Does forex trading really work?
Hello everyone,
I see people on instagram bragging about how trading is turning their lives around basically acting as finance gurus teaching you how you should live your life.
Most of them don't have an economic or quantitative background (not that is strictly necessary) and can't even understand what trading actually is. I don't have much knowledge about the topic but I guess they use what people refer to as technical analysis and that's it.
Is there an expert that can articulate in detail why what these people do doesn't work, that is not so simple to do trading and that to actually do trading you should have some knowledge about markets and the main drivers?
Or maybe I am completely wrong and would appreciate a different opinion on this.
Thanks!
It’s not that “forex” does (see: Soros) or does not work, it’s that the people you see on Instagram touting this stuff are simply scammers, nothing more. They do not trade, either successfully or unsuccessfully; rather, they convince people who don’t know any better to buy their “how to be rich with no work” courses. Doesn’t have anything to do with the actual strategy
But I think Soros didn't just look at the graph line of the day before and the shape it had, rather he must have performed a deeper analysis right?
Maybe my question should have been more about technical vs fundamental analysis because technical analysis is something everybody on instagram think they can do whereas fundamental analysis must first be studied. Which one do you all think it's better and why?
Think about what you are asking. You are essentially saying, is there some easy way to beat markets that doesn’t require expertise? And more importantly, can I get that expertise on Instagram or LinkedIn, etc? Before you even go into technical vs fundamental, first think about who would be motivated to sell winning formulas through social media. Someone with a winning strategy? No. Someone who can make it look like the strategy works but doesn’t have to risk any of their money going forward but has a guaranteed profit from you buying their “system”? Yes.
Then you can get into technical vs fundamental. And your comment that one requires deep studies (fundamental) and the other is just drawing lines on a chart is confusing (as with either you can study a lot or not). Fundamental can also be very lazy and poorly studied as can technical. Technical can also be very in depth (if you start thinking about quant, it is a very loose version of technical, very loose, but still requires a lot of the math and inferring info from the price and data). Anyway, there isn’t a get rich quick scheme here, all of this is hard. You have to figure out which strategy you believe in the most (or some blend) and put in the work to truly understand it.
I dont have that much information on this but I assume that institutions that trade currency have an obvious edge over a retail trader.
Of course, any person arguing that information is symmetrically distributed among all traders is simply wrong. Organizations (particularly larger ones) have access to data others simply do not have the means to acquire/understand. Trading is all about interpretation/access to data and then knowing how to execute on data translated into information (actionable insights). Unless you're willing to spend thousands of hours/cash to get access to info feeds/programming to analyze the data, you will never have an effective strategy that competes against larger institutions with armies of programmers, mathematicians, methodologies developed/tried over years, etc. It's just naïve to even believe that. It's not to say you can't find a method that works with what you need, you're just at a severe disadvantage and most people simply don't have the mental capacity/fortitude to develop and sort of consistent framework.
Every rich person I know spends their entire waking moment trying to help easily scammable schmucks make money by sharing their super secret but effective forex strategy.
Ahahah would give +10 sb to this
You should learn the basics of technical analysis yourself. It is difficult, but worth it.
The way you choose to trade the forex market will decide you will make a profit or a loss.
don't listen to these people..go for it
No, you cannot make millions trading with a system you bought on Instagram. You can make lots of money trading FX, but in order to do so, you must understand the nature of exchange rates, why they move, and how they move to even sit at the table. Once you know the rules of the game, you can compare your expectations (hopefully driven by insight and research) against the consensus to see if there is a trade to be made. Overtime, your ability to identify and evaluate those differences in expectations will help you develop a strategy to generate above average returns. It will probably take you 10k hours. Good luck.
It would be nice if self control were the big issue, while that is it for some people, I can tell you being right is a lot harder. Creating “alpha” isn’t easy, that is the main problem.
Fx trading is pretty much a waste of time.
you can make money but your sharpe is going to be like .4
macro guys at funds trade it when there’s a clear trend, but most of the intraday moves are flow driven and random. The signal to noise ratio is just too low to trade when there are better assets out there
Yes, but in a sense modern day FX gurus making money off customers by selling expensive courses. Not because they're competent traders.
There are FX funds/prop shops around that trade volatility on these markets, getting into those firms as a junior trader should be your goal, don't fall for get rich quick scheme on Instagram.
Please advise me a good trading broker, otherwise I don't trust many people on the Internet.
Of course it works and there is an opportunity to start it almost for everyone. Newbies, who do not want to risk with much money at start, may choose one of the Forex brokers with low deposit. You can also try it with demo accounts. If you believe in yourself, it works!
So any Forex brokers, you guys' think is legit?
Forex trading can definitely work, but it's important to approach it with the right mindset and knowledge.
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