Posts Tagged forex
95% of traders lose?
Posted by Peter Webb in Bet Angel on November 5th, 2010
95% of traders lose is a very common statistic quoted, but I’ve never seen any data on it. Somebody recently sent this to me about forex traders, which I thought made interesting reading. Obviously this is limited to the scope and definition of the survey but I think it’s an interesting article and discussion. It also shows the importance of money management and low transaction costs.
As they say, 47.3% of statistics are made up on the spot!
http://forexmagnates.com/us-forex-brokers-account-profitability-comparison/
Betfair’s LMAX up and running
Posted by Peter Webb in Bet Angel on October 24th, 2010
It looks like Betfiar’s financial markets operation, LMAX, is up and running. I am on their mailing list but haven’t received anything yet. However, if you visit the following site you can read about LMAX and sign up for an account and browse the site.
The first thing I tried to find was charges. It appears Betfair are going to adopt a normal financial market model of charging for a buy and sell, there are some example trades here: -
http://www.lmaxtrader.co.uk/cfd-trading/cfd-trading-examples
I had dreamed that they may not adopt the traditional charging model, but I guess that was a bit optimistic. However an open market platform with small costs probably does open up some opportunities. It’s a very competitive marketplace so it will be interesting to see how this all pans out. They are going to have to work very hard to get customers. Who knows, I may even get an account manager!
Proposed tax on forex trades to raise $50bn aid?
Posted by Peter Webb in Bet Angel on May 26th, 2009
Hmm, more like proposed tax ruins perfectly efficient market. Well fairly efficient, anyhow. Saw this in the Sunday papers over the weekend when I was at the gym.
I do wonder on the credentials of politicians, especially ones that tax everything that moves. Forex trading is a tempting market given the quoted turnover of $1 quadrillion ($1000 million). But the reason this market is so huge is because of the amount of speculation that takes place. I know John at Juicestorm is a keen forex trader and, in fact, Betfair markets are very similar in terms of their function and use. There is a lot of activity at the money in the markets in the hope of scalping a few ticks here and there. But a lot of trades come to nothing or are closed out for a small loss. It’s a numbers game, trying to get the positives to outweigh the negatives. Some people scalp, some swing trade but over all there is mountains of activity right on the money and a lot of it is not value oriented but trading oriented.
The prime minister is under pressure from a coalition of UK and international campaign groups to back a 0.005% micro-tax on the market. It is estimated that it would raise up to $50 billion a year. The trouble is that money would effectively be a whopping rake on what is effectively a zero sum market. Margins are very tight in forex and any additional costs would ruin it as a trading market. If such a tax did happen then a whole legion of traders would get wiped out I suspect. If that happened, that figure of $1 quadrillion would shrink, raising less tax.
I think the trouble is these sorts of taxes are seen as quite soft as people wouldn’t see it in their pocket. It’s almost as bad an idea as rasing taxation and lowering limits on pensions at a time when pensions are underfunded. Boy are future generations going to pay for that!
Anyhow, I’ll keep an eye on this story. Can’t see it working to be honest!