Trading FOREX at home and winning big!

[Xela]

Change it?

The regulators' job-description?

That would be welcomed by many, certainly (and even their abolition would be welcomed by a few) ... but that's a societal/political/cultural job, and in a climate in which the overall trend is surely moving in the opposite direction? There's a gradual but inexorable societal progression towards more and more regulators with bigger and bigger teeth, isn't there?

Throughout the world of finance/commerce, it seems to me that industries that persistently refuse to regulate themselves adequately end up with regulation being forced on them which works out worse for them, in the long run.

But arguably there's always a sense in which they have mostly themselves to blame for this outcome. The great irony, in these situations, is that the people most resenting this, and often complaining most loudly about it from their allegedly "libertarian" viewpoints, are typically the very ones whose behaviour has in the first place caused the exact problems to which "heavy-duty regulation" is the increasingly widely-perceived solution. Like it or hate it, it is what it is.

 

[justrading]

Your third paragraph rather encapsulates my thinking, though I don't see it limited to finance/commerce.

Firstly, if we want to talk about regulators, the fact that nobody has gone to jail for 2008 makes a mockery of regulatory bodies in the first place. They didn't stop it and they haven't punished anyone for it. Stuff them. And yes, we seem to be moving further in that ineffectual direction, to stop the dogs barking.

I am actually thinking of the model where regulatory bodies don't just save you from the worst of yourself, they say this is what you have to do, this is what you have to be, before you can do this.

Think drivers licence, pilot, Master Mariner, and so on.

Oh and by the way, the CYA test the brokers impose is so they can say, hand on heart, we did our best to stop that bloody idiot. Somehow, he got past us.

Rather than impose limits that penalise the competent as much they limit the idiots, qualify people to do what they should freely do, if competent.

 

[Mtrader]

This place has gotten really tired. Every thread is the same thing. One guy makes an inquiry and there's a bunch of people who, incidentally on a trading forum, will try to convince you why trading success is next to impossible. This place is utterly useless now except to discourage would-be traders.

I agree but I have a few remarks:

1. BMW335isedan wrote:"Better trade futures instead of Forex. Forex spreads can be easily manipulated because they are not centralized. Futures have very low day trading margin so no need to trade Forex." That is an excellent posting and he is not discouraging. I traded 5 years fulltime Forex in the 90's and shifted then to futures E mini S&P. I can confirm that non currency futures are better than Forex.
2. Very aggressive interventions from national banks like in forex markets are non existing in non currency futures.
   
3. I agree that there are a lot of people (bashers) who immediatelly tell it is impossible. Most of them are losing money while trading and conclude that if they cannot, nobody can. The fact that so many give negative comments confirms that the big majority is losing money. But it is the aim to be in the minority.

 

[justrading]

I agree but I have a few remarks:

1. BMW335isedan wrote:"Better trade futures instead of Forex. Forex spreads can be easily manipulated because they are not centralized. Futures have very low day trading margin so no need to trade Forex." That is an excellent posting and he is not discouraging. I traded 5 years fulltime Forex in the 90's and shifted then to futures E mini S&P. I can confirm that futures are better than Forex.
2. Very aggressive interventions from national banks like in forex markets are non existing in futures.
   
3. I agree that there are a lot of people (bashers) who immediatelly tell it is impossible. Most of them are losing money while trading and conclude that if they cannot, nobody can. The fact that so many give negative comments confirms that the big majority is losing money. But it is the aim to be in the minority.

I mostly agree with you, but for #2. I didn't look, but you are telling me that when the SNB removed the cap, CHF futures didn't move? Seriously?

Don't generalise. The reason why so many had their accounts wiped out is they thought exactly the way you do; it doesn't happen.

Well, it does, it did.

 

[Mtrader]

I mostly agree with you, but for #2. I didn't look, but you are telling me that when the SNB removed the cap, CHF futures didn't move? Seriously?

Don't generalise. The reason why so many had their accounts wiped out is they thought exactly the way you do; it doesn't happen.

Well, it does, it did.

I did not write correct.I meant futures ES (or non currency futures) don't have these aggressive interventions.
It is obvious that futures CHF/$ would move hefty if Forex does.

I don't think: it does not happen.
Wiped out 1 time and learned my lesson. Never had a marging call in the last 15 years.

 

[birzos]

In any environment the success is as strong as the weakest link, so your advantage is that once you take in to account an institutions capital, resource, and technology, and influence, if you are still stronger than their average you have an edge.

