Anyone in the forex market/currency speculation?

[amadeus]

Is anyone here into the forex market/currency speculation? For those unfamiliar with the term, the forex (foreign exchange) market is where currency is traded.

One of these days, I'd like to get a little money into it and see if I can generate a profit, so I'd like to hear some details from people that have had experience in this market.

 

[Xanikk999]

Not me.

(Bumping it for you, ive never seen a thread in off-topic reach the bottom page without any replies. )

 

[AL_DA_GREAT]

No I prefer the stockmarket although I know how this stuff works. A good way to make even more money would be to buy foriegn investments instead of just having money in the bank.

 

[Godwynn]

I stick with regular common share stock investments. I know only few details about Forex. I've been cruising Forex forums lately, it seems if you know what you are doing you can make a killing, if you are a novice, beware.

 

[AL_DA_GREAT]

Baisically, if you believe in a raw material buy the currency of a country that has it. If you believe in a country, buy its currency. Also look at the intrest rates. I still say funds that invest in other countries are a better option.

 

[Perfection]

it seems if you know what you are doing you can make a killing

More like, "if you're lucky as hell".

The forex speculation road to riches is basicly this:
1. Pick some random currencies and dump some monet in them
2. Get lucky as hell when one gives you back a lot of money
3. With the profits sell cassette tapes telling about the dumb methedology you used to pick your currencies
4. Coast off that

 

[Godwynn]

More like, "if you're lucky as hell".

The forex speculation road to riches is basicly this:
1. Pick some random currencies and dump some monet in them
2. Get lucky as hell when one gives you back a lot of money
3. With the profits sell cassette tapes telling about the dumb methedology you used to pick your currencies
4. Coast off that

Well, yeah. That's probably why I don't understand it, and will never try it.

 

[Perfection]

Well, yeah. That's probably why I don't understand it, and will never try it.

I'm willing to bet that those who made a killing off of it didn't make a killing either.

 

[Godwynn]

I'm willing to bet that those who made a killing off of it didn't make a killing either.

Like anything read on the internet, it must be taken with a certain amount of a salt. But back on topic: I wouldn't mess with Forex. I'm sticking with the regular DJIA, S&P 500, NYSE.

 

[JerichoHill]

no, its very tought to make money in currency markets

you need to know what youre doing, like alot of education, arbitrage is very difficult to beat.

 

[amadeus]

More like, "if you're lucky as hell".

The forex speculation road to riches is basicly this:
1. Pick some random currencies and dump some monet in them
2. Get lucky as hell when one gives you back a lot of money
3. With the profits sell cassette tapes telling about the dumb methedology you used to pick your currencies
4. Coast off that

That's the sort of Don Lapre thing. I don't understand his deal; if he can make so much money by placing tiny ads in newspapers, why doesn't he just do that? The answer is obviously because he's a shyster.

no, its very tought to make money in currency markets

you need to know what youre doing, like alot of education, arbitrage is very difficult to beat.

It seems like you need a lot of education to earn any money these days, so I'm not terribly surprised.

 

[JollyRoger]

Unless you have a very successful track record of experience in "easier" markets, I would stay away from currency trading. If you haven't paid your dues with experience elsewhere, you would likely get wiped out when speculating in the currency markets. Those that make a killing do it at the expense of those that think they can make a killing.

 

[amadeus]

I don't have any money to invest, so this is just a hypothetical discussion.

 

[Whomp]

It's a tough game and a zero sum game to boot. I would suggest investing before speculating.

Speculators contend with hedgers, arbitragers and scalpers. The leverage (margin) that's available can be a crusher since in some markets you can control 30x you're actual $ investment. Some of the biggest players absolutely got annihilated last year when the dollar reversed course (IE Warren Buffet $955 million loss). Most successful traders are trend followers and recognize that risk management and volatility are the keys to their success. IE Campbell and Co. in Baltimore is one of the largest CTA's and expects to lose on 60% of their trades however they are willing to lose 1% of those 60% but gain 2% on their successful 40%.

Bloomberg article on forex traders 2006 pummeling

Please participate because I think we all have a lot to learn on this topic and I think this will help.
http://forums.civfanatics.com/showthread.php?t=207924

 

[History_Buff]

Well, I don't know too much on Economics, but foreign exchange markets are probably the second most confusing thing out there (the first being consumer theory).

 

[Atropos]

Is anyone here into the forex market/currency speculation? For those unfamiliar with the term, the forex (foreign exchange) market is where currency is traded.

One of these days, I'd like to get a little money into it and see if I can generate a profit, so I'd like to hear some details from people that have had experience in this market.

I don't myself, but I know people who do.

Forex is very hard to do with "a little" money, because of the premiums banks charge. At the level of a few thousand dollars, any profit you see will be wiped out many times over by fees.

It isn't pure luck though, either, as some posters have suggested. The massive decline in the dollar over the past few years, for example, was widely predicted - anytime that you have a currency with a massive public sector deficit and negative trade balance, it WILL fall over the long run.

The real problem lies in predicting trends over the short term. The US still does have a massive public sector deficit and hideous trade balance, so the dollar should fall in the long run - but in the short run things like interest rate hikes (which tend to encourage foreign investment and thus bolster a currency) can easily override that.

 

[Whomp]

It isn't pure luck though, either, as some posters have suggested. The massive decline in the dollar over the past few years, for example, was widely predicted - anytime that you have a currency with a massive public sector deficit and negative trade balance, it WILL fall over the long run.

The real problem lies in predicting trends over the short term. The US still does have a massive public sector deficit and hideous trade balance, so the dollar should fall in the long run - but in the short run things like interest rate hikes (which tend to encourage foreign investment and thus bolster a currency) can easily override that.

Aha it should but as a contrarian when everyone thinks something will happen then I'm inclined to run the other way.

I'd suggest that the big surprise could be the significant reduction in the deficit. I think people have underestimated the impact of AMT on future tax revenues.

With that said, most sucessful traders don't care about the fundamental factors. Volatility, risk management and a trend is all they're looking for.

 

[El_Machinae]

Firstly, most of my currency play would be between CDN and USD - if only because I'm familiar with those economies and currencies. I thought about playing the currency market post 9/11, but the issue around gold spooked me too much.

I'm a much bigger fan of purchasing income investments.

 

[Whomp]

What's interesting is the dollar index is its been consistent negatively correlated to the dollar. The questions is whether gold will decouple at some point because of pure demand.

 

[CIVPhilzilla]

I'll stick with Stock and Mutual funds, there are way too many variables in the currency markets and one wrong move and your money is vaporized. If you do decide to tread into this ground make sure you do your homework and read up on currency trading as much as possible, and only invest with money you can live without. Stocks and mutual funds are much more reliable in my opinion and thus where my money is going.