Most traders should avoid FX, options, futures

The statement that fx is efficient is completely false. However, one should not assume that a revision to the mean exists in forex (there is no such thing as value investing in this market).

But it is true that small caps can be even less efficient.
 
Quote from Dustin:

HA good luck with this argument. I've been stating this on ET for years.

You guys who dream of making it in any other market than stocks, take a good long look at the P&L threads to see who is (and isn't) making money.
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You know I respect your posts on ET. One of the few. I still struggle with futures somewhat, but I do see more than a few making a decent to good living in it to so I stick with it. Stocks confuse me frankly. Multiple routing methods, earnings, news, etc. Seems much more to know. Not to mention no leverage unless you go prop. I do completely agree that they appear to me much less efficient.
 
Quote from detective:

Ranking the various financial instruments for difficulty in forecasting moves and trading the swings, stocks are the easiest, because they are the least efficient. The most efficient and liquid market is the FX market, and IMO, it is the hardest to predict.
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That seems to be a subjective statement.

First it is all about information accessible. If you can get additional (valuable) information you have an edge, not just a probability.

It can be seen that you discovered this principle for yourself because you recommend not to enter blindly but first to look into news etc. Unfortunately you don't seem to have discovered the additional sources of information for FX and futures that make the difference.


Then for FX there is this pattern:
Something principal changes in the global financial structure. That changes the valuation of currencies against each other drastically. Now the big boys begin to steer their super tanker in the new direction. How do they do it? They cannot go there right away because this would mean everybody could jump aboard and make free money. Sudden moves also would lead to unwanted side effects. Therefore they steer into the new direction by making lots of headfakes using everything they can to shake people out of their positions if they are correct and thereby taking the money of smaller participants. And they take time for their task - weeks or months - because they have to rearrange huge amounts of money. That's the reason why it is so hard to predict on a smaller timeframe.
 
Dude, You can trade anything with price.

Currency, Futures, Stocks, Options, Bonds, Commodities, and even Weather.

Just use proper money management.
You don't need to max out on the leverage, use 1% of total trade account on a position.

So if you trade FX, you would trade 1 mini lot per 10k of capital. Or somewhere between 1-5 mini lots.


But yeah, MOST traders SHOULD avoid those high leverage instruments, because the temptation to "Lever Up" can be too much...
 
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