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Why does forex have a bad rep?
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Why does forex have a bad rep?

  #21 (permalink)
Trading for Fun
south west UK
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PeakGrowth View Post
Most of the gambling commentary comes from the fact that you can get an insane amount of leverage plus a lot of the retail brokers are bucket shops offering "nil" brokerage who take the other side. The low perceived cost of trading plus the excitement of the markets attract gamblers hence the perception.

Having said that, ECN is good but the real issue is if you trade short term you have absolute zero idea of order flow (which is level 2) so you are at an extreme information disadvantage. FX is not just used for speculation, a lot of the flow is from actual business related transactions. For example, if Big Company Co. wants to exchange 1b USD to EUR, they can do it at any time and at whatever price they want to and you would have no idea when/where/why.

Considering you can get a more complete set of information trading futures such as the e-mini's, I see no reason to trade spot. If the reason you trade spot is because you only have $500, then you shouldn't trade at all until you add more zeros to that number.

Not sure about spot FX and FX Futures, I think there was a thread here talking about which one leads which but there is still an information disconnect I think as it is still two separate "markets" which will influence each other.

interestingly,recently i had lunch with a guy that used to be FD of a Swedish car manufacturer many years ago. In conversation he mentioned that he did his currency changes same day, same time each week! wish i had been trading then!

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  #22 (permalink)
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missionatsea's Avatar
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For anyone who denies market positions are not a gambling proposition: without risk, no reward.

Have only been practicing on account since March, but from what I have witnessed, Forex allows institutional money to spike price on news, hundreds of pips in both directions, taking out your stop loss, only to come back to the center of gravity.
I have been experimenting positions without a stop loss and results have improved. Even with a 200 catastrophic stop loss in place, they have taken me out only to return to where they were trading prior to news release. Unregulated market=risk=gambling!
With any market or instrument, get to know it before you trade it. Each has it's own personality and if you are not 50/50 on your predictions, continue practice. Then it's time to cut your losses short and let your winners run...where I am working hard disciplining myself...UUUGGGHHH. So easy to preach...many times over hard to do.
The more I study this game, the more I am intrigued.

Best of outcomes,

Supply & Demand ... Core Strategy Plan.
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  #23 (permalink)
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Itchymoku View Post
So you let your broker pretty much trade your money ( you take his tips on which currency pairs to trade )????????

Well I rely on him 100% as he have never let me down, but my favorite pair is EUR/USD I do trade it a lot.

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  #24 (permalink)
Elite Member
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In my opinion, forex isn't in itself any more gambling-related than any other kind of trading.

There are "traders" who will treat anything as "gambling".

Forex just attracts more than its share of them because of the market opening hours, ready availability of huge leverage, and the promotional activities of so-called "brokers" who are actually market-makers trading against their own clients. It isn't intrinsically the fact that it's the forex market that makes it gambling: it's more the customers it happens for various reasons to attract.

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  #25 (permalink)
Trading Apprentice
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That's true about everything

Big Mike View Post
You have to ask yourself what your goal is.

If you are like most retail forex traders, they are oblivious to the facts, are searching non-stop for EA's and signals/systems, and want the most leverage, want to make deposits by credit card, etc. These people are the ones that all those fraudster brokers are going after, and they get them.

Now, if you are a professional, then you know better than mess with any of the above. You can use Interactive Brokers for example, as a reputable FX broker, and have the advantage of more granular sizing of your positions if trading 1 lot on futures is too much leverage or size (and for many people, it is).


In everything you do you have to know best practices and work with the best. True in the fx trading business it's a little hard to know at first who is a pro and who would just lead you to loses and dead ends but if you're patient and won't rush into things then you'll get yours. I'm just starting with fx trading myself and it is very confusing but i'm sure with the help of forums and blogs like this i'll get to the good people.

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  #26 (permalink)
Market Wizard
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How many ForEx brokers do not take the other side of your trades?

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  #27 (permalink)
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xplorer View Post
How many ForEx brokers do not take the other side of your trades?

Brokers (particularly of the counterparty market-maker type) come and go all the time. I don't know "how many" there are. I doubt whether this information is even definitively collated anywhere.

Here's the point, though: there are genuine brokers (who execute trades in the interbank market on behalf of customers who can't themselves deal there, just like stockbrokers buy shares for their clients) and they have no incentive for their clients to lose, because they're not involved in the transaction other than carrying it out in exchange for a fee.

On the contrary, if anything, they prefer their clients to win, because that way they remain clients and generate future commission income for the broker.

Interactive Brokers ("I.B.") is an example of a genuine broker, of this kind.

And then there are the majority of firms advertising themselves online as "forex brokers" who are actually counterparty market-makers, hold the other sides of their own clients' positions and are effectively trading against them - while holding their funds, and to a large degree also making up both the rules and the prices.

We all decide for ourselves which type of broker to use.

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  #28 (permalink)
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Personally, I stick with the majors only, and trade them through the futures markets. No worries there.

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  #29 (permalink)
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TracyRichards and SamuelClark, most forums will take you in circles in other words they are not really run or followed by pros, any one serious with forex should begin with babypips for introduction and then fxstreet which is a collection of forex pros. All are unique in their own right, just find one that appeals to you.

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  #30 (permalink)
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What I would like to know is why currencies on spot and futures are so highly correlated when the players are so different in each market??

From a traders' perspective, would you say currency futures are more reliable for the various reasons mentioned here and overall the preferred way to trade currencies?

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