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If you have to ask, please don't bet on currencies. Even if you didn't have to ask, still don't bet on currencies.
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Seriously.
Alan G also agrees:
"Nonetheless, despite extensive efforts on the part of analysts, to my knowledge, no model projecting directional movements in exchange rates is significantly superior to tossing a coin. I am aware that of the thousands who try, some are quite successful. So are winners of coin-tossing contests. The seeming ability of a number of banking organizations to make consistent profits from foreign exchange trading likely derives not from their insight into future rate changes but from market making."
That's from 2004, read the rest of it
here.
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i firmly agree that there is no model that can predict currency movements.
i do believe that there is a ton of money to be made via betting on currencies since finding actors willing to lose a ton of money and taking the opposite side of their actions is clearly a winning strategy.
no systematic "model" can win though as they are likely too simplistic and just wrong.
you can though, build a trading system (like my old employer's) that uses signals etc. to consistently destroy the currency market by writing down your own logic etc.
i guess that could be considered a model in a sense, but i think it isn't at all what AG was referring to. if it is, then i don't agree and instead disagree as if you can make money from losing participants, and can write a model to find those instances and make money off of it, then clearly you can make a model to beat the currency markets.
my old employer did it for over 20 years and offered a fund to do it for 15.
Barron