125 Times More Likely to Lose

C

Corso482

In an article posted on another thread, it says that a finance professor has quantified the risk of trading forex and arrived at the conclusion you're 125 times more likely to lose.

How could he have come up with such a figure???

http://www.sfbg.com/38/16/cover_poor.html

Michael Solt, a finance professor at San Jose State University, puts a fine point on the bank account-draining possibilities of the forex game. Sitting in his office, Solt whips out a stack of data – stats on the yen, British pound, and Canadian dollar. He grabs a pencil and circles a number at the bottom of a page full of figures. "See this?" Solt asks. "You can sum this up by saying the risk [of loss] is 125 times greater than the average return on the yen." In other words, people betting on Japanese currency are 125 times more likely to lose money than to make it. The pound and Canadian dollar aren't much better.
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He gets his numbers the same place everyone else does -- he pulled it out of his butt. Last I heard, if you have stops in place, you can't lose more than that, right? And since Forex trends so well, you're more likely to make money if you have the discipline to follow a trend. Just don't use the maximum leverage if you don't know what you're doing.

Well, I'm done. Any more than that and I'll have to charge more than my usual 2 cents.
 
done about the idea that FX trends better than other derivatives "


if so ... is this intraday , hourly , daily ... etc

euro / usd sure trended today on a 5 minute bar chart

after 11 am est
 
Quote from cable:

He gets his numbers the same place everyone else does -- he pulled it out of his butt. Last I heard, if you have stops in place, you can't lose more than that, right? And since Forex trends so well, you're more likely to make money if you have the discipline to follow a trend. Just don't use the maximum leverage if you don't know what you're doing.

Well, I'm done. Any more than that and I'll have to charge more than my usual 2 cents.
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Cable: way to go. Why do people who've never ever ACTUALLY traded the market for at least a month presume to know anyting?
What f-ing buffoon. Should have his tenure revoked.
 
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