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

  #51 (permalink)
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HoopyTrading View Post
But what is the definition, at the US SBA, of the failure of a business?

I have heard that statistic thrown around as well... (90% of small businesses fail within the first couple of years of operation, yada yada. Sounds like trading, yeah?) But what constitutes a failure of a business? Is it their failure in the third year to file taxes? Is it the actual owners filing an official form to the SBA that says they are closing their business?

And what if that business in their 3rd year of losses, then posts a profit in the 4th year? Does the SBA take that into account, or are they only looking at their own return rate on the small-business loans they dole out and receive interest income on? How is the SBA calculating the difference between a failed business venture and a successful one?

The SBA gives out loans. That was their original charter (mostly), when the US Congress created the thing in 1953, after the fallout of some other organization formed by Herb Hoover during the Great Depression of the 1930s, which became something else, which became the SBA, etc. But like any other US governmental reporting agency, you need to take their reports with a grain of salt.

The USG just ain't that good on their own data, man. They know not what they got, lol!

Back to the point... with this small-business failure rate in context, what constitutes a failed trader? Is it someone who blows up a 10K account once? Twice? On the third try he/she succeeds and makes millions. Does he/she now count as a success? Or are they still counted as one of the 95% that failed? What is the context of that failure rate?

*sighs*

Having mentored many Forex (& a few futures) traders, the one stand-out is those who blame the system when in fact they are their own worst enemy.

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  #52 (permalink)
ribs
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A lot of people in the UK seem to trade forex pretty well. I've seen a few documentaries of traders who do surprisingly well despite the stereotype. The key here is that they also seem to be consistent.

https://www.youtube.com/watch?v=TkiQeAOcJQw&feature=youtu.be&t=30m24s

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  #53 (permalink)
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Inside Forex


I think a lot of the reputation came from the 'old days' when you could lever up 400:1 with relatively little money. The industry has gone through several rounds of regulation which has slowed that down a bit. I used to work at one of the largest forex brokers out there and will admit that for a long time there were some bad characters in the business. There were brokers actively offsetting trades (probably still) and others that had questionable liquidity at times, but much of that has changed for the better. Regulation has prevented US brokers from offering high leverage, and the massive loss posted by FXCM during the Swiss franc de-pegging led to much higher margin requirements.

In my experience I've received fair quotes from FX Brokers and actually found it easier getting the fills at the prices I was going for than vs the exchange. As others have mentioned, spot FX allows you to trade a multitude of lot sizes which is great for managing risk if you know how to adequately do that. The lot sizes on the exchange are big for a small trader and the mini-fx exchange traded contracts have less liquidity in my experience. For any new trader I usually recommend a small fx account over futures because you can learn quite a bit with a small amount of money - money which you will lose in your first few tries at trading.

With regards to information disadvantage: yes sometimes the prices on the spot were laughably different from what was trading on the exchange, but usually only in times of extreme volatility. I found these to be opportunities in the rare instances I saw a big divergence.

Hope this helps

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  #54 (permalink)
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I see no reason to distrust forex. I've been trading the spot market with Oanda for the last year, their spread (at least on EUR/USD and USD/JPY) almost always stays pretty tight. I've had almost no issues, and being that you get to trade whatever size you want instead of fixed contracts has made much better at maximizing a small account. ~50% return in a year and no one has cheated me out of getting to my profits as I see fit.

There are crappy brokers in every market. Avoid them no matter what you trade.

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  #55 (permalink)
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Futures Edge on FIO

Which products do you trade?

 
Those who seek to gamble can do so in stocks, bonds, futures, options, forex and what not.

Important thing to understand about gamblers though, is that thrill and excitement are the crucial factors for them. Steady and consistent returns that will make any rational trader happy are boring for gamblers. No fun in that. Those extreme emotions are more easily generated with high-leveraged products that offer the possibility of multiplying gambler's capital as quickly as possible. The associated risks are usually ignored and discarded.

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  #56 (permalink)
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TraderWalrus View Post
Those who seek to gamble can do so in stocks, bonds, futures, options, forex and what not.

Important thing to understand about gamblers though, is that thrill and excitement are the crucial factors for them. Steady and consistent returns that will make any rational trader happy are boring for gamblers. No fun in that. Those extreme emotions are more easily generated with high-leveraged products that offer the possibility of multiplying gambler's capital as quickly as possible. The associated risks are usually ignored and discarded.

Gambling is a very complex state of psychology, and excitement and thrill are just a few of the symptoms.
However, in trading the gambling part manifests itself, in my personal opinion, in the need to see spontaneous results.
You would see many traders that say they are trigger happy, yet would not step a foot in a casino.
This stands to show that excitement and thrill is not what motivates them.

I do agree that leveraged products do intensify certain feelings.

Overall I like your points because if traders are conscious of pitfalls they may start being more observant of their behavior and hopefully improve upon them.

Matt Z
Optimus Futures

Thee is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.

Last edited by mattz; September 1st, 2016 at 09:10 AM.
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  #57 (permalink)
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TraderWalrus View Post
Those who seek to gamble can do so in stocks, bonds, futures, options, forex and what not.

Important thing to understand about gamblers though, is that thrill and excitement are the crucial factors for them. Steady and consistent returns that will make any rational trader happy are boring for gamblers. No fun in that. Those extreme emotions are more easily generated with high-leveraged products that offer the possibility of multiplying gambler's capital as quickly as possible. The associated risks are usually ignored and discarded.

Well said.....

Ron

We must be like the fountain or spring that is continually emptying itself of all that it has and is continually being refilled from an invisible source

Quoting 
The steed of this Valley is patience; without patience the wayfarer on this journey will reach nowhere and attain no goal.

Buy Low And Sell High (read left to right or right to left....lol)
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