Do you know anyone who make money out of Forex?

Posted By Scott Philips On Wednesday, December 21st, 2016 With 0 Comments

Yes I do. Trading FX is a serious profession and if you treat it seriously you can make money from it. It takes about as much training, effort and knowledge as any profession.

FX is not a get rich quick scheme, if I knew how hard it was I never would have started

Are there reputable, experienced traders that will share their daily forex trades? Do people sell this as a service?

No. Categorically NO.

There is something about the FX business which attracts beginners like flies to shit. There is an entire industry, just like in the gold rush, of people selling the digital equivalent of picks and shovels. These guys are system sellers and signal sellers, not traders. Not ONE of these guys, anywhere in the world, will provide their own audited trade records.

Providing audited trade records is the absolute minimum standard for anyone willing to hold themselves out as a trader.

None of these guys have made any money themselves.

None of these guys are capable of making you any money.

Professionals don’t sell systems. Professionals don’t buy systems.

For a trading system to work, it has to be a very close fit with your market beliefs and goals. It is unlikely in the extreme you could trade anybody else’s system correctly. Trading is a serious business which takes years to learn. You cannot just copy and paste your way in off other people’s ideas. It just doesn’t work, and is dishonest at a fundamental level to suggest this is possible.

I absolutely challenge anybody to post their trade statements making money off other people’s signals.

Imagine you had never played golf. A decent weekend golfer could fool you quite easily into thinking he was great. How well do you think he would do in the PGA? Do you really think that after attending a weekend “golf tips” seminar with him or an online course you will win the PGA either?

Is forex trading better than stock trading?

What is better? Trading is a huge field, its like saying “sports”.

Is rugby better than ice hockey?

It depends on the hours you want to keep, your personality, your investment goals and your particular market edges (some methods don’t work on stocks and some don’t on FX).

A good trader should be able to make a living in either.

Can I build an algorithm trading based on a trend strategy and use it to trade forex for ten years for example?

Why yes, of course you can. Standard trend following strategies are rather simple, and all very similar and for a good discussion and overview I suggest you follow Andreas Clenow and buy his book, which has a simple strategy which is really very close to “good enough”. Also Katy Kaminski’s book is very good and more detailed Trend Following with Managed Futures: The Search for Crisis Alpha (Wiley Trading) (9781118890974): Alex Greyserman, Kathryn Kaminski: Books

Bottom line is that trend following strategies buy what is going up and sell what is going down. Most of the time there are not that many ways to do that, so no matter how you do it, you will be long the same things and short the same things.

The problem with trend following is not the ruleset (you wouldn’t need to fully automate it in my experience, my own trend following strategy cost $200 to automate the signal only without execution, I just advertised the ruleset on elance and someone did it in a day) but diversification, correlation and volatility adjustment.

Most currencies are correlated more than you would like for proper trend following. Some years the US Dollar will trend and you will smash it out of the park, some years it will not and you will lose lose lose. In those years you want to be trading Gold, Oil, Soybeans, Bonds, enough things that somewhere you have a trend. Trend following strategies work on a low win rate with rare outlier wins, so you need to trade a LOT of markets to make it work.

You should become familiar with programming and do legitimate (not hobby level) backtesting.

The meat of professional trend following (the backbone of the $300 billion CTA industry) is rather boring and banal compared to what you think it is.

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