On learning curve but moving short and long

Hi All,

I am trying to comfort myself with my substantial losses as being the cost of hard learning.
In fact the issue of FX market is related to an interesting set of variables and puts me in touch with the most difficult concept to understand i.e. money and its value across borders.

I had in the sixties (child then believe me) actually taken small part in bartering(wheat for apples wt/wt) and didn’t know I would end up as an failed FX trader in my late sixties. Fate is so strange…

Looking into Fx variables, my thoughts put them into three types only:

  1. number 1 variable is the psychology of traders. All other sub-variables work through psychology.
    e.g. any or the net of factors [economic, political, health of a president’s stomach, you name it] may suggest that USD will go up and this pushes traders to just cause that by buying USD/selling others.

similarly any analytical method (right or wrong) suggesting USD will go up will also work same way as above because those traders who believe in such tools will just cause USD to go up.

  1. Profit collectors then step in and reverse the direction. Stop losses keeps direction.

  2. brokers intervention, direct deals with banks or through false misleading reports

Is there anything else missing?

In such mosaic I find it hard to measure the net effect. However, I have to correct my previous post as there might be a way to increase the chances of winning, may be considerably but with no certainty of win but certainty of controlled loss. I am testing it on small positions and so far it looks promising.

Sorry if it sounds vague but here a further thought emerged. If it does work well, would I then write a book or design a robot to make money or would I just keep quiet and get FX money?

Regards.

Your model sounds like a reasonable picture of a market.

If you can develop a system that makes money consistently from the market’s price movements, why go through the trouble of doing anything more? Why not just let the money roll in?

adding further to my theoretical discoveries for (completeness!!):

new position openers needs to be added to point (2) above.

My further conclusions are:

  1. any tool that is believed to work will work depending on number of believers populations
  2. since 90% of FX trade is based on speculative traders as stated in the preschool here then assuming my understanding is correct some 90% lose and therefore some 90% of 90% are -with respect to all and myself- “idiots”. if such a large number of idiots are playing the game so how come any rule be found to increase probability of winning.

As a final note: In the UK and for tax purposes, the same trading is classified as trade (CFD) or gambling (betting).

Regards

Kadhiem

I’m [I]far[/I] from sure, reading your two posts above, that I actually understand much about your perspective/outlook/definitions at all, but I suspect that the point you may be missing in the question/comment quoted is the effect of [B]volume[/B]: in volume terms, the 81% (90% of 90%) of people you’re talking about, there, are perhaps pretty close to inconsequential anyway, compared with the other 19% who include Goldman Sachs and “people like them”?

good point indeed but this leads me to think that the big players are somewhat “predictable” and that is the basis of increasing probability of winning by little players.

Also I am not sure why you don’t understand my description of market model, I am just wording it my way from the pool of readings.

That’s clearly my failing, not yours (+ Tommor obviously understood it) - I probably just look at the market differently, and English isn’t my first language, either. No criticism was intended at all … :8: