An alternative to Betfair?
If it is full of cowboys, surely that's a good thing, as it means that the market will be easier to exploit. But that's a sweeping statement to make about a market whose fortnightly turnover is equivalent to the world's GDP... 
As for avoiding it like the plague, try telling that to some of the financial traders I know who make a very good living from it.
The challenge with Forex is to find a technique that works (and there's a lot of useless systems out there!), and to apply it to the letter. As the author of the system Peter was referring to points out, if you don't follow the rules strictly, you might as well save yourself the bother of trading and just send off a large cheque to the traders you're up against! So as with Betfair trading, it's a case of 'many are called, few are chosen'.
Jeff
As for avoiding it like the plague, try telling that to some of the financial traders I know who make a very good living from it.
The challenge with Forex is to find a technique that works (and there's a lot of useless systems out there!), and to apply it to the letter. As the author of the system Peter was referring to points out, if you don't follow the rules strictly, you might as well save yourself the bother of trading and just send off a large cheque to the traders you're up against! So as with Betfair trading, it's a case of 'many are called, few are chosen'.
Jeff
jimrobo wrote:The professionals I know laugh when you mention forex and say it's full of cowboys and to avoid it like the plague.
I've got several friends who I have met over time who work in the city, generally on the trading and IT side of things, and it's clear some of the big institutions invest a lot of money to get any edge they can. I just can't compete with that. I seem to have done very well at long term investing but that's thanks to Buffett and Graham. I know it's not everybodies cup of tea but I earn money whether I do something or not, whether I sit in front of my PC or not and that's a great feeling.jimrobo wrote:The professionals I know laugh when you mention forex and say it's full of cowboys and to avoid it like the plague.
Peter, I think you're underestimating yourself.Euler wrote: Some of the big institutions invest a lot of money to get any edge they can. I just can't compete with that.
On Betfair, you're up against highly intelligent people and sophisticated organisations, yet you beat the market day after day.
Also, when you take the long-term value approach, you're buying shares from the big institutions you refer to. So whichever method you use, you need to be able to outsmart the City traders.
But each to their own...
Jeff
A couple of Eureka moments for me in the markets.
(1) When I started doing the football pools when I was young. I realised that a lot of people used no skill at all to make thier selections.
(2) The fact that gamblers thought, because something had happened a lot in the past it was thought to be more likely in the future.
Those two guiding principles have stuck in my mind for years.
I think exploiting this behaviour is difficult, because people who are seeking to profit it often fall victim to it themselves!
(1) When I started doing the football pools when I was young. I realised that a lot of people used no skill at all to make thier selections.
(2) The fact that gamblers thought, because something had happened a lot in the past it was thought to be more likely in the future.
Those two guiding principles have stuck in my mind for years.
I think exploiting this behaviour is difficult, because people who are seeking to profit it often fall victim to it themselves!
Quite.
IMHO, one of the hardest challenges a trader faces is to avoid succumbing to very psychological weaknesses you're trying to exploit!
Jeff
IMHO, one of the hardest challenges a trader faces is to avoid succumbing to very psychological weaknesses you're trying to exploit!
Jeff
Euler wrote: I think exploiting this behaviour is difficult, because people who are seeking to profit it often fall victim to it themselves!
Not when the cowboys have more information and are lightspeeds ahead of you. If you can find consistent profits then thats great but if you can do it when the odds are so far against you, you should be trading something that you are on a level playing field with everyone else and you will make far more.Ferru123 wrote:If it is full of cowboys, surely that's a good thing, as it means that the market will be easier to exploit. But that's a sweeping statement to make about a market whose fortnightly turnover is equivalent to the world's GDP...
As for avoiding it like the plague, try telling that to some of the financial traders I know who make a very good living from it.
Not necessarily...
Forex is the biggest casino in the world, so if you can get an edge over the house (and I know people who have), then the earning potential is enormous.
That said, I'd be very happy with income some Betfair traders are making!
But I'm not sure that it's harder to get an edge with Forex than Betfair trading. Remember you're up against banks who once thought that sub-prime mortgages were a first-class investment!
Jeff
Forex is the biggest casino in the world, so if you can get an edge over the house (and I know people who have), then the earning potential is enormous.
That said, I'd be very happy with income some Betfair traders are making!
