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Do full-time forex traders exist or is it just make believe?
- Thread starter zbojnik
- Start date
Quote from Ol' Yella:
Lots of full-time at-home traders exist-- but how many of them are making consistent money year after year? How long do they stay a full-time trader before being forced to go back to working a job?
I would guess the few who do manage consistency are well capitalized and turning out modest % gains each year.
There is another site I visit that is geared toward careers, entepreneurship, online biz ideas, etc. Some good stuff and advice in there. I saw no talk of trading so did a search for it and found a handful of older threads. I was a little surprised (or maybe I shouldnt be) that online trading had absolutely zero credibility on this site. Even playing online poker was viewed as a better option, seriously!
Good points.
I would venture to "guess" that only 15% of at home traders are sufficiently profitable - in the sense that it allows them to pay their bills etc. And most of the unprofitable ones sooner or later are forced to go get a job.
There are a handful who are consistent - and here I differ from you a bit. Some of them hit huge percentage returns - like >100-200% per year on small capital base (talking 50k range here). These guys do exist but are very rare.
Can you please post the link of the other forum on entrepreneurship career etc.? I would like to take a look.
Quote from Ol' Yella:
Guys in the financial industry told everyone to stay the hell away from trading. The advice on markets was to build a career or a business and then put some of the money you make from that into longer term position trades in solid dividend payers, or buy index funds in bear markets. and stay away from leverage and margin. Said the only people they heard of making a living off investments and trades were people who were already rich.
This is conventional wisdom among financial industry folks.
Quote from RedTankEra:
You really are something.
Let me be more specific-- I don't believe there are any full time, at home, retail FX traders making a decent, consistent living from trading FX. If there are any full time retail FX traders they have other incomes, wealth or family money that allow for the hobby. I don't think anyone, who didn't come from or has wealth or other income, can make a decent living tradign retail at home FX.
While there may be some characters who make a subsistence type scratch eeking out a living in retail at home FX they are exceedingly rare.
I'll be happy to recant if you can produce any evidence to the contrary.
regards, surf
Quote from RedTankEra:
To suck at trading is one thing, that's typical, to claim no retail can be successful at it using TA, that's just pure idiocy.
Define succesful as making a decent living with ONLY the income earned from at home, retail FX trading. And I am not talking about some guy living in a trailer down at the swamp who can live on $800 per month. surf
Quote from marketsurfer:
Define succesful as making a decent living with ONLY the income earned from at home, retail FX trading. And I am not talking about some guy living in a trailer down at the swamp who can live on $800 per month. surf
Supporting a family, kids, private schools, good medical, decent lifestyle, no debt, savings, solely from trading.
That's my definition.
Quote from RedTankEra:
Supporting a family, kids, private schools, good medical, decent lifestyle, no debt, savings, solely from trading.
That's my definition.
Agree, mine also. However, I would add with ZERO other income from any source. Does it exist in retail Forex? I highly doubt it. surf
Quote from marketsurfer:
Agree, mine also. However, I would add with ZERO other income from any source. Does it exist in retail Forex? I highly doubt it. surf
It is becoming an academic question with this qualifier of ZERO other income.
Lets make it real here. If we remove this qualifier, then a better question to ask would be - do at home FX traders exist and in what kind of numbers who make at least 70% of their income from FX trading. Or maybe ask this - do at home FX traders exist who make at least 100k from FX.
I think it is a good strategy for an at home independent trader to look to diversify his income sources. An independent trader already takes a huge career risk. It makes sense for him to mitigate that risk to some extent by having diversified earning sources.
I can maybe except that Forex is a different game if I was to accept that stocks are more controlled.
Maybe the prints or level 2 in stocks can be used to get an edge, also you can get ECN rebates. These reason I am open to.
But to site leverage as the issue is not fare. To say that more retraces is a bad thing is just plain wrong. You can range trade.
I use a forex account, I was focused on gold but started using currency as a means to hedge. Now I find I am more and more in to the currency's.
The issue with leverage and the idea of forex traders adding to their account may be not seen correctly. When you trade stocks you start with funds in the account and watch it dwindle. Each trade has a stop loss.
