Thread: Got into a discussion with someone, he says forex is inherently a losing game

. .compared to stocks

Here - http://forum.bodybuilding.com/showpo...1postcount=136. And - http://forum.bodybuilding.com/showpo...1postcount=174

Originally Posted by ;

Together with both stock investing and Foreign Exchange trading, there's a commission, right? There is sometimes a percentage commission, but also a fee. Like you might buy 910 Yuan for $1.00, but if you sell the 910 Yuan back immediately you'll just get $0.995. That's called the bid-ask disperse. Consequently, if you bought and sold one million times a day, your funds would dwindle to $0, with both stocks and Foreign Exchange.

The distinction between Foreign Exchange and stocks, is that Foreign Exchange comes with an EXPECTED yield of zero. Over time, you anticipate that currency rates will be pretty secure, but with plenty of volatility. Consequently, if you buy 901 it will likely still be worth roughly $1 in five years. A stock, however, has an estimated yield of about 8 percent yearly. That's because there's an company behind the stock attempting to make profits. Therefore, if you buy $100 worth today, it will likely be worth $147 in five years (could change greatly).

So if you exchange currency, you will likely have ups and downs, but in the long run, you may break . When you factor commissions, then you may lose money. It's comparable to playing roulette, in that the home (market makers) will triumph. But if you buy and hold a diversified portfolio of stocks, you will likely make money.

Questions?
Can you show me a study of Foreign Exchange traders making money on the typical?

Originally Posted by ;

1. My contention is that you cannot know where the exchange rate is going to go during that time. It might go far up, it might go way down. However, the anticipated exchange rate on average, will be precisely what it was when it was bought by you. So that doesn't really alter anything.

2. I know the commissions could be reduced. I would expect the trade to shed two pips, which would lose you your money.

3. Why do you do something where the odds are stacked against you? Were you aware there is no 30 year period in history? If you buy and hold stocks for the long term, you are almost sure to make the long term.

What do you guys think? I disagree, but I don't know enough about how the markets work to clarify.

Originally Posted by ;

..compared to shares

Here - http://forum.bodybuilding.com/showpo...1postcount=136. And - http://forum.bodybuilding.com/showpo...1postcount=174

What do you guys think? I disagree, but I don't understand enough about the way the markets operate to really clarify.

He is right. I put 5000 USD to forex, six months later I”ve barely broken . My broker got in commissions around 3000 USD. There is truth to this expression where are the customers' yachts? Had I invested that same money in the stock market in my country I'd have gotten around 20%.

Originally Posted by ;

So if you bought AUDJPY at Jan 2009 in 65, and sold it in Jan 2010 in 85, you'd have made a 31% capital return plus another 3% or so attention.

Levered it 2x, and you created 70 percent this past year. And this took as much prognostiion.

That is a huge if. How about in the event that you'd gone brief the EURUSD at 1.00?

Originally Posted by ;

That is a big if. How about if you'd gone brief the EURUSD at 1.00?

You would have struck your stoploss at some point.

If you had shorted AUDJPY at 65 and held it, then you would hurt at this time. You are protected by your stoploss . Locate a service line, put your SL and proceed.

If you longed AUDJPY at 65, you can easily have a 2:1 leverage with a stop loss of 100 pips to get a 2 percent risk.

Your friend is right - it is a losing game. But, there's a way to generate money!

Sell some BS indiors, sell BS trading novels, sell BS Foreign Exchange eduion courses.

There are always suckers waiting to buy the following can not Eliminate system

Originally Posted by ;

Your friend is right - it is a losing game. However, there IS a way to make money! Sell a few BS indiors, sell BS trading novels, sell BS Foreign Exchange eduion courses. There are always suckers waiting to buy the next can not lose system

I like this response, a lot.
100% correct, but not associated with first Forex market, but to his accessories.

Perhaps I'm wrong, but if you buy 51 percent of stocks then you can give orders to this company supervisor and you're able to control it.
Then it is possible to make to cover your invested money even in the event that you ruin afterwards the company and you will know when to exit.
Using and having those internal information provides you an edge vs Forex market. I believe.

The guy is talking about stocks vs forex as a long term investment. In that respect I'd agree with him. Forex (atleast in my opinion) is not suited as a long term investment you'd not maintain a position for years and years just like you might do with stocks. I am sure there are but I would not recommend it unless a long term trend that spans years has been established. This doesn't mean your short term agy in forex can't have a long term outlook.