CL - average daily price change over $20 days(ATR 20) is $1,200. It will cost you approx $12.50 to get into the trade ($10 tick, commission, exchange fee) EUR/USD - to match the price range of CL you will need a Fx position size of 120,000 which is a $12 PIP. Oanda average spread EUR/USD is 1.6 in real trade fills. Your cost to get into the trade would be $19.20 ($12 PIP x1.6 spread = $19.20). The cost to enter a comparable EUR/USD trade to CL will cost you 65% more. The futures Fx EUR/USD costs $8.70 on average to enter - a comparable Fx position will cost you just under $19. I trade some Fx myself -the general theme is that the more leverage you get, the more you pay in trading costs. Futures gives you more bang for the buck.
I believe and would argue, that the forex market is "harder" in the sense that overall the market volatility is amplified much higher than other markets such as say, stocks. I argue that stock trends are easier to follow and hold. With forex there is a much lower barrier to entry, but this small amount of capital can easily be blown out with bad risk management(i.e. you are somewhat pigeonholed into a certain style of trading). If you understand that there will be significant higher market volatility with forex, then I believe you can become successful.
I somehow have a gut feel that retail FX traders often lose due to the lack of relevant skills and knowledge... As mentioned, due to the very low barrier of entry and very high leverage available, coupled with poor risk management and poor knowledge of the fundamental drivers behind currencies... And IMO the rampant obsession over short-term strategies (Day trading/swing trading, which racks up transaction costs). IMO the abovementioned factors are the main contributors to high failure rates in retail FX traders. Of course its not to say that traders of other asset classes do not have such problems, but I do feel that it is more rampant in FX due to the low barrier of entry.
Do you actually know any "institutional traders"? If you did, you'd soon be disabused of the idea they're "smart money."
The majority of forex trades win, however the number of pips lost per trade far exceeds those won ( I found this on another forum, so probably not cool for me to post a link to it). That suggests to me that traders may be doing the following; 1) Taking their profits too early, too often 2) Letting losses worsen, rather than stopping trades at a predefined point (Stop loss)
Dead right Carlos. I'm going to suggest the corollary of your points is that traders should abandon fixed profit targets, and add to winners.