With forex you do not need to dump in 10,000 you can just dump in 100. wait till you loose it all and then add money in and start over. in this case your stop is going bust. But going bust is no big deal as you only put in 100$
It is actually the same thing in that respect. at least the Forex trader has built in stop loss and instead of messing with it he tries to keep his trading in a certain range and control it.
If you guys are looking down on forex traders cause they keep loosing and adding money in it is not right. The non leveraged player does the same. It does not seem so as the non leveraged trader starts with all of his funds in the account so the need to reload is not as often.
Unless you are referring to the market actually being different (level 2+, time and sales, market maker tracking, people participating for the sole purpose to gain profit (forex has built in trades from business and travelers that convert with out even thinking of timing), then you may have a point.
But if you say forex traders are bad cause they seem to keep adding and blowing accounts then you are not fare. Where you have a 100$ stop loss, the Forex trader has 100$ balance in his account. Your trade goes the wrong way you loose 100$ and have to revert to your balance which you keep with the broker. Its the same thing. Atleast the forex guy has his trading money in one place and his trading balance in another place.x
If your broker goes bust you loose your trades, your stop loss and your balance. For the leveraged trader it is just a bad trade.
Please explain where the disadvantage is if any, and if the impression is based on stories (which are incorrectly valued) or if it is more about the actual dynamics of the market.
Maybe the prints or level 2 in stocks can be used to get an edge, also you can get ECN rebates. These reason I am open to.
But to site leverage as the issue is not fare. To say that more retraces is a bad thing is just plain wrong. You can range trade.
I use a forex account, I was focused on gold but started using currency as a means to hedge. Now I find I am more and more in to the currency's.
The issue with leverage and the idea of forex traders adding to their account may be not seen correctly. When you trade stocks you start with funds in the account and watch it dwindle. Each trade has a stop loss.
With forex you do not need to dump in 10,000 you can just dump in 100. wait till you loose it all and then add money in and start over. in this case your stop is going bust. But going bust is no big deal as you only put in 100$
It is actually the same thing in that respect. at least the Forex trader has built in stop loss and instead of messing with it he tries to keep his trading in a certain range and control it.
If you guys are looking down on forex traders cause they keep loosing and adding money in it is not right. The non leveraged player does the same. It does not seem so as the non leveraged trader starts with all of his funds in the account so the need to reload is not as often.
Unless you are referring to the market actually being different (level 2+, time and sales, market maker tracking, people participating for the sole purpose to gain profit (forex has built in trades from business and travelers that convert with out even thinking of timing), then you may have a point.
But if you say forex traders are bad cause they seem to keep adding and blowing accounts then you are not fare. Where you have a 100$ stop loss, the Forex trader has 100$ balance in his account. Your trade goes the wrong way you loose 100$ and have to revert to your balance which you keep with the broker. Its the same thing. Atleast the forex guy has his trading money in one place and his trading balance in another place.x
If your broker goes bust you loose your trades, your stop loss and your balance. For the leveraged trader it is just a bad trade.
Please explain where the disadvantage is if any, and if the impression is based on stories (which are incorrectly valued) or if it is more about the actual dynamics of the market.
Quote from short&naked:
Some do exist, but there are indeed fewer 'success' stories in forex than commodities or equities. Take ET for example. There are several traders who have made it in equities for years (lescor for example) but none in forex/Sp500.
I believe that the elephant in the trading rooms (forums) is that most are not profitable in fx but nobody dare say it. You can almost feel it, when you read the posts, etc.
The reasons could be the following:
1) Forex offers 1:50 leverage, so even traders with technical ability who are undisciplined, wash out early. In equities, leverage is built into the issue, so you get volatility without owing anything to your broker.
2) Forex has no direction or bias, so determining price direction is hard.
In equities, it's hard to be wrong going long during a bull run. Of course, whether a trader survives the next business cycle is questionable, but at least he/her weaknesses aren't revealed for many years making it seem like they have a lasting edge.
3) More retraces in forex than equities. Price can take off in equities and never come back
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Look at the Barclay Hedge Fund indices: http://www.barclayhedge.com/research/indices/cta/sub/curr.html
Currency funds return an average of 7%. That should tell you something.
Here is an fx fund with 100 AUM that is doing well with a max DD of 4%: http://www.managedfutures.com/program_performance.aspx?fundtype=&productId=80188
Will they continue to do well in a low volatility environment? Who knows.