It is definitely NOT retail vs institutions. The institutions cant be bothered to hunt retail traders money!
If anything a more appropriate description would be retail self destruct
Most forex retail traders lose money. Why is forex so difficult?
- Thread starter helpme_please
- Start date
It is definitely NOT retail vs institutions. The institutions cant be bothered to hunt retail traders money!
If anything a more appropriate description would be retail self destruct
Actually forex is an interesting asset class if you have the ability to step away from being a punter. There are far fewer prop traders/hedge fund types in forex than in almost any other asset class. There are large players or groups of players who are "professionals" who participate with goals other than simply making a profit from markets. Lot's of companies with international business have inputs in one currency and profits in another and want to hedge the currency risk out regardless of what the market is doing or will do. If you're traveling to Europe, you're going to pull Euros out of the ATM no matter what the rate is now or 10 minutes from now. If you're a central bank, you may be happy to lose money to prop up a currency peg. Most of these "professionals" are represented by investment banks, in fact after the Volker Rule this is really the only type of trading investment bank "traders" are doing. While they are out to get the best price for their client (hopefully!) in a given transaction, the "professionals" you speak of certainly aren't locked into some battle with retail forex traders, in fact they could give two shits about you if they even think about you at all!
I did not specifically say institutions are out to hunt retail traders money.
My point was, retail traders are definitely not on the same side as institutions due to retail trader tools, information, or lack thereof. Put it like this, that already puts them at a disadvantage.
But yes, apparently 90% do self destruct over the longer term.
i never said retail traders are smarter, i said institutional traders are not smarter than retail traders... both of them in terms of trading are on the same level - know nothing
retail guys who striving to trade for living, not just as a hobby, to me are akin people who on small boats trying solo to circumnavigate the globe,
while institutional guys sit their ass on the huge ship (that stays in the port), as part of the huge team, responsible for certain duties, getting salaries and going home in the evening and they think they know trading...
now consider the difference
overwhelming majority of the retail guys never come back alive, but if you put institutional guys in the same dingy and let them go in the ocean, they will not have better outcome... they do not know a clue how to trade
but if you put retail guys in the same fucking institutions where institutional guys sit most retail guys will make it nicely ...
so its the same average bozos, some are crazier than others, but the normal ones are not smarter..... they just playing by the rules of the society...
to each its own
and the game is not rigged and its not retail vs institution either
Last edited:
as for the craziness or sado-mazo tendencies of the retail guys
to me its the same tendencies that Jonathan Livingston Seagull had
i like those tendencies - those are the tendencies of the archives
and though most of them will archive nothing i respect them for trying and prefer those ones to suckers who play by the rules and sit on their ass all their wasted miserable lifes
to me its the same tendencies that Jonathan Livingston Seagull had
i like those tendencies - those are the tendencies of the archives
and though most of them will archive nothing i respect them for trying and prefer those ones to suckers who play by the rules and sit on their ass all their wasted miserable lifes
L
lovethetrade
IMO, there's no point distinguishing between institutional and retail money when it comes to forex. All you need to care about is price, unless of course if you're trading longer term then fundamentals come into the equation.
I kindly disagree with you on the abovementioned topic.
Institutional traders on average are more knowledgable than retail traders. Firstly, they have studied and are generally rather well versed with the drivers of a certain asset class, either in theory, through experience, or both. Secondly, they are on average much better at managing risks compared to the typical retailer, as their jobs are dependent on it.
You'd think that just because they are managing other people's money and get paid fat fees, mean that they do not have to perform? I'd tell you to try convincing an investor to stick with you after you lose half of their money! Performance talks. A fund that survives off churning investors wont last long in the industry.
Thirdly, you'd think moving the markets with your orders is an advantage? It is not. You have no idea how much these institutions have to take liquidity into consideration when planning a round trade. Liquidity is not a problem for the usual retailer.
I would also argue that if you put an institutional trader in a retail setting. They would still perform. Probably not as well as they could have but definitely not self destruct like most retail traders. This is because risk management.
I would also argue that a retail trader equipped with the best platform, information etc. Might not perform or survive. Given by the assumption that the typical retail trader has poor understanding of market drivers, coupled with poor risk management.
IB Retail Forex metrics of % profitable accounts. Wonder what futures or options accounts would look like?
https://interactivebrokers.com/en/index.php?f=3731
https://interactivebrokers.com/en/index.php?f=3731
This is a really good comment