Most are of the opinion it is a zero sum game.

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newone1
35
newone1  

Most are of the opinion it is a zero sum game.

TRADING IS GAMBLING , YOU BET RED OR BLACK ALL DAY , YOU DO NOT KNOW THE OUTCOME .YOU ARE GAMBLING.

A trader has to find greater fools every day , during his trading activities, to pay him more than what he paid for the currencies or instrument.These other traders paying him more money are bank traders and professional traders , who are much smarter than the day trader.

The trader has to predict the direction to make money , he can't predict his own fate.

Who pays the trader for his profit? How many fools are there greater than the trader?

After costs , it may be safe to say , trading fx is a negative sum game.Those who do not agree ,please post audited reports of day trading financial results for last 10 years.Justify your argument with evidence.

Isabella8688
3
Isabella8688  

Thanks you for the post.

Paul75
1319
Paul75  
newone1:
Those who do not agree ,please post audited reports of day trading financial results for last 10 years.Justify your argument with evidence.

It is not easy for any trader to collect audited reports of day trading financial results for last 10 years. If you are familiar with such any source from where we can get data of last 10 years then please share here.

Mrluck07
426
Mrluck07  

I don't understand why people say that forex is a zero sum game

you have 2 countries for example:

  A                        B

1000 unitsA         1000 unitsB                 both countries have total of 1000 units of money

  1  <--------------->1                             both countries have their coins at the same value , 1

If in the future, country B produces less, and his coin is devaluated:

  A                        B

1000 unitsA         1000 unitsB                 both countries have total of 1000 units of money

  2 <--------------->0.5                          country A coin has doubled the value compared to country B


If country A buys all the 1000 coin units of B, he would spend 500 unitsA. so in the end they would have

  A                                                         B

500 unitsA                                   500 unitsA        

+1000 unitsB


So if it really is a zero sum game, B should not remain with any coin, is that right? In cassino, lottery, bingo, the losers remain with nothing. But on forex, is different all parts will always remain with something, so why it's a zero sum game?

Marco vd Heijden
Moderator
8166
Marco vd Heijden  
Mrluck07:

I don't understand why people say that forex is a zero sum game

It's not a zero sum game.

It's a negative sum game.

This is due to commissions spreads and the costs of doing business.

This is why any position you take on starts out with a negative profit.

It should be obvious.

Look up the definitions.

Here is an excerpt from Britannica:

In contrast to the positive-sum game are the zero-sum game and the negative-sum game. The term zero-sum game refers to situations in which the total of wins and losses adds up to zero, and thus one party benefits at the direct expense of another. The term negative-sum game describes situations in which the total of gains and losses is less than zero, and the only way for one party to maintain the status quo is to take something from another party. It is in the context of negative-sum games that the most serious competition tends to occur.

Waseem Raza
9997
Waseem Raza  
newone1:

Most are of the opinion it is a zero sum game.

TRADING IS GAMBLING , YOU BET RED OR BLACK ALL DAY , YOU DO NOT KNOW THE OUTCOME .YOU ARE GAMBLING.

A trader has to find greater fools every day , during his trading activities, to pay him more than what he paid for the currencies or instrument.These other traders paying him more money are bank traders and professional traders , who are much smarter than the day trader.

The trader has to predict the direction to make money , he can't predict his own fate.

Who pays the trader for his profit? How many fools are there greater than the trader?

After costs , it may be safe to say , trading fx is a negative sum game.Those who do not agree ,please post audited reports of day trading financial results for last 10 years.Justify your argument with evidence.

First of all wash from your mind day trading or day trader, a trader can't control price movement. Sometimes happens good entry goes in wrong way so better duration can be different from day to month. Long trades holding means when using good MM or lowest risk. Mostly Weekly charts helps in better gain. 

Icham Aidibe
11288
Icham Aidibe  

I wonder why some people wants it to be gambling, there are numberous, likely if they're looking for a way to explain their fail by an inborn-misfortune or their success just by being born below the right star.

Let's put aside all the indicators, and price predictors to avoid a useless debate.

