Yo Hello Forex Heroes , From morocco , im really affraid of trading after Reading That topic yesterday , in the lesson that talk about the markets liwuidity in what is forex , so i searched about who are speculators it and i was very scared because i though that 90% of traders Take a super risk , idk , in samury im so so affraid if there is a big persontage of Luck in the Forex , INeedHelp
Nobody knows for sure what proportions of forex volumes are speculative, because it isnāt a centralized market, so there isnāt even a way of knowing what the volumes transacted are, let alone the motivations of those transacting them.
But authority sites like Investopedia and Wikipedia have been saying for years that more than 90% of the volume is speculative.
I find this easy to believe, because I think the main participants, by volume, are people like George Soros, and investment banks, and hedge funds, and thatās all āspeculative volumeā.
Be aware, also, that when you ātradeā forex with a counterparty ābroker,ā your trades are only bets, and no currencies are changing hands, and these ātransactionsā are not in any market at all, anyway.
Hi, help with what? Regards Greg
This is what our AI friend says. I tried 3 times to get quantification but Co-pilot uses qualitative words in its response.
You
describe all the parties involved in forex trading and their quantitative contribution to the volume of trading in the forex market
Co-pilot
Certainly! The forex (foreign exchange) market is a vast and decentralized financial arena where currencies are traded. Various participants converge, each contributing to the overall trading volume. Letās explore these key players and their quantitative impact:
- Commercial Banks:
- Major contributors to forex trading volume.
- Facilitate currency exchange services for clients (businesses and individuals).
- Engage in forex trading to manage their own assets and liabilities.
- Quantitative Contribution: Substantial, as they handle a significant portion of currency transactions1.
- Central Banks:
- Participate in the forex market to implement monetary policy.
- Conduct foreign exchange operations to influence their domestic currencyās value.
- Quantitative Contribution: High, as their actions impact currency values and overall market dynamics1.
- Investment Banks:
- Actively participate in speculative trading.
- Aim to profit from currency price movements.
- Engage in large-scale transactions.
- Quantitative Contribution: Notable, especially in speculative trading activities1.
- Multinational Corporations:
- Key participants, entering to hedge against currency risk.
- Use various strategies to protect international business profits.
- Quantitative Contribution: Significant, especially in cross-border transactions1.
- Hedge Funds:
- Notable contributors, engaging in speculative trading.
- Trade currencies to capitalize on short-term price fluctuations.
- Quantitative Contribution: Considerable, adding liquidity and volume to the market1.
- Retail Traders:
- Increasingly influential due to online trading platforms.
- Speculate on currency price movements.
- Quantitative Contribution: Cumulatively significant, especially with leveraged positions1.
- Market Makers:
- Essential for maintaining market liquidity.
- Provide bid and ask prices, facilitating buying and selling.
- Quantitative Contribution: Crucial for overall trading volume1.
- Speculators:
- Both individual and institutional speculators actively participate.
- Trade without underlying transactions, adding liquidity.
- Quantitative Contribution: Collective impact on overall market volume1.
Understanding the roles and quantitative contributions of these participants is vital for navigating the dynamic forex market. Their combined actions shape liquidity, volatility, and trading opportunities.
i just want to Know if Luck control forex trades , if its so risky , I can Learn evrything about anything but , the funny thing is i heat luck and I love trading Forex exactelly , i know that Stocks is Less Risky but idk why i love trading forex , i just need some hope to continu it
Hello there! it is understandable to feel worried about trading. while itās true that trading involve risks, many successful traders focus on disciplined strategies and risk management. with my experience I always seek guidance and start with smaller trades to build confidence.
Spot FX market is deepā¦ futures FX market is deeperā¦ FX derivatives market is massive.
Iām not sure what can help you. Scare of forex market, I assume you are overthinking of it. Forex market is not that bad. But it must be told badly, to avoid any timid personality to have involvement in.
You have to realize every single aspect of our life is speculation (99%). You go to a new restaurant, you donāt know how the taste, you go in to have a try. You are speculating it probably can be āeatenā. You sent your resume to find a job, also consider as speculation. Itās a game of number or statistic. The more you send, the more interviews you may have. Even when we are looking for a partner in life, itās also a speculation.
Back to Forex Market, itās true that Forex is traded by speculator for 80%. The rest 20% will be done by institutions. Iām borrowing Pareto Principle here, base on my last data the number, more and less, is about the same.
Take note: Most institution trades forex as hedging mechanism. Profit is not a necessity.
You have to know the 20% of the institution that get involvement controls over the rest of it. The reason is simple the institutionās fund is extremely huge. Imagine, there can be a thousand of us, retail trader. Let say each of us using 1k USD. Our power will be 1 million USD. The institution trader can be only 200 firms. But they are bringing 10 million each. How can we fight them? This is one of the reason of why forex is be said as a high risk instrument. 90% traders is losing money.
The same thing for statement 90% people fail to find their life partner for the first attempts.
You have to know, most traders who trade on retail broker is an OTC product. The transaction isnāt done in an exchange. That means, even you trade 10 million lot, it wont effect the price at all. The price on our chart is price movement by the gigantic institutions and government central banks. So we, retail traders, are only a tiny little bug in the middle of dinosaurās fight. ROARRRRRā¦
As a little tiny bug, we just make a hop, following those dinosaurs. Careful, donāt get stepped flat. You must analyze who are the strongest, suck it blood. Once you feel enough, immediately jumps back to your bunker. Even the strongest dinosaur will get tired and down
I wish this illustration can enlighten you ā¦ Now look at how Goldsaurus will fight USDaurus. Who will win? ā¦ roarrrrrrr
Thank Brother
Trading is a game of probability, if you know how to trade, luck is nothing to do.
hhhh bro you are stoping My bran im just Fighting to learn what is forex But thanks for the information Ill stay Hard
Helloooo! Welcome welcome! I mean, trading is mostly about your strategy and discipline. But I wouldnāt say luck plays absolutely no part in it. And also, about this comment on stocks being less risky, if youāre concerned about forex being easily manipulated against ordinary traders like us, I feel like itās much easier to do that with stocks.
Since youāre already going through the school, Iām sure youād go through this lesson in the coming days, but hereās a lesson about the stocks vs forex thing I mentioned earlier. Good luuuuck!
Thank you very much @ria_rose, I think i just had an emotional War in my brain on Risky Forex
HAHAHA I feel you! I have a lot of those happening too. But I hope you donāt get discouraged by it. Good luck with your trading!
Hhh thanks
for your support
I think youāre scared to lose money. Thatās usually the biggest fear. Next comes failure or losing in general. So what do you do?
Step 1: DONāT trade real money if you donāt have the real money.
Step 2: Trade a DEMO account.
Step 3: Realize that you will LOSE. Itās a guarantee. So you need proper risk management to keep you in the game.
Step 4: Understand what proper risk management actually means. Itās more than just a stop loss.
Thatās a good start for you. Donāt overcomplicate it.
Helloooo! Just wanna check in with you. I hope youāre doing a lot better than you were last week. Have you already tried demo trading?
No I didnt , I Think im to far for it , Im right now just Exploring This world how its working , and its littrelly amazing , i Downloaded TradingView to see the big picture , just a few Days
Yep! Thanks brother for the Great advices