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Why 90% of retail traders fail...

felotus
Nov 20 2013 at 16:09
53 ieraksti
Rubn posted:
Nice article, do you think the per cent of losers is less in other markets rather than forex?

Yes.
There is not a single hedge fund that has been able to consistently make money in the FX market.
Whereas there are a few of funds working on futures, convertibles, volatility etc. that have been able to make sustainable performance for the past 30 years.

The truth is, you are not supposed to make money on the FX market. You're supposed to buy dollars because you want to speculate on the S&P 500 as an european and as such, don't care much whether you buy your dollars at 1.3030 or 1.3050 because you're speculating on other US based assets.
I work in a hedge fund.
FX-Parity
Nov 20 2013 at 16:39
28 ieraksti
That couldn't be further from the truth. There are 100's of active fx funds on Deutsche Bank Select program. Many of which have been around for 15-20 years... That's just one program too.

The information on these funds are not always made public, but are for the use of capital allocators.

I have previously worked for a hedge fund (fund of funds). It was paramount that we allocated to fx managers to diversify our structured products.

Not to get into a debate about it. None the less, you will believe what you like :)

Thanks for your post :)
Ruben Bernat (Rubn)
Nov 20 2013 at 16:43
85 ieraksti
felotus posted:
Rubn posted:
Nice article, do you think the per cent of losers is less in other markets rather than forex?

Yes.
There is not a single hedge fund that has been able to consistently make money in the FX market.
Whereas there are a few of funds working on futures, convertibles, volatility etc. that have been able to make sustainable performance for the past 30 years.

The truth is, you are not supposed to make money on the FX market. You're supposed to buy dollars because you want to speculate on the S&P 500 as an european and as such, don't care much whether you buy your dollars at 1.3030 or 1.3050 because you're speculating on other US based assets.

Hmmm interesting conversation, I think that although the fx markets are a little more complicated there are hedge funds making money in it, a major example would be the Quantum fund and the story about George Soros 'breaking' the Bank of England.

In my humble opinion, if speculation in currency markets were 'bad business' there would not be so many hedge funds that invest in this markets. What do you think?
Preservation of capital and home runs.
Ruben Bernat (Rubn)
Nov 20 2013 at 16:50
85 ieraksti
Thinking more in deep about all this, I belive the 'losers rate' is too high because of all the misinformation, bad broker's data feed and all of their maneuvers like stop hunting, trading against you, fading the price, etc.

I also belive that nowadays its so easy for anyone who knows nothing about speculation to open a tiny account with one of those brokers (more like bucket shopes to me) and start trading on whatever they like.

Just my opinion of course.
Preservation of capital and home runs.
FX-Parity
Nov 20 2013 at 17:17
28 ieraksti
Hey Ruben :)

You've hit some interesting topics with regards to the ethics of fx brokers.

I intend on writing a blog about the misconceptions of 'stop hunting', slippage and 'trading against you' etc.

FX is as lucrative as any free market. Retail traders believe what they want to believe though.
Ruben Bernat (Rubn)
Nov 20 2013 at 17:27
85 ieraksti
Thanks Gilberto!

I'm looking forward for your blog, please post it here when you finish it, I think its a very important topic.

Regards :)
Preservation of capital and home runs.
felotus
Nov 20 2013 at 19:54
53 ieraksti
Rubn posted:
felotus posted:
Rubn posted:
Nice article, do you think the per cent of losers is less in other markets rather than forex?

Yes.
There is not a single hedge fund that has been able to consistently make money in the FX market.
Whereas there are a few of funds working on futures, convertibles, volatility etc. that have been able to make sustainable performance for the past 30 years.

The truth is, you are not supposed to make money on the FX market. You're supposed to buy dollars because you want to speculate on the S&P 500 as an european and as such, don't care much whether you buy your dollars at 1.3030 or 1.3050 because you're speculating on other US based assets.

Hmmm interesting conversation, I think that although the fx markets are a little more complicated there are hedge funds making money in it, a major example would be the Quantum fund and the story about George Soros 'breaking' the Bank of England.

In my humble opinion, if speculation in currency markets were 'bad business' there would not be so many hedge funds that invest in this markets. What do you think?

That was quite a long time ago and Soros lost 800M$ two times within 6 months afterward.


DGilberto posted:
That couldn't be further from the truth. There are 100's of active fx funds on Deutsche Bank Select program. Many of which have been around for 15-20 years... That's just one program too.

The information on these funds are not always made public, but are for the use of capital allocators.

I have previously worked for a hedge fund (fund of funds). It was paramount that we allocated to fx managers to diversify our structured products.

