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No Win Situation.
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Author:  falsedave [ Wed Aug 29, 2012 1:56 pm ]
Post subject:  No Win Situation.
Hello first post here so hello to everyone.

Firstly congratulations on this forum. I been into Forex now for about six months now and have searched many a forum. Always found people boasting about how much they have put on there account in a short time. I may be very cynical but I cant help think there are a lot of post put there by the criminals to make me risk more of my deposit. First forum I have found that doesnt seem to have any of that.

I have yet to trade live yet, only demo's so I dont have much experience trying to speak of.

I understand that Forex is a zero sum game. For someone to win someone must also lose. But my question, I know I may offend some when I say this, Is Forex a way to earn a decent income or is it just a case of like gambling at the casino the house (in this case the criminal) always wins.
Author:  garyfritz [ Wed Aug 29, 2012 2:14 pm ]
Post subject:  Re: No Win Situation.
It's not strictly true to say "for me to win, someone must lose." It's not that simple. The person on the other side of your trade probably doesn't have exactly your time frame, risk level, etc. So maybe you go long EURUSD. It goes up, you make money. Does the guy on the other side lose? Maybe, maybe not. It might be a bank that's hedging its currency positions with a EURUSD short. The bank might not care whether EURUSD goes up or down, because its overall currency position is hedged and flat.

But yes, as a simplified view of the situation, it's probably fairly accurate to say "if I win, somebody else lost."

But this is true of many/most businesses. If your restaurant is doing well, that means all your customers aren't eating at the restaurant down the street. If you sell BMW autos and your business does well, every BMW you sell represents a Ford, Toyota, etc. that DIDN'T sell. When your business succeeds, you take business away from your competitors. FX is no different.

Can you earn a decent income in forex? Certainly. Is it easy? Definitely NOT!! Just like succeeding in most businesses isn't easy. Less than half of new businesses survive for 5 years. (And most of the failures invest and lose a LOT of money along the way!)

And most of those business owners are throwing their heart and soul into their venture. They work it 80 hours a week to try to make it fly. They've probably risked every penny they (and their friends and family) have to start the business, so they do everything they can to make it succeed. By comparison most forex traders are dabblers. They play with it for a few hours, maybe experiment with a demo account if they're smart, maybe lose some real money if they're not. Most give up.

So it's no wonder the forex success rate is lower than 50%. Quit your job, mortgage your house, borrow every cent you can, and work full-time at developing a successful trading approach -- just like any ordinary business owner -- and I'll bet you'll have a much higher success rate.

(Just to be clear, that DOES NOT mean I recommend quitting your job and mortgaging your house!!!)
Author:  macman [ Thu Aug 30, 2012 11:15 am ]
Post subject:  Re: No Win Situation.
falsedave wrote:Hello first post here so hello to everyone .....

I understand that Forex is a zero sum game. For someone to win someone must also lose. But my question, I know I may offend some when I say this, Is Forex a way to earn a decent income or is it just a case of like gambling at the casino the house (in this case the criminal) always wins.
Firstly welcome to probably the best forex forum there is 8-)

Just to elaborate on Gary's post a little, your basic assumption is correct, but the huge scale of the forex market makes that assumption too simplistic. The forex market trades around 4 trillion US$ daily.

Right now my own company is involved in a project where the end customer is one of the world's largest chemical companies, with a revenue in 2011 of 15.7 billion Euro & over 57,000 employees world wide. They operate in a so called mature market, so much of their business profit actually comes from buying & selling companies - several every week.

Recently I was talking to one of their managers and the subject of forex came up, as I run my own forex training site & trade company funds.

The guy told me they have their own forex trading division, so naturally I was very interested. :o
He also told me that creating profit is not the object of the division. They simply hedge their risk when buying/selling companies across various currencies.

These are very serious amounts of money we are talking about here, so you can see the diversity of the forex market offers plenty of space between the cracks for small fish like us to nibble a bit of profit.

The bad news is that you will probably need to spend more hours learning to become profitable than it takes to gain a Ph.D. As you rightly say this aspect is anything but emphasized by the feeding frenzy that is carefully designed to part beginners from their cash.

Before deciding if you really want to become a serious forex trader, ask yourself if you have the time and discipline needed to succeed.

Best of luck swimming with the sharks that sadly much of retail forex trading has become :cry:
Author:  falsedave [ Sun Sep 02, 2012 4:28 pm ]
Post subject:  Re: No Win Situation.
Thanks for all the information and re-assurance.

Like you say there is so much stuff out there to try and get the new trader to part with there cash as quick as possible. I was getting the feeling that maybe its not a job that you could do full time at home, (basically I was losing) and the only people that were profiting out of it were the brokers themselves, much like the online casino's and such like.

Your words have encouraged me not to move on from the demo accounts yet and to keep slogging away to learn the trade of trading and the patterns and keep on reading.
Author:  Jeuro [ Wed May 07, 2014 10:11 am ]
Post subject:  No Win Situation.
falsedave ยป Wed Aug 29, 2012 3:56 pm wrote:Hello first post here so hello to everyone.

Firstly congratulations on this forum. I been into Forex now for about six months now and have searched many a forum. Always found people boasting about how much they have put on there account in a short time. I may be very cynical but I cant help think there are a lot of post put there by the criminals to make me risk more of my deposit. First forum I have found that doesnt seem to have any of that.

I have yet to trade live yet, only demo's so I dont have much experience trying to speak of.

I understand that Forex is a zero sum game. For someone to win someone must also lose. But my question, I know I may offend some when I say this, Is Forex a way to earn a decent income or is it just a case of like gambling at the casino the house (in this case the criminal) always wins.

Going back to this old thread and reviving the most misunderstood concept ( by newbies and nor so newbies) of what the "zero sum game " mean in forex.

Absolutely nothing to do with profits or losses.

It is zero sum in "units" of currency.
Simple put .. if you want to buy 10 000 euros and place an order when the ask is 1.3920 , somebody needs to be willing to sell/exchange those 10 000 euros at that price. Zero sum, end of history.

If by the time your order hit the market all units at 1.3920 are gone ... and no else selling at that price.. ask quote will go up, until someone is willing to sell 10 000 unit .. making it infinite "zero sum game" in "units" each millisecond.

Same thing on the other side of the coin when you are holding a currency and want to sell it.

J.
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