# Is anybody losing money on Forex?



## NickF (11 May 2014)

Hi All,

I am curious if there is anybody consistently losing some significant amount of money. 
I am not talking about losing the pips that represent the fee, I am talking about something significantly more.

Nick


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## NickF (11 May 2014)

NickF said:


> Hi All,
> 
> I am curious if there is anybody consistently losing some significant amount of money.
> I am not talking about losing the pips that represent the fee, I am talking about something significantly more.
> ...




You know, I am looking for a person or more who claim they are so unsuccessful that almost any transaction they make, end up losing money. Because I find it hard to believe there are such people. If such people existed, they would be very successful and very appreciated as advisors.


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## pinkboy (11 May 2014)

https://www.aussiestockforums.com/forums/showthread.php?t=28356

Why don't you scan the 'Forex' forum.....oh look, here's the same question 3 threads down. 

pinkboy


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## NickF (11 May 2014)

pinkboy said:


> https://www.aussiestockforums.com/forums/showthread.php?t=28356
> 
> Why don't you scan the 'Forex' forum.....oh look, here's the same question 3 threads down.
> 
> pinkboy




I've seen that question and it's different from mine. There are a lot of wingers out there, but I know they all make money. I am looking for somebody who can prove me they are losing money. Why doesn't somebody tell me: look, I am going to buy this currency at this price right now and I can almost guarantee it will lose money in this amount of time. I am looking for the king of the losers, who can prove they can lose with facts. It does not even have to be a real transaction, a virtual transaction is equally as good.
All I will do is to do the same transaction in my forex virtual account and if I make money, I will praise his/her skills.
If they convince me they are consistent losers, I may even pay real money to them! 
Simple, isn't it? 

Nick


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## cogs (11 May 2014)

Hi Nick,

So is your question directed at those who haven't had to work hard for their money, who maybe practice 'madness', repeating the same mistakes over and over again, simply blowing their maybe, inherited or easy come by cash?


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## NickF (11 May 2014)

cogs said:


> So is your question directed at those who haven't had to work hard for their money, who are practice 'madness' repeating the same mistakes over and over again, simply blowing their maybe, inherited or easy come by cash?




It really doesn't matter if they pick the trades without any thinking or it they complete a phd before they place one trade. As long as they lose more than the inherent trading fees, their advice is valuable enough to the rest of us 
I would be one of those people, but my proven (bad) track record is too short to be of any value...


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## minwa (11 May 2014)

How are you going to exit ?

Most people lose a lot because they move their stop/overleverage. Are you going to do the opposite, underleverage and not take profit ? Or are you going to take the same position size, overleverage, and not take profit ?

Most that follow their system and risk sensibly 0.5-1%per trade are going to chop around breakeven to negative skewed because of spread. You're going to have to overcome the spread which is an uphill battle.

Also when you tell someone you're going to follow their signals and do the opposite, their psychology changes which changes their trading behaviour. Maybe they will just spew out random trades to please you as they are going to receive your compensation anyway ? Are they going to demo trade and not put live money on - we all know demo traders are more profitable, are you going to reverse their profitable demo trades ?


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## cogs (11 May 2014)

Ok, I think I follow. There is unfinished news business from last week, but....

Go short EURUSD tomorrow on open and close it 24hrs later. Like normal trading the 24hrs could extend out to 48hrs to lose even more, if that's the goal.

Go short GBPUSD tomorrow on open and close it 24hrs later. Ditto above.

Like consistent losing positions, they let losers run, so giving exact closing times would not be consistent with consistent losers, hence a window to maximise losses. 

I could probably throw some others into the mix, but I think some would take it too seriously.

Good points Minwa.

*THIS IS NOT TRADING ADVICE!* This reply is merely in humour to the initial posting. I would not even trade the inverse of the above.


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## NickF (11 May 2014)

minwa said:


> How are you going to exit ?
> 
> Most people lose a lot because they move their stop/overleverage. Are you going to do the opposite, underleverage and not take profit ? Or are you going to take the same position size, overleverage, and not take profit ?
> 
> ...




Yes, you are correct in saying that if people are aware of being watched, they will not act "naturally" - like when filming a person, if they are aware of being filmed, they will become unnatural. 
Basically, I just thought to get some people in the formum saying "I purchased this, at this price" and then wait for them to come back a few hours or days later and complain - what did I tell you, look how much I lost! That would be the exit for me 
Since I don't do real trades, I just thought of this for the fun of it. If over 90% of the people lose money in the market (more than the spread), then clearly it should be a way to act the opposite way than the crowd and make a bit of money. It is true that spreads represent a significant portion of the loss, but somehow I believe there are many people losing much more than just the spread. 

Nick


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## NickF (11 May 2014)

cogs said:


> Ok, I think I follow. There is unfinished news business from last week, but....
> 
> Go short EURUSD tomorrow on open and close it 24hrs later. Like normal trading the 24hrs could extend out to 48hrs to lose even more, if that's the goal.
> 
> ...




