So you’re continuously in the market and you set and release hedges?
1 Like
I agree that non directional trading is a valid approach to the market. However I thought that was done with options spreads.
Was not aware it could be done with currency markets?
2 Likes
exactly its not a casino
1 Like
Hi @Johnscott31
I have just looked back in my archive files for metadata on this one. Around 2009 I started following a post on Forex Factory from pipEASY titled “Building an Equity Millipede”, that ended up with a few thousand posts over nearly five years. I downloaded the entire sequence to around 2014 in .pdf files and spent tens of hours reviewing the significant amount of material there. The author purported to have entered Forex with sum of around $300K to trade and continued to direct a profitable goods trading business that required very little time input. He said that at any one time, his hundreds of “little soldiers” that were individual Forex trades mostly put on with $10 or $20 stakes with not more than 5 pip stop losses ranged in value up to $6 million, and when he could cash out $10M, he was going to exit Forex. I have not had time to return to that post but I know it is still on Forex Factory. Some time I will get time to see the final outcome. But I think that was an extreme example and is also closely aligned to what our colleague @MikeWolski is trying to achieve in his Journey Journal section on here.
3 Likes
People will consider anything that sounds a risky. It all comes down to have a proper discussion with that person and letting them know what it could do and could not do to change their mind from thinking of that
2 Likes
I think people just don’t think.
I have a friend who is a shipping agent moving goods from Hong Kong to the US.
He does NO marketing whatsoever - relies solely on past clients and word of mouth.
And when we discuss what I do he says that I am the one gambling!
People who have never been traders are never or will never consider the question for more than a second.
And why would they?
They think because Nick Lesson broke Baring bank anyone who trades futures or any market is a gambler.
It’s lazy thinking, but unfortunately part of being human.
For my own part I consider gambling - the chance of a monetary reward when the odds are less than 50%.
And not gambling when it is more than 50%.
So I generally don’t see trading as gambling, but there are times when we go into gambling mode when we as traders start trading on impulse.
4 Likes
Really loved reading your posts, you are giving such a great understanding on these matters.
2 Likes
Everyone’s definition of Gambling is different…
Some more food for thought…
1 Like
Good article, not so sure I fully agree though
I suppose the ultimate question needs to be
‘Is setting up a business a gamble?’
If the business community is happy to say running a business is a gamble I am more than happy to say the same about trading
The article says anything that involves money, risk and reward is a gamble with that said even buying a house is a gamble then.
When all said and done I care not what words are used - if your profitable - who cares?
1 Like
Because when I say opening a business is a gamble, or crossing the street is a gambling they begrudgingly have to agree
1 Like
Your friend is a realist… Just like me… who clearly understands that most successful enterprises are fragile… China recently annexed Hong Kong, so unless he has ties with the ruling parties, it’s possible he has just thrown a pair of one’s…
Like I have stated previously… If you wish to “play” in the OTC (Not Share) markets you are effectively Gambling. Have a read of your Brokers (MM’s) T&C’s and it will reveal similar fineprint to any online Casino or Horse or Dog Betting application available today…
If you threw a coin for a heads (Buy) and tails (Sell) result 100 times in a row, such as trialed here and here you would expect an outcome of 50/50 or maybe 60/40 win or lose… Add in Spreads, Swap and erratic price spikes and the result will be 80%+ losses each and every time…
Yes, money can be made in these malevolent markets, but rest assured… The House “Nearly” always wins…
20% of businesses fail within the first 12 months … another 50% have failed within the first 5 years, which confirms It’s definitely less than a 50% success rate… What was the question again??
1 Like
its a very good post with more fine lines , Forex is a professional trading platform and it follows its own trend. we generally took this as scams and for all time try to bring profit very rapidly with no learning.
1 Like
All valid points - so maybe the question needs to be
‘Can you make money in the long term gambling?’
1 Like
My point about business is not so much the failure rate of which I’m aware but would the business owner say they are gambling?
1 Like
That’s the point I’m trying to get across… Does the Entrepreneur know he is gambling??
Most startups are funded by savings, remortgage of property… etc. etc… Anytime an Entrepreneur puts up capital that could potentially be lost… “he is taking a gamble”. And just like the traders we are, he tries to improve his odds with a business plan, prime location, superior service or products… all these attributes improve his “chance” of being successful… All this looks familiar…
The Forex Trader deposits savings into his Brokers account…Anytime a trader puts up capital that could potentially be lost… “he is taking a gamble” And just like our aforementioned Entrepreneur, he tries to improve his odds with Risk Management, consistent pairs, superior Indicators/Bots or strategies… all these attributes improve the Traders “chance” of being successful… Begin again… Repeat again…
I have nothing against Gambling (Non-addicted), You can sit at a Roulette Table and say, use a martingale system on say 1-18, over the short term you maybe up a few dollars… but you can guarantee the houses 1.6% edge will have you give it all back over the long term…
1 Like
You put the point across well and I agree.
Whether a business owner or trader we believe we can improve on the odds due to our skill level.
Whether we can or not remains to be seen.
1 Like
u dont need to worry what people think
3 Likes
So from your point of view, opening a business or crossing the street is considered to be gambling ?
@Johnscott31 I don’t think it’s possible to make money by gambling for long term. Trading requires a very sound, calculative and composed mind. As Warren Buffett said, Risk comes from not knowing what you are doing. And in gambling this is what happens.
2 Likes