Forex, worst trading market? Retail vs. Institutional

Discussion in 'Forex' started by Rearden Metal, Mar 4, 2010.

What's your net P/L from FOREX trading over the past 12 months?

  1. I don't trade forex at all, but thanks for giving me a box to check.

    14 vote(s)
    32.6%
  2. I trade forex retail (Oanda, IB, FXCM, MyBucketShop.com, etc) Up over $500K

    2 vote(s)
    4.7%
  3. Retail: Up $100K to $500K

    1 vote(s)
    2.3%
  4. Retail: Up $20K to $100K

    2 vote(s)
    4.7%
  5. Retail: Up less than $20K

    10 vote(s)
    23.3%
  6. Retail: Down less than $20K

    7 vote(s)
    16.3%
  7. Retail: Down over $20K

    2 vote(s)
    4.7%
  8. Institutional: Up over $500K

    3 vote(s)
    7.0%
  9. Institutional: Up $100K to $500K

    1 vote(s)
    2.3%
  10. Institutional: Up $20K to $100K

    0 vote(s)
    0.0%
  11. Institutional: Up under $20k

    1 vote(s)
    2.3%
  12. Institutional: Down under $20K

    0 vote(s)
    0.0%
  13. Institutional: Down more than $20K

    0 vote(s)
    0.0%
  1. Note that if you're not 100% sure whether you count as retail or institutional, that means you're retail.
     
  2. (In case you were wondering)

    <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2755258>
     
  3. RM, have you traded forex yourself? does your bias (stocks > forex) come from your first-hand experience or from what you have heard from others?
     
  4. what was the point here?
     
  5. "RM, have you traded forex yourself? does your bias (stocks > forex) come from your first-hand experience or from what you have heard from others?"

    "what was the point here?"

    ________

    Ok, valid questions... and I've never seriously traded any forex instruments- definitely not actively or professionally.

    So, have you guys ever heard <b>anyone</b> say <b>anything</b> like "I've made a good living trading fx for the past few years, at home in my bathrobe on my Oanda account"?
    Me neither.

    All you usually hear about is people <i>trying</i> to trade forex and getting screwed one way or another. I haven't really checked the ET P/L thread lately, but I can't ever recall seeing anyone posting forex blotters that looked even remotely encouraging. Guys making money there are always trading something else like stocks or futures.

    However, I recently heard about successful career <b>institutional</b> forex traders, so I needed to re-examine my long-held bias that forex is pretty much a useless rigged game.
     
  6. Pippi436

    Pippi436

    Just FYI, if you are looking for fx blotters search this forum for user 'cabletrader' - he frequently posted his own in here (oanda blotters none the less).

    On the other hand, cabletrader appears to to be MIA, so who knows what he (or his account) is up to now. :)

    Also, i somehow doubt the blotters of retail stock or futures traders look much more encouraging than those from fx traders, generally speaking. If this forums population is anything to go by, retardation appears to be equally spread out between the two groups.
     
  7. Nagelis

    Nagelis

    Traded FX all my life, still do, both institutional (100 % systematic, autotrading, multi currency pairs, swing trading, low leverage) and retail (50% systematic with discretionary overlay, high frequency, high leverage, scalping, focus on max 3-4 ccy pairs...).

    No question in my mind it is possible to make a steady income out of it, but most people have a completely wrong approach to FX: they overleverage, are too impatient, and wrongly focus far too much on home run directional trades (which inevitably leads to a blow up situation at some stage), whilst ignoring the many short term fluctuations which offer plenty of opportunity to take many smaller but high probablity trades.

    Nonetheless, your question makes a lot of sense as indeed, I've seen many people in FX being blown to pieces or giving back all their monthly gains in a matter of seconds, for the reasons explained above. Developing an FX edge takes hard work, plenty of learning money, patience, constantly reinventing yourself and an iron discipline. I spend about 18 hours / day screen time, so it is not an easy nicegoing life either, contrary to popular belief...
     
  8. Nagelis

    Nagelis

    And another few points:

    FX is totally dominated by very short term high frequency FX algo players which are only in the market for seconds to a few minutes maximum. Fully automated algo's or high volume manual scalpers. They are the ones that cause the moves and make consistent money with very little downside risk. If you know what they are doing, you stand a very good chance of making consistent daily returns in FX...

    This is also the reason why you won't read much FX posts or calls here (apart from the hourly or multiday time frame calls). By the time you have typed out what you are doing, chances are that price has moved already 10-20 pips and you should already be out of the trade and be looking for the next opportunity.

    Next to that, for daily scalping in 1-2 pairs, you need to keep a continuous eye on the overal FX landscape: say if you scalp in gbp/usd, you need to have a very good overview of what happens in all GBP crosses, you need to know what the overall dollar sentiment is and how and to what degree that affects all majors etc. Very few fx starters do that. FX looks easy, but it takes hard work, as I said before.
     
  9. Excellent points, and well-written.
    However, there would seem to be very few people who actively trade fx that post on this site.
    I'm not sure what happened, but the quality has dropped considerably from a couple years ago. Pity.
     
  10. Currencies don't move that fast, and they tend to trend . . . So they really should be good trading vehicles. I suspect the leverage is the problem . . . Is it true that some brokers will take the other side of client trades, simply assuming that the stop will be hit?
     
    #10     Mar 7, 2010