Most forex retail traders lose money. Why is forex so difficult?

Agreed. I wish more people would understand this. Forex trading requires an exceptional level of dedication and concentration. It is not something that comes to everyone. You have to have a brain that understands market behavior/psychology very meticulously in order to be successful here. Just saying trading is easy won’t make it any easier. In fact it could be misleading for some.

 

But if this were true then the the existence of trends within Forex would not be true.

ES

 

There isn't any support to show that the existence of tradable trends is true. In fact all research that uses rigorous statistical analysis points to forex clearly being weak form efficient, far more so than stocks.

 

So USD/JPY is not in a tradable uptrend?

Of course, it depends how you define "trend" and "tradable" so it could be under your parameters, you are correct. But then it might just be the parameters that are wrong?

 

This is a good question. Anybody?

ES

 

The problem is approached differently from a statistics perspective which essentially is looking to see if past prices have any predictive effect for future prices. Even stocks are generally weak form efficient, but forex more clearly so.
Of course you or I will find trends and ride them. We'll just also find what we thought were trends but weren't and ride them with equal frequency. Over the universe of thousands of forex traders, statistically there will be some who, looking back, have consistently picked the former more than the latter. Those folks will undoubtedly be here shortly proclaiming their skill and my shortcoming as a trader and human. The one's who weren't successful won't be here, they're not on ET anymore and/or aren't going to be shouting out their failures. A combination of survivor bias and apophenia.

 

I am surprised that you have not brought in Chaos theory to support if Forex has any trends that can be traded profitably. Also, I do not believe Random Walk theory (these are only a theories) can be applied here due to ease of movement when trends present themselves..eventhough traders do not trade them. You have not persuaded me.

ES

 

Gravity is "only a theory", but it does a pretty good job of explaining a lot of things from spaceflight to my walk to the coffee maker this morning!

 

Ok no takers? I will tell you why...The dishonest dealers in an unregulated environment without a central quote feed! They hold the purse strings to your account together with the outcome of your trade...what do you expect?

Es

 

Agree with you if trading was so easy then everyone would have become millionaire.