But I'm not sure that it's harder to get an edge with Forex than Betfair trading. Remember you're up against banks who once thought that sub-prime mortgages were a first-class investment!
Jeff
jimrobo wrote: Not when the cowboys have more information and are lightspeeds ahead of you. If you can find consistent profits then thats great but if you can do it when the odds are so far against you, you should be trading something that you are on a level playing field with everyone else and you will make far more.
I am not talking about betfair trading.
What I am saying is if someone can consitently make a profit on forex where everything is massively stacked against them, they should be able to make a lot more on other financial products where the odds are not stacked as high against them and sufficient scalability.
What I am saying is if someone can consitently make a profit on forex where everything is massively stacked against them, they should be able to make a lot more on other financial products where the odds are not stacked as high against them and sufficient scalability.
Why do you think that your odds are more stacked against you with Forex than with (say) commodity futures or shares?
I'd have thought there was no difference - I'd say all markets are the same in terms of the psychological dynamics that shape them.
Jeff
I'd have thought there was no difference - I'd say all markets are the same in terms of the psychological dynamics that shape them.
Jeff
jimrobo wrote:I am not talking about betfair trading.
What I am saying is if someone can consitently make a profit on forex where everything is massively stacked against them, they should be able to make a lot more on other financial products where the odds are not stacked as high against them and sufficient scalability.
I don't understand why people bet on virtual racing and play on casino machines. OK, some people might find it fun, but I can think of less expensive ways of enjoying myself!
I was in my bookie this morning, and a guy was swearing at the casino machine. Did he think that the bookie, in their infinite benevolence, had installed a machine whose odds weren't stacked heavily in the house's favour?!?
Jeff
I was in my bookie this morning, and a guy was swearing at the casino machine. Did he think that the bookie, in their infinite benevolence, had installed a machine whose odds weren't stacked heavily in the house's favour?!?
Jeff
Euler wrote:When I started doing the football pools when I was young. I realised that a lot of people used no skill at all to make thier selections.
a lot more is stacked against you in forex. the price informtion on a lot of charting is not real time so retail banks have a massive speed advantage over you. Forex is not an exchange so the price you see is not the price you get filled on, so as well as being behind the banks you also have to be several pips in profit before you are actually in profit according to the price you are seeing in your charts. Unless you have level 2 access you have no idea what orders are placed at what prices and the larger institutions can see orders.
It is literally like you trading the one click screen on betfair with a 5 second refresh against peter with a ladder, FMD and a 200ms refresh.
What I am saying is if someone can consistently make money on a product that is probability wise stacked against them then on a product where it is a level playing field over a long term period they will make more money.
I'm not having a go at forex I am just saying why the professionals I know do not consider forex a professional trading product for a standard retail trader.
It is literally like you trading the one click screen on betfair with a 5 second refresh against peter with a ladder, FMD and a 200ms refresh.
What I am saying is if someone can consistently make money on a product that is probability wise stacked against them then on a product where it is a level playing field over a long term period they will make more money.
I'm not having a go at forex I am just saying why the professionals I know do not consider forex a professional trading product for a standard retail trader.
It's true that the information you get isn't 100% real time. But if you're trading on the 5 or 15 minute charts, the fact that you might be a second or two behind the action is of no consequence IMHO.jimrobo wrote:a lot more is stacked against you in forex. the price informtion on a lot of charting is not real time so retail banks have a massive speed advantage over you
That's not the case with all currency pairs - you can trade EUR/USD with a 1 pip spread, for example. And if you're trading a larger timeframe (say 1 hour plus), the spread is neither here nor there.jimrobo wrote:Forex is not an exchange so the price you see is not the price you get filled on, so as well as being behind the banks you also have to be several pips in profit before you are actually in profit according to the price you are seeing in your charts.
I could probably get level 2 information with Pro Spreads, but I don't need to know about the wom. All the information you need is contained in the price action.jimrobo wrote:Unless you have level 2 access you have no idea what orders are placed at what prices and the larger institutions can see orders.
I beg to differ from them, having corresponded with professional Forex traders and used a Forex trading room, full of full-time pros.jimrobo wrote:I'm not having a go at forex I am just saying why the professionals I know do not consider forex a professional trading product for a standard retail trader.
Jeff