Cogs, you are confusing me. Are you telling me to go short if I want to lose or if I want to make money? 
I don't want somebody to tell me what to do. I want a consistent loser to tell me what they just did (a real transaction, either with real money or with virtual money), and then I will do the opposite and see what comes out 

Yes, agree. People should not use all this advice for real trades, it's just for fun. After all, what if that loser hits the jackpot? 

So far, my virtual account is around $49750. I started about a week ago at $50000. I don't care at what pace it does grow (and I don't care if it goes the other way around). I my account drops, at least somebody would have (hopefully) made some money. If my account increases, at least somebody will have the satisfaction to to say "what did I tell you, I lost money, just as I predicted!"  I know that may be not much of a reward, if that person lost real money...

Nick


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## Wysiwyg (11 May 2014)

It won't work. The results will be like the double slit experiment. Things change when "observed". 



[video=youtube_share;Q1YqgPAtzho]http://youtu.be/Q1YqgPAtzho[/video]


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## NickF (11 May 2014)

Wysiwyg said:


> It won't work. The results will be like the double slit experiment. Things change when "observed".




Yes, I also thought of that, but I didn't mention it - people may have thought I'm too smart 
However, this is why I mentioned that people should inform us about their real trades - if things change, they may end up making money, which is good for them, if the result is still bad for them, it should be good for the rest of us.

Nick


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## pinkboy (11 May 2014)

No one is going to tell you a specific trade as to follow the 'never give financial advice' rule of the forum, and the same rule for general outside the forum as if you're not qualified to give advice you could be sued. 

pinkboy


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## NickF (11 May 2014)

pinkboy said:


> No one is going to tell you a specific trade as to follow the 'never give financial advice' rule of the forum, and the same rule for general outside the forum as if you're not qualified to give advice you could be sued.
> pinkboy




I understand. Too bad, I thought it would be fun.
But, for example - if I place a virtual trade in my account and I state - I purchased this currency at this price - and state this is not financial advice, can't I get away with it, without breaching the forum rules?

Nick


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## Smurf1976 (11 May 2014)

Given that forex is a zero sum game from the perspective of traders (actually a negative sum once you take spreads into account), if someone is making a profit then someone else must be losing money.


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## DJG (11 May 2014)

Do you plan on being on the other end of their trade or something? Taking a short on their long, and visa-versa?

I just seriously can't see the point in this thread. Nor do I believe anyone above me is understanding the theory behind it - besides learning of everybody else's mistakes which wouldn't you prefer to study your own mistakes?


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## NickF (11 May 2014)

DJG said:


> Do you plan on being on the other end of their trade or something? Taking a short on their long, and visa-versa?




That's correct. When somebody places a long, I would place a short, and see what happens.

I would study my own mistakes, but I don't make any mistakes... 

Nick


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## NickF (11 May 2014)

Smurf1976 said:


> Given that forex is a zero sum game from the perspective of traders (actually a negative sum once you take spreads into account), if someone is making a profit then someone else must be losing money.



I agree with that. So, why not pairing with somebody who loses money and do the opposite? 

Nick


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## DeepState (11 May 2014)

NickF said:


> If over 90% of the people lose money in the market (more than the spread), then clearly it should be a way to act the opposite way than the crowd and make a bit of money. It is true that spreads represent a significant portion of the loss, but somehow I believe there are many people losing much more than just the spread.
> 
> Nick




Menkhoff L,  Sarno L and Schmeling A, 2012, "The Cross-Section of Currency Order Flow", Working Paper

...examined tick level data and found that professional fund managers and currency trading hedge funds took money out of the market in aggregate. There are relatively few of these. The losers were Private Client and retail, and also the hedgers...in aggregate.  There are relatively many of these.  Hence a massive failure rate and the profit accrues to the few.

Basically, to win systematically in FX as a retail punter, you are going to have to emulate George Costanza and do the opposite of whatever you would have done...without second guessing it and losing faith in it.


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## NickF (11 May 2014)

DeepState said:


> Menkhoff L,  Sarno L and Schmeling A, 2012, "The Cross-Section of Currency Order Flow", Working Paper
> 
> ...examined tick level data and found that professional fund managers and currency trading hedge funds took money out of the market in aggregate. There are relatively few of these. The losers were Private Client and retail, and also the hedgers...in aggregate.  There are relatively many of these.  Hence a massive failure rate and the profit accrues to the few.
> 
> Basically, to win systematically in FX as a retail punter, you are going to have to emulate George Costanza and do the opposite of whatever you would have done...without second guessing it and losing faith in it.




Thanks for the info, RY. The document is quite good - I understand everything if I read it one word at a time, but it gets a bit confusing if I try to read one sentence at a time.

Seinfeld was my preferred show and George Constanza is my hero! Little wonder he is given as an example for the share market.

