Trading Foreign Currencies

Lucky · #1 08-04-2006, 01:55 PM

I was chatting with a guy on Full Tilt last night who says he trades foreign currencies for a living through forex.com and makes 3k a week, trading in real time about 4 hours a day. He says he's in and out, holding no overnight positions. He wasn't pushing or selling any personal program or website. Also, he's clearly not making a living from poker, so I'm figuring he must be doing well, or at least running good in currencies.

I've heard many day traders have moved into this as, unlike stock market, you can do it with less than the 25k minimum now in place for stock market. I've also heard this area is rife with scam artists and their get rich quick systems, etc.

Additionally in reading about it, it seems similar to poker in that about 90% lose money and 10% make money, and those who make money are specifically making it from the mistakes of those who lose it.

Like to hear from the experts out there what they think about the potential of this and what the learning curve is.
Are people besides Buffet making money here, or is the learning curve/violatility too big to make it worthwhile to consider?

fizzle · #2 08-04-2006, 02:41 PM

Lucky,

You're right, there are a lot of scam artists out in the world of Forex. I personally got into it when I wanted to take my poker winnings and put it into some sort of investment. There are a lot of advantages to the foreign exchange market when compared to the stock market.

I spent a couple months learning as much as I could about it. There are definitely people out there making a lot of money in this. The system I'm using right now gave me a return of 30% last month, making it a very good month (above what is typical for the system).

The power behind this, as you probably know already, is compounding. It gives you an expontential rate of return as opposed to a linear return like poker. You're making your money work for you.

So to sum up, it's definitely worth it. It takes just as much, if not more work to achieve success when compared to poker.

Lucky · #3 08-04-2006, 02:49 PM

[ QUOTE ]
Lucky,

You're right, there are a lot of scam artists out in the world of Forex. I personally got into it when I wanted to take my poker winnings and put it into some sort of investment. There are a lot of advantages to the foreign exchange market when compared to the stock market.

I spent a couple months learning as much as I could about it. There are definitely people out there making a lot of money in this. The system I'm using right now gave me a return of 30% last month, making it a very good month (above what is typical for the system).

The power behind this, as you probably know already, is compounding. It gives you an expontential rate of return as opposed to a linear return like poker. You're making your money work for you.

So to sum up, it's definitely worth it. It takes just as much, if not more work to achieve success when compared to poker.

[/ QUOTE ]

What kinds of hours do you put in trading as opposed to poker and how does it compare for stress/fun?

Also, where is a good starting point for learning, i.e. is there a twoplustwo type site?

fizzle · #4 08-04-2006, 03:08 PM

[ QUOTE ]

What kinds of hours do you put in trading as opposed to poker and how does it compare for stress/fun?

Also, where is a good starting point for learning, i.e. is there a twoplustwo type site?

[/ QUOTE ]

Now that I have my system, and since it's mostly mechanical, only about half an hour a day. I'll also monitor it throughout the day, but it really isn't too much. I've also written a bot to automate a lot of it as well (but it's a little buggy still).

It's stressful, and not fun at all (for me). Which is why I went for a mechanical system instead of a discretionary one. You'll learn the difference when you do your research into this.

To start off, http://www.babypips.com is a great place.

As for forums like 2+2, there really isn't something as amazing. There's plenty of them that are quite good however. Try:

http://www.forexfactory.com
http://www.strategybuilderfx.com
http://www.forextsd.com
http://www.elitetrader.com (not just forex, but very big)

I hope that helps.

If I continue to have success I may decide to trade for other people. I was thinking 2+2 would be a great place for this as there are plenty of rich people looking to invest. I'm not sure how most would take it though, as the theoretical returns possible in Forex are way beyong most people's beliefs.

hawk59 · #5 08-04-2006, 04:34 PM

[ QUOTE ]
Lucky,

You're right, there are a lot of scam artists out in the world of Forex. I personally got into it when I wanted to take my poker winnings and put it into some sort of investment. There are a lot of advantages to the foreign exchange market when compared to the stock market.

I spent a couple months learning as much as I could about it. There are definitely people out there making a lot of money in this. The system I'm using right now gave me a return of 30% last month, making it a very good month (above what is typical for the system).

The power behind this, as you probably know already, is compounding. It gives you an expontential rate of return as opposed to a linear return like poker. You're making your money work for you.

So to sum up, it's definitely worth it. It takes just as much, if not more work to achieve success when compared to poker.

[/ QUOTE ]

Fizzle,

What is typical for your system. At 30% month you are multiplying your money by 23x in one year, and in 5 yrs you would have turned $1 into $6.8million. I suppose I would accept a 15% monthly return where I could turn $1 into $4,400 after 5 yrs but anything less is probably not worth it. But I agree it is important not to listen to the get rich quick fools.

fizzle · #6 08-04-2006, 04:50 PM

[ QUOTE ]

Fizzle,

What is typical for your system. At 30% month you are multiplying your money by 23x in one year, and in 5 yrs you would have turned $1 into $6.8million. I suppose I would accept a 15% monthly return where I could turn $1 into $4,400 after 5 yrs but anything less is probably not worth it. But I agree it is important not to listen to the get rich quick fools.

[/ QUOTE ]

Typical over the past year has been 10-15% a month. So about 5x your money each year.

One thing I'm not sure about is how long the system will work. It takes advantage of a tendency in certain currency pairs, so who knows how long that will exist?

crazy canuck · #7 08-04-2006, 07:25 PM

fizzle and hawk59, you might want to check out this site:

collective2

You can buy and sell trading signals. Disclaimer: I haven't used it and have no affiliation with it.

maxtower · #8 08-07-2006, 12:35 AM

This sounds too good to be true, and while I am sure you have made money in the past, this seems extremely risky. Anyone looking for an investment should not be doing this. The problem with currencies as an investment is that you really don't own anything. As opposed to a company which can grow value, currencies are typically under constant inflation, decreasing in value.
Average returns in the stock market are positive.
Average returns trading currencies are negative.
Max

fightnwin · #9 08-07-2006, 03:43 AM

Every investment/trading has risk to it, if you can do it good you'll make money.

maxtower · #10 08-07-2006, 05:14 AM

Trading foreign currencies each day is not investing, its pure speculation. I imagine that after fees, the majority of people doing this lose money.
If you want to maintain a cash position, it may make sense to diversify your cash holdings with other currencies, however, over time all currencies lose value due to inflation. If you are going to be investing, why not invest in something that has the potential to gain value?
Max