Not to get into a debate about it. None the less, you will believe what you like :)

Thanks for your post :)

Any ISIN ? Fund name? we've been going through thousands of funds and beside a very few ones, they're all worst than buy-and-hold S&P even if you start in 2000 and just go through the crisis. I stopped counting how many phone calls I received, asking about good fx funds.
I work in a hedge fund.
Ruben Bernat (Rubn)
Nov 20 2013 at 23:56
85 ieraksti
felotus posted:

Soros lost 800M$ two times within 6 months afterward.



Lost 800M$ twice? trading what? I have not heard of that, can you please give me a link to read that story? Look, even if that was true, He and Stanley Druckenmiller are great traders, and I think their money speaks for itself.


 
felotus posted:


That was quite a long time ago




So in your point of view, the past success does not mean anything? I don't agree with you, Jesse Livermore was one of the greatest traders of all times, making and LOSING millions (in today's money that would be BILLIONS) and all that trading his own money. And Livermore is just an example, there are tons of traders from the 'old times' who were really succesfull, I don't see the point in making an statement like 'That was quite a long time ago', well, yes, it was long time ago, does that mean that doesn't count? hmm..


But going even deeper in the subject, forget about Soros and all the great traders, can you please tell me, WHY do you feel the fx market is harder? Also, what do you trade? and what is your style? I'd like to know more in deep about your thoughts.


Regards.
Preservation of capital and home runs.
yuvraj
Nov 21 2013 at 14:35
4 ieraksti
well some do succeed
its all a mater of aiding with the correct systems and signals
today there is so much data so its the only way to go
i have tried a number of auto-trading and signaling solution
with the correct use if these solutions one can protect his funds win and most especially not loose !!!
if your not too greedy with the ratios you choose you will do some nice gain

good luck to all - let the bulls !

go fed go
 

volatility is the traders best and worse nightmare
felotus
Nov 21 2013 at 22:20
53 ieraksti
Rubn posted:
felotus posted:

Soros lost 800M$ two times within 6 months afterward.



Lost 800M$ twice? trading what? I have not heard of that, can you please give me a link to read that story? Look, even if that was true, He and Stanley Druckenmiller are great traders, and I think their money speaks for itself.


 
felotus posted:


That was quite a long time ago




So in your point of view, the past success does not mean anything? I don't agree with you, Jesse Livermore was one of the greatest traders of all times, making and LOSING millions (in today's money that would be BILLIONS) and all that trading his own money. And Livermore is just an example, there are tons of traders from the 'old times' who were really succesfull, I don't see the point in making an statement like 'That was quite a long time ago', well, yes, it was long time ago, does that mean that doesn't count? hmm..


But going even deeper in the subject, forget about Soros and all the great traders, can you please tell me, WHY do you feel the fx market is harder? Also, what do you trade? and what is your style? I'd like to know more in deep about your thoughts.


Regards.

Years ago the game was much different, the market was much thinner and it was much easier to manipulate.

We have a team of 15 engineers, most of them used to work in some of the largest investment banks and brokerage firms. We trade the FX market with a technology that's the result of 20 years of development.
As we sell our fund to various kind of investors, we know our competitors very well. I can tell you, a good FX fund that achieves between 10% and 20% on a consistent, yearly basis is considered as one of the best FX fund, and there's only 3 that I know, beside us.

look at futures fund, look at equity funds, there are dozens, if not hundreds of those funds that have been able to generate steady returns for over 30 years, with extremely wealth managers. Look at FX Concepts, the largest FX Fund in the world, just look at their past performances. And we're talking real money here, any fund that manages 100m+ has almost unlimited budget to hire some of the greatest guys on earth.
I work in a hedge fund.
Ruben Bernat (Rubn)
Nov 22 2013 at 00:15
85 ieraksti
@felotus

Its been a nice pair of conversations, really appreciate your thoughts.

Yes the game has evolved into a much more complex thing. High frequency trading has taken over the markets. But I do belive manipulation is still going on, and always will be. Its not something new, its been the business of many men over more than 100 years.

Why do you think it is harder for a hedge fund to be profitable over the long run in spot currency markets?

Regards.
Preservation of capital and home runs.
felotus
Nov 22 2013 at 06:35
53 ieraksti
The behaviour of the market is different, especially lately.