Nick


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## AussieMatt (12 May 2014)

Hey Nick,

Why don't you focus on what winning traders do instead of letting your mind focus on how to lose money?

Its really simple. demo something that sits well with your philosophy and personality, become consistently profitable on demo then risk real money. Or start really small and increase size as you become more confident.

If your serious it will take time, effort and dedication. if your not serious or willing to put in the effort and time to gain experience then that's fine as well, just understand that this will be an expensive hobby for you.

I understand what you are saying, its just not the best way to think about this in my opinion, I would not want a surgeon operating on me that spent 10 years studying what not to do, I would want someone who has spent the time to gain experience and confidence and has filled their head with productive knowledge that will get the desired result.


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## SuperGlue (12 May 2014)

NickF said:


> I agree with that. So, why not pairing with somebody who loses money and do the opposite?
> 
> Nick




Just for argument sake.

He/she sees NickF taking oppsite trades & making money, decides to flip and NickF err... err... flips too.


Another scenario:

After all this time & lots of lost fortunes.

You know what?
NickF has found the solution to my money losing trading system.
He's a smart cookie.

I'll just change my trading system the other way.

Guess what happens?


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## NickF (12 May 2014)

SuperGlue said:


> Just for argument sake.
> 
> He/she sees NickF taking oppsite trades & making money, decides to flip and NickF err... err... flips too.
> 
> ...




It would be nice if I could change my trading system from a losing one to a winning one at will. 
Why should I believe that you will be able to change your trading system the other way? 
I tried changing my system (for one day only) and I still lost money - and because I am a smart cookie, I concluded - it's not so easy to change the system. In my case, I don't even have a system, yet.

But I'll take your advice and I'll keep trying to fine tune my system and progressively lower my losses.

Nick


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## DJG (12 May 2014)

So it can accurately be assumed that a trader goes into a trade believing they will make money (otherwise they wouldn't of traded it in the first place).

So Trader A ends up making money and Trader B (you) loses money as you're on the opposite side of his trade. - You lose.

Visa-versa, he loses - you win.

So how do you expect to make money by taking the opposite side of someones trade besides in hindsight?

How do you or they know it'll result in a losing trade? Therefore allowing you to profit by being opposite.

You'd have as much luck as clicking buy at anytime during trading, or clicking sell. Essentially seems like the same logic. 

Am I missing something here?


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## Dean34 (27 June 2014)

NickF said:


> Hi All,
> 
> I am curious if there is anybody consistently losing some significant amount of money.
> I am not talking about losing the pips that represent the fee, I am talking about something significantly more.
> ...




Someone once said, if you back test a system and it produces a poor result, (i.e. negative), then do the opposite.


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## DeepState (27 June 2014)

NickF said:


> Hi All,
> 
> I am curious if there is anybody consistently losing some significant amount of money.
> I am not talking about losing the pips that represent the fee, I am talking about something significantly more.
> ...




The FX market turned over USD 5.3 tr per day in April 2013, the period of the triennial survey into this activity conducted by the BIS.  Anyone winning/losing consistently in this market is doing it in dollops.

The chart below shows you the 'factor' return for the 10 yr bond carry trade involving the six most significant pairs vs USD for the 10 year period to current day (excludes weekends):






It is going up.  Forget about day to day profitability in this market unless you are a market maker taking spread - well, you can try and who am I to stop you.  There are many other types of ideas besides this one, but this is a widely noted anomaly which I wanted to verify.  It exists. It is by no means the most profitable but is provided for illustration. 

Whoever is on the wrong side of this trade is losing by the bucket load.  These people are mostly those who finance in high interest rate environments for the purpose of investing (on an unhedged basis) or consuming offshore products and services.  These are the commercials.  Do the opposite of them Mr Costanza.  You can get this info if you work at it.

Hope all is good with you Nick.


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## William B (30 July 2014)

Losses are part of Forex and it is very common that most of the traders loose their money very quickly due to the lack of knowledge,skills and proper planning. So do not start trading if you have no skills and knowledge about Forex and look back and try to learn the basics of Forex to avoid losses.


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## Value Collector (30 July 2014)

I would find it hard to believe someone could lose on every trade, Even random chance should have them winning at least 50% of the time wouldn't it. Offcourse fees would put them in a net loss, but I mean picking consistent losers in a 50/50 game is just as hard as picking consistent winners.

So finding a guru loser to bet against is just as hard as finding a guru winner to bet with, at least that my impression.


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## Smurf1976 (30 July 2014)

Value Collector said:


> I would find it hard to believe someone could lose on every trade, Even random chance should have them winning at least 50% of the time wouldn't it.



For one individual to lose every single trade = fairly unlikely but not impossible.

But that someone loses on every trade = definitely. In order for someone to win, someone else _must_ lose since it's a negative sum game.

As for the 50% random chance, even that may be difficult to attain in practice. Eg simply failing to exit the trade at all, leaving it until stopped out, will give you well over a 50% loss rate if applied randomly.


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