Is Forex a Scam?
This is a difficult question. One that has obviously plagued a lot of good intentioned people for a very long time. I will try to answer it as an industry question.
Is Forex in general a scam?
Yes it is to the guy looking for an online business to get into.
The reason is simple. Most of what non professionals trade is market noise. Market noise is simply the back and forth movement of stop hunting day in and day out. It happens in almost all markets.
Are you a target.
Absolutely. Any time you walk into the shark den you are on the menu.
Yes I know you have heard that its the trillion dollar market where billions are transacted every few minutes.
While this is true most of the transactions are done by multi national corporations who gladly pay the spread to the banks who do the transactions for them. Like say a Walmart that has stores in every country and exchanges its currency all the time. Don't forget these multi nationals take positions on the open market to hedge their exposure to currency devaluation in certain countries. So they hold their positions a LONG time. Measured in months to years.
These guys comprise about 75% of the market. The other 25% is speculative in which about 1.2 trillion trades hands daily. Of the 25% speculative almost 83% of it is institutional or funds. Only about 10-13% is the retail fellow and he is on the menu. I think the thought is you are so small that no one will care. However this is the wrong attitude. Everyone is in the market to make money who is a speculator right. So why would they not care.
Longer term investors (who are different from speculators) like say George Soros that you hear so much about take positions for weeks and months at a time. Except here is the thing. They don't always win. The commercial traders or liquidity providers for these guys are the ones letting them into the markets. That is the big banks and corporations. These are the guys that are almost always right over time. Time is the key word. They hedge and hold their positions forever.
Are they on both sides of the market?
Yes they are.
What that means is they can ramp the markets very quickly one way or another by adding more shorts or longs. It is that simple folks. Yes the market will always return to its trend but it can stay irrational a long time. Long after your account is gone.
Very few systems survive the test of time in this market. Almost all of them fail or have mean reversion where large periods of losing take place.
Do they move the market against you?
Yes they do. Almost always when you are taking a large position especially.
Hedging is your only safe bet.
To do this you need to know what instruments to hedge in and when to take your profits. Not easy.
So don't believe all the hype you hear about the great market with trillions. There is a lot of marketers out there. If you fail to treat this like a business and prepare yourself for extreme competition then you will likely fail. You are taught that all you need is a lap top. An internet connection and a few other things and you are set.
Ha, well good luck with that taking on the pros.
There is nothing in it for me to tell you this. I have been trading a long time and it is a very difficult business. Billions have been lost to brokers and to shysters that simply take your money. So remember this and prepare to learn like you have never learned before if you want to be successful. I hope to see you on the winning side. If you do what I do here, then you may have a chance. So stay tuned and I will give you my best effort. For free.
Is Forex in general a scam?
Yes it is to the guy looking for an online business to get into.
The reason is simple. Most of what non professionals trade is market noise. Market noise is simply the back and forth movement of stop hunting day in and day out. It happens in almost all markets.
Are you a target.
Absolutely. Any time you walk into the shark den you are on the menu.
Yes I know you have heard that its the trillion dollar market where billions are transacted every few minutes.
While this is true most of the transactions are done by multi national corporations who gladly pay the spread to the banks who do the transactions for them. Like say a Walmart that has stores in every country and exchanges its currency all the time. Don't forget these multi nationals take positions on the open market to hedge their exposure to currency devaluation in certain countries. So they hold their positions a LONG time. Measured in months to years.
These guys comprise about 75% of the market. The other 25% is speculative in which about 1.2 trillion trades hands daily. Of the 25% speculative almost 83% of it is institutional or funds. Only about 10-13% is the retail fellow and he is on the menu. I think the thought is you are so small that no one will care. However this is the wrong attitude. Everyone is in the market to make money who is a speculator right. So why would they not care.
Longer term investors (who are different from speculators) like say George Soros that you hear so much about take positions for weeks and months at a time. Except here is the thing. They don't always win. The commercial traders or liquidity providers for these guys are the ones letting them into the markets. That is the big banks and corporations. These are the guys that are almost always right over time. Time is the key word. They hedge and hold their positions forever.
Are they on both sides of the market?
Yes they are.
What that means is they can ramp the markets very quickly one way or another by adding more shorts or longs. It is that simple folks. Yes the market will always return to its trend but it can stay irrational a long time. Long after your account is gone.
Very few systems survive the test of time in this market. Almost all of them fail or have mean reversion where large periods of losing take place.
Do they move the market against you?
Yes they do. Almost always when you are taking a large position especially.
Hedging is your only safe bet.
To do this you need to know what instruments to hedge in and when to take your profits. Not easy.
So don't believe all the hype you hear about the great market with trillions. There is a lot of marketers out there. If you fail to treat this like a business and prepare yourself for extreme competition then you will likely fail. You are taught that all you need is a lap top. An internet connection and a few other things and you are set.
Ha, well good luck with that taking on the pros.
There is nothing in it for me to tell you this. I have been trading a long time and it is a very difficult business. Billions have been lost to brokers and to shysters that simply take your money. So remember this and prepare to learn like you have never learned before if you want to be successful. I hope to see you on the winning side. If you do what I do here, then you may have a chance. So stay tuned and I will give you my best effort. For free.
No comments:
Post a Comment