In a coin flip, probability of a coin turning up head or tail is 50%.
Keyword here is “probability”.
Probability is the measure of the likelihood that an event will occur.
Another keyword here is “measure”.
Measure is define as ascertaining the size, amount, or degree of (something) by using an instrument or device marked in standard units.
In Forex, trader attempt to project a future price using one or many metrics.
End of the day, the truth is that we trader are actually trying to be a fortune teller.
Henceforth, comes the question, is the future forcastable?
The sad answer is “NO”. However, traders are self motivated by their desire for the money to succeed.
We trader have choosen to place ourself in our current path of playing the GUESSING game.
Trader who have got the future right more times than wrong are skillful.
They are people who can make clever guesses using some form of metrics.
Traders who have gotten the future wrong more times than right but still make money end of the day are LUCKY.
They must have manipulated the lot sizing and have gotten it right when they traded a huge amount.
Then there are traders who got it right more times than wrong but still loses money.
They must have traded a huge amount when they are wrong.
So, skill can be define as
- ability to make clever guesses using certain metrics,
- ability to follow good money management rules to mitigate risk.
Luck can be define as
- making money when you are wrong
- losing money when you are right
Now this is a confusing situation. Is forex more skill or luck?
I think it is a paradoxical situation. And relative question.
It seems that forex can be EITHER more skill or more luck for different individuals.
Therefore i conclude that whether forex is more skill or luck depends on individual perception on the matter.
It depends on their belief. My personal take is that if you are making money, Forex is both skill 100% and luck 100%.
And if you are losing money, Forex is both skill 0% and luck 0%. It can only be 0% or 100%, there is no in between.