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Forex trading - how can you lose?

Discussion in 'BlackHat Lounge' started by zmoker, Apr 1, 2009.

  1. zmoker

    zmoker Junior Member

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    Ok, before I start talking about forex you have to know that I know nothing about this kind of business. I'm just trying to learn.

    First of all I'd like to know which are the bests sites of forex? Not affiliate sites but forex sites in which you can buy or sell currencies.

    Secondly, they say that you can get rich with forex or you can lose a lot of money.

    How can you lose money by trading currencies?
    I know that currencies keep changing everyday, sometimes they go up and sometimes down.

    Here's a scenario:

    "Lets say you buy dollars with euro (1 euro is curently equivalent to $1.31800)
    The dollars value decreases and you lose money.
    you wait for the value of the dollar to rise up again"

    That means that you would've gained money right?

    That's why I can't understand how you can lose money, if the value of a certain currency decreases you just wait for it to go up again right?

    Correct me if I'm wrong, like I said I don't know anything about this business I'm just saying my thoughts
     
    • Thanks Thanks x 1
  2. bizcredit

    bizcredit Power Member

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    Well what if you have to wait 20 years for it to go up again to a price that will break even?
     
  3. spankythepyro

    spankythepyro Power Member

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    go here

    www.babypips.com, babypips school will teach you all you need to know. However I would focus on these terms

    BID/ASK, Spread, Margin, Margin call, % margin, leverage

    then move on to understanding technical and fundamental analysis

    BTW: this is not easy money by any means
     
  4. djedje70

    djedje70 Regular Member

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    none of ur fr#$%ing biz dude!!!
    Browse through my older threads. I shared some books on the subject.
     
  5. misterajc

    misterajc Registered Member

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    The mathematical term for a random movement of one variable (like an exchange rate) is "drunkard's walk". Mathematically there is a significant probability that the exchange rate will never go back to the value it started out at. In 1940 the UK pound was worth four dollars. It's never been back there since.
     
  6. zmoker

    zmoker Junior Member

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    Well that would be a pain in the ass :/

    But I doubt that a currency will take 20 years to go up again. As I said I'm not an expert in this sector but I took a look at live rates of currencies for some time and I noticed that they keep going up and down a little bit...

    I think that if you make a little research you can earn some good money and losses won't be that big in my opinion, I mean the money will still be there right...?

    Anyway I could be wrong I don't know, the only way to find out is to try yourself :)

    I'm currently looking for a good forex site which has been up and running for some time ad has good reputation so that I can give it a try

    Thanks
     
  7. azibi

    azibi Newbie

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    I just discovered a free signal service http://www.completetraders.blogspot.com
    It seems to be pretty okay and at least its for free while most sig services cost
    about $100 to $300 monthly. Perhaps you may learn something there although it isn't really a teaching site.
    Just thought to share this.
     
  8. heiny

    heiny Regular Member

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    The recession proved a lot of things of having your business in one currency. Ask the australians who borrowed in YEN. Read up on that and you should know why Forex is hugely based on the "emotions" of the economy. It's like predicting that the stock of Apple is going to shoot up because of the Iphone 3G S release.....you would think that, but it's not as simple :)

    i don't play with forex/speculations of $$$ ---- rather I'd be investing my time on other things
     
  9. charles89

    charles89 Newbie

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    Did you guys and girls know that forex brokers are tightening their rules? Hedging is not allowed anymore in ibfx.com, where it used to be allowed, so if you decide to long, you can't short in the same account.

    This is yet another tricky of brokers around the globe... so beware to enter forex market, study the rules carefully... some do not provide overnight swap anymore, there used to be a forex broker like to play swap, no swap is prohibited by few brokers.

    The ups and downs, study the time frame and the currency pairs behaviours, what is the daily range, stay out of the news if you are a forex novice, first thing first - before you enter any market.

    Money management and your discipline could be the most crucial part of your trading business! Consider trading as a business, not a money game or gambling, or else, prepare to zero sum your account.


    :D
     
  10. azibi

    azibi Newbie

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    What is this "hedging" about in the first place: going long and short in the same account? That's absolutely insane, calling squaring up "hedging"!
    Further I was informed that as per July 31st there will be new rules in the USA only. It won't be allowed anymore to place stop losses and take profits with your online brokers. I recommend everyUS account holder to open one in Europe where such idiotery is still unheard of.
    It seems like the US administration would love to abolish Forex trading in due course. Whats going on? It weren't forex traders that caused the current economical disaster?:)
     
  11. BenQs

    BenQs Regular Member

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    Someone suggested babypips to you. You should definitely start there. And you asked about "sites to trade"? You need a spot broker -- like IBFX or FXSOL or any of the other hundreds out there. But the NFA is tightening rules -- no more hedging, and first in/first out coming. Lots of traders are leaving US brokers and going to the UK counterparts where NFA has no control. And don't assume you can just buy and wait it out. You have lot size and margin levels to consider, etc. Learn the basics first, open a demo account and practice.
     
  12. sixsense

    sixsense Newbie

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    For beginer I suggest babypips.com and my blog to learn forex market, learn-forex-market.com
     
  13. nimbus49

    nimbus49 Elite Member

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    I used to be a professional commodities trader....many of the trades were with foreign currencies. I would say, don't even consider it, unless you like anxiety attacks, and massive amounts of booze and tranquilizers!!

    Stick with CPA, affiliate programs, EPN and all the others! You will be much happier!!
     
  14. shyntaxx

    shyntaxx Registered Member

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    ok .. and so how about a service like that ... another noob question .. >>

    Code:
    hXXp://www.forexautomoney.com
     
  15. wantsuccess

    wantsuccess Registered Member

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    FOREX- not for the common man...the most money in any niche is made by the person selling the info on the niche not persons involved in the niche...

    ex: the only people making big buck in the forex niche arepeople selling courses or seminars 1-1 coaching etc...and the big investors who invest as a profession (wall street)

    same in the IM niche the people selling you push button softwares ,seo, traffic, product creation etc make all thier money from selling the info not from the actual niche itself...they don't use the stuff they sell.or very seldom you find a marketer whose actually actively using the methods he teaches...

    the monies in the info...

    thanx and i have an affiliate site that pays $1000 per sale...anybody wants it it's free but only if you go through my link...it's being sold for $27 elsewhere...include complete marketing strategy with a new twist enabling you to have little to no competition
     
  16. aReJay

    aReJay Power Member

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    I have a degree in derivative finance. Not really something that interested me long term. But basically its all about trading on margin (play your cards right you can play with up to 25x your capital). Couple of years ago as a 20 year old and when money was real cheap I had an unrestricted unsecured $500K margin account with my bank. Then the US went and screwed everything up.

    If your just looking to trade on other peoples picks and reco's your likely 2 hours behind the market and destined to bust out. If your going to play Forex and want decent returns you need to be onto it for the entire market session, these days that's equivalent to about 18 hours/day (NY/JP/SYD/UK).

    If your looking to play the market and want to get into derivatives your much safer with commodities than currencies but probably best off starting with blue chip options.

    -aReJay