What could really be happening is that 95% of the people are basically 50/50 on their trades, but because of the spread, they lose a little in the long run. You can then accurately say that they all “lost” money, as their account will be under 100%. A few on the lucky side will be in the 5%, but the spread shifts the "break even line above the “zero sum” probability. Basically currency trading is meant to be the exchange of large amounts of money, for a small fee to the broker/facilitator. It pays the broker for time and for the technology to keep communication and accurate market rates available. The advantages in the longer term seem to me to only be understood by grasping concepts that make one currency a better investment, and therefore more valuable than today’s rate. Such calculations involve understanding of a lot of economic and financial instruments. The big time pros have computer software that calculates on the spot a lot of them.
Big difference:
Traders in the banks are not attached to the funds they are trading because it’s not their money, whereas individual traders are trading their own money. The big difference is what you called “Trading Psychology”.
Yeah it is a good point… although the banks have Might in their favor, I do know one guy in the banking industry telling me how his colleague dumped 150 million on a currency pair to do a stop raid, netted a nice 5 mil in a few minutes… so I sorta know one guy out there, but he was cheating lol
Aslo, if you read about what happened with that recent JP Morgan deal. It seems that hedge funds realized one guy was overleveraged (London Whale) and that by just attacking his position they would drive him to a point where he’d have to give in. It was similar to Soros and the Black Wednesday event. Knew that the other side, BoE, couldn’t defend a position/the market past a certain point. These are large examples, but it doesn’t take as much vs small individual traders to hit 100 of their stops, or scare them out of a position even if it is correct.
I am still pretty new so I don’t remember who it is that can actually see where all of the stops are, just the broker? I know Oanda has a service that shows open limit orders just with that brokerage. Or I guess the term is “Order Book”
Nah The banks as well, the guy I was talking to (who was actually about to start working for JP Morgan) was telling me I was going to be “dead meat” because of this very point (banks seeing stops etc) :eek:
Well then your answer is manually exiting trades. Would be funny to reverse it though, knowing they would go for a large amt of stops, coordinate a nice trap of juicy stops, and then take the opposite side hard when they get triggered. Lol not likely to happen but gotta be thinking of ways to counterattack.
P.s., why aren’t we all just pooling our $ into starting our own institution…
I understand what you mean, but this should not be an issue for an experienced trader. You can develop emotional detachment with time and experience. On the flip side, you could argue that since institutional traders are not trading their own funds they are more likely to take unnecessary risks - it’s not exactly unheard of for an institutional trader to come a cropper.
Not bad for a professional GAMBLER
John Arnold: Ex-Enron billionaire trader retires at 38 | Mail Online
meanwhile another ‘-lusion’ (delusion) continues to grip many:
note: A delusion is a belief held with strong conviction despite superior evidence to the contrary