Try to google and find a fund that has been able to consistently do returns in the fx market and tell me what you find :p
I work in a hedge fund.
Dennis O. (dgaf)
Nov 22 2013 at 09:49
57 ieraksti
'The Bigger The Lie, The More People Will Believe It' - Joseph Goebbels
Sleep is for the weak
TranceMp3
Nov 22 2013 at 09:49
2 ieraksti
Just learn to Ride the Market and you will have success!!
Light Peak Capital
LightPeakCapital
Nov 22 2013 at 18:46
1 ieraksti


Off course!
Retail traders (most of) do not have access to level 2 data. Meaning not only do you have to teach yourself TA and those of you who don't have deep pockets or are over leveraging so also learning fundamental analysis. Still makes no a great deal of sense. As Microsoft for example have a trading floor bigger than most Tier 2 banks! Now banks and large cooperates can move the market. So whatever the Fed does or NFP's will give you a 100 pip swing. What do you do for the other 18 trading days.
Look at FX like Equity's, in Equity's you have what's called iceberg orders, you can see client top of order book. (At best-market execution) step one would be to get a system which provides level 2 data. Step 2 would be to find a broker that dosent B book your trades (very hard to find an honest broker) A book only, will allow your trades to be matched into level 2 flow more cleanly! If you get slippage you know why. It's all about the pips!!!

James
Light Peak Capital
Dirk Schaefer (sfx_systems)
Nov 24 2013 at 07:23
321 ieraksti
dgaf posted:
'The Bigger The Lie, The More People Will Believe It' - Joseph Goebbels

We´ve seen this for goin into wars, especially AFTER WW2, we´ve seen this when the Euro was born and we do see this today when our Politicans tell us about their truly effort to do everything for the people.

So because banks are the real heads of this world of course markets have changed!!!
Geht Nich Gibt´s Nich
felotus
Nov 24 2013 at 09:18
53 ieraksti
LightPeakCapital posted:


Off course!
Retail traders (most of) do not have access to level 2 data. Meaning not only do you have to teach yourself TA and those of you who don't have deep pockets or are over leveraging so also learning fundamental analysis. Still makes no a great deal of sense. As Microsoft for example have a trading floor bigger than most Tier 2 banks! Now banks and large cooperates can move the market. So whatever the Fed does or NFP's will give you a 100 pip swing. What do you do for the other 18 trading days.
Look at FX like Equity's, in Equity's you have what's called iceberg orders, you can see client top of order book. (At best-market execution) step one would be to get a system which provides level 2 data. Step 2 would be to find a broker that dosent B book your trades (very hard to find an honest broker) A book only, will allow your trades to be matched into level 2 flow more cleanly! If you get slippage you know why. It's all about the pips!!!

James
Light Peak Capital

1) Broker won't book your positions unless it's a few millions or you've been consistently profitable.

2) You have to stop to think that not being booked is a bad thing. When a broker doesn't book you, you have less slippage as your order doesn't go through the market, the broker creates extra liquidity for free.

I'm not sure level 2 data will help you trade, I'm sure it won't actually, unless you're trying to do high frequency.
I work in a hedge fund.
Bob LLewellyn (ForexAssistant)
Nov 24 2013 at 21:36
465 ieraksti
'Why 90% of retail traders fail... '

Because they don't know what they are doing.

Forex is actually the safest market available, there are just a lot of newbies that like to take risks just like there are a lot of people that play the lottery.

The real question is “Is safe trading possible?”

Here are two demos, (I never share my live accounts with the curious or the government). Go to the histories tab and think about what you are seeing. The problem with forex traders is that to become good you had to go through a lot of charlatans. This jades the trader so they think everything and everyone is evil and out to get them. I seldom even talk with traders as they are sure that they are right and there has to be some gimmick to anything that proves them wrong.

What that means is that they will look at the data and say 'Oh yes, it is working now but it will crash and burn all your money' then they pat themselves on the back for seeing through an obvious deception and never learn why they are losing money. After all if they can't do it, it can't be done. Traders are the hardest people to talk to because they have all been jaded and they keep losing instead of learning how to do it right because they have a fear of being taken for a ride once again. How does that psychology work for you? Its not what traders want to hear so they don't listen.

OK, here are the two accounts.
RISE Chart
https://www.myfxbook.com/members/ForexAssistant/rise-lucror/422518

RISE AUDCAD
https://www.myfxbook.com/members/ForexAssistant/rise-audcad/578913

Good luck to all

Bob
where research touches lives.
felotus
Nov 25 2013 at 10:20
53 ieraksti
Bobby my friend

Stop bullshiting people with demo accounts. Start a hedge fund if you're good.

- Your LUCROR account is down 20% on an equity base
- Your AUDCAD looks good but it's mathematically impossible to have a straight line like this unless you go martingale.

Forex is the hardest market on earth, it's a well known thing, ask any professional / trader. Buy-and-hold 10 or 20 different stocks will be more profitable than trying to make consistent money on the fx market.

We're a hedge fund and part of our activity is to bet against 'retail traders', we take the exact opposite directions of retail traders on the fx market.
I work in a hedge fund.
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