What that means in reality is if you are inside the core of the normal distribution (-1 to +1), work hard, don't have too high expectations (2:1), then you can generate profits. Once you move outside of this, which is also where the large profits are (20:1) you have all sorts of problems to solve, hence everyone says it's impossible or doesn't exist. It does exist, but only if you have the experience, technology and management skills to offset the problems thrown at you.

The forex market is effectively unregulated, the brokers are different in their approach but in truth they play with the data to shift the indicators, they drop orders, widen spreads, increase margins, all to make sure you stay inside the core normal distribution. The models are all built on it through the entire chain, mostly indirectly but you occasionally come across those who do it directly.

The forex market is harder than stocks or futures, but has a lower cost of entry to participate. In general it's better to stay with the higher timeframes, this allows time to work for your rather than against you. You can absolutely make profits with forex, but they will make it harder than other instruments, especially if you move outside of the core distribution, which is where everyone wants to be for faster compounding.

 

[Georgii]

At banks, yes, traders get access to order flow information and fundamental research. Only fundamental research is really not of much use unless you're playing long term moves - sentiment is what you play and you don't need a team of analysts for that. Yes, being on the inside loop of Wall Street chatter is a potential edge, but everyone there is out to eat each other's lunch so there's a lot of bluffing that goes on. I talked to a bank trader and he told me that the info you get from chatter is about as reliable as trendlines and support and resistance levels - it can help as often as it can hurt. So you learn to get good at reading it just like you get good at reading a chart.

On the other side you have the quants who have all these super duper complex models, but they're also out to eat each other's lunch. Everyone went to the same schools, knows the same math, and they're playing the same game against each other. They don't look at technical analysis really, they have various sophisticated models that come from heat transfer equations and other such things you'd never have a clue about (unless you had a degree in nuclear physics).

If you're a retail trader you're competing with technical tools that everyone has access to. So that is what you do as a retail trader. Who cares what Goldman or Jane Street are doing, you are simply looking at lines on a price chart and finding some patterns that have an edge. Whatever they do is visible on the chart.

As far as brokers are concerned, they don't sit there and manipulate the data feed to move the line on your 3 minute MACD to trigger your stop orders, lol. Everyone trades different combinations of time frames and indicators. If they were screwing with the data feed on purpose you as a smart trader would see that on the chart and learn to take advantage of that, wouldn't you?

 

[kent]

If you're a retail trader you're competing with technical tools that everyone has access to. So that is what you do as a retail trader. Who cares what Goldman or Jane Street are doing, you are simply looking at lines on a price chart and finding some patterns that have an edge. Whatever they do is visible on the chart.

As far as brokers are concerned, they don't sit there and manipulate the data feed to move the line on your 3 minute MACD to trigger your stop orders, lol. Everyone trades different combinations of time frames and indicators. If they were screwing with the data feed on purpose you as a smart trader would see that on the chart and learn to take advantage of that, wouldn't you?

I agree with this. Broker manipulating price feed or altering indicator is far fetched (though there are/were bad actors which are mostly closed now). I have compared various broker's feeds in key news events and I have not seen much change in the candles even in small timeframes. Irrespective of whether you are a small trader or big hedge fund the candle data or size/OCHL would be the same for most brokers? That is all that matters for anyone who is only trading Technical/chart.

I am yet to understand the logic on not allowing higher leverage to US residents. I feel it is the lobby by non-forex exchanges to curtail forex traders. Who is the government to regulate how fast you blow your account? (j/k ). What regulations has stopped any bank/bankster in getting arrested or lose a banking license? All the crooks got settled the case with SEC/DOJ/Government. If a trader is competent he should be allowed to choose his own leverage. It is like forcing only rich can rent expensive cars. If you have DL and insurance to protect it you should be allowed to rent any car.

 

[Overnight]

...
I am yet to understand the logic on not allowing higher leverage to US residents. I feel it is the lobby by non-forex exchanges to curtail forex traders. Who is the government to regulate how fast you blow your account?...

Keeps those people who use 1,000,000,000:1 leverage on the unregulated account from then going broke and having to go on the dole, which the government would have to pay for. Get it?

 

[kent]

Keeps those people who use 1,000,000,000:1 leverage on the unregulated account from then going broke and having to go on the dole, which the government would have to pay for. Get it?

But it is okay for govt to let people addicted to weed or non-effective gun control? (I know we are going off topic, but just comparing them too). Also what about casinos, high interest pay day loans? Why it is allowed?

http://www.nybooks.com/articles/2014/01/09/financial-crisis-why-no-executive-prosecutions/

This is by a NY Federal Judge.