Back-test performance
- Thread starter M Brown
- Start date
At a 90% winners avg, you would have to risk 3x+ what you stand to gain per trade. That's a fact in real trading. No ands, ifs or buts about it. The stats are not showing this to be the case. So it's all insta-bogus, don't waste your time.
Save your money and trade the NQ, YM or RTY futures. You should be craving high volatility in order to stand the greatest chance of success in the long-term. Currency trading is a total krap market compared to the e-minis [Notice I left out the ES...too choppy by comparison to the other three].
Save your money and trade the NQ, YM or RTY futures. You should be craving high volatility in order to stand the greatest chance of success in the long-term. Currency trading is a total krap market compared to the e-minis [Notice I left out the ES...too choppy by comparison to the other three].
You may want to reconsider. Are you aware of the daily total turnover at Nasdaq? Around 160 billion USD. Currency markets turn over around 6 trillion USD per day. Currency trading is about the cheapest way to participate in financial markets, bar none. Who else charges you 0.2 basis points average commission with an additional 0.1-0.2 basis point bid-ask spread? Any stock on Nasdaq or NYSE trades at significantly higher transaction costs, with many additional regulatory hurdles in order to short-sell, for example. I obviously recommend trading with a reputable broker such as IB. Nowhere else can an investor get in and out at such low cost. So, I am not sure what you mean with krap market? Crap brokers perhaps?
The banks defacto set currency rates. Forex really isn't a good market. The currency futures are liquid (perhaps not as liquid as forex) without exposure to bank fraudsters that appear to pop up every 3-5 years.
Supply and demand prices currency rates not banks. What you are claiming is like saying that market makers in options set prices. Both not correct. Banks buy or sell risk and try to make money both sides. Concluding from a wrong assumption that currency markets are not good makes little sense imho. And retail traders hardly ever were impacted by bank fiascos in currency markets. For example libor fixing abuses or currency manipulations around fixings had almost zero bearing on retail traders. Plus your claim that futures markets would somehow be dislocated from such issues also makes no sense. If this were so then there would be plenty arbitrage opportunities between futures and spot.
Are you implying there's no carry trades? There certainly are. They may not be available to forex pikers but the big boys in the banks are running carry trades all the time.
The big boys at banks hardly run any carry trades. Yield hungry investors do. How would banks finance carry trades anyway? Do you know how precious internal funding is? Nobody signs off a strategy that requires a large amount of internal bank funding in exchange for a few percent of carry but large risk of dislocations.
Back to the point, I think currency markets as an expression of macro views is highly misunderstood in retail circles. To everyone his own.
Back to the point, I think currency markets as an expression of macro views is highly misunderstood in retail circles. To everyone his own.
Where on earth did you get that idea ?!?
Feel like some things get mixed up in this thread. Carry trade has NOTHING to do with arbitrage. CIP violations might present arb opportunities. Carry trade is all about UIP. Plus, conspiracy theories don't get you far in trading. FX rates are not set by banks. It is the most liquid market and therefore transactions costs are low. Transparency in OTC might seem low compared to exchange traded instruments, but in reality the market is rather efficient. Probably that's why many people fail to profit from FX in the long run. Really difficult to find discretionary trade ideas based on mispricings b/c there really aren't any that would be large enough and persistent enough to be exploited by retail. Still, there are many strategies that have turned out to be profitable on average in the long run. Certain styles work well in FX as they do in other asset classes. Also exposure to certain risk factors, including carry, can be profitable if the risk is managed well.