There's a method called hedging on which I worked few months ago, I've put it aside being bored of coding, but conclusions are obvious : using that method, you could, regarding your margin, exit each time with a profit. You understand, based on LOGIC, on MATHEMATICS, it's possible to transform each deal into a profitable one. I of course took care to use only & always random entries.  

I still have the signal history I did let on my account for further analysis as I delayed the dev of that EA : 

  • Right part of the image, settings changed, reduced, don't mind, it's the same phenomenon at a lower scale
  • Left part of the image : each loss is due to the exact same issue, margin limited && no more hedging orders. It's not called "luck", it's called "lack", lack in the algo which require a mathematical gymnastic more to be corrected - point. 
Where's the gambling ?


With indicators, it's not much different, the most basic usage of a moving average produces more profitable entries than random entries would do.

I invite you to test by yourself on 10 years if you wish to, here's a code snippet to enter randomly the market : 

int SignalType=(MathRand()%2==1)?1:-1;
if (SignalType==1) { Buy();} else if (SignalType == -1) { Sell(); }

 No dude sorry, forex isn't about gambling, you're gambling yourself, others are working, please to respect their intelligence.

Amir Yacoby
1219
Amir Yacoby  
Mrluck07:

I don't understand why people say that forex is a zero sum game

you have 2 countries for example:

  A                        B

1000 unitsA         1000 unitsB                 both countries have total of 1000 units of money

  1  <--------------->1                             both countries have their coins at the same value , 1

If in the future, country B produces less, and his coin is devaluated:

  A                        B

1000 unitsA         1000 unitsB                 both countries have total of 1000 units of money

  2 <--------------->0.5                          country A coin has doubled the value compared to country B


If country A buys all the 1000 coin units of B, he would spend 500 unitsA. so in the end they would have

  A                                                         B

500 unitsA                                   500 unitsA        

+1000 unitsB


So if it really is a zero sum game, B should not remain with any coin, is that right? In cassino, lottery, bingo, the losers remain with nothing. But on forex, is different all parts will always remain with something, so why it's a zero sum game?

Its not a zero sum game fot the countries but it is for the participants of the forex game.
Exactly the same way that casino isnt zero sum for the tax authorities but only for the gamblers.
Amir Yacoby
1219
Amir Yacoby  
Icham Aidibe:

I wonder why some people wants it to be gambling, there are numberous, likely if they're looking for a way to explain their fail by an inborn-misfortune or their success just by being born below the right star.

Let's put aside all the indicators, and price predictors to avoid a useless debate.

There's a method called hedging on which I worked few months ago, I've put it aside being bored of coding, but conclusions are obvious : using that method, you could, regarding your margin, exit each time with a profit. You understand, based on LOGIC, on MATHEMATICS, it's possible to transform each deal into a profitable one. I of course took care to use only & always random entries.  

I still have the signal history I did let on my account for further analysis as I delayed the dev of that EA : 

  • Right part of the image, settings changed, reduced, don't mind, it's the same phenomenon at a lower scale
  • Left part of the image : each loss is due to the exact same issue, margin limited && no more hedging orders. It's not called "luck", it's called "lack", lack in the algo which require a mathematical gymnastic more to be corrected - point. 
Where's the gambling ?


With indicators, it's not much different, the most basic usage of a moving average produces more profitable entries than random entries would do.

I invite you to test by yourself on 10 years if you wish to, here's a code snippet to enter randomly the market : 

 No dude sorry, forex isn't about gambling, you're gambling yourself, others are working, please to respect their intelligence.

If the funds are over and there are no more hedge orders then it was a gambling based strategy, like if I was to show a nice martingale equity that fails at the end because I couldn't double any longer. It is still a gambling strategy, whatever increases the risk of each successive trade without control is gambling

Mrluck07
426
Mrluck07  
Marco vd Heijden:

It's not a zero sum game.

It's a negative sum game.


In contrast to the positive-sum game are the zero-sum game and the negative-sum game. The term zero-sum game refers to situations in which the total of wins and losses adds up to zero, and thus one party benefits at the direct expense of another. The term negative-sum game describes situations in which the total of gains and losses is less than zero, and the only way for one party to maintain the status quo is to take something from another party. It is in the context of negative-sum games that the most serious competition tends to occur.

thanks for explaining, i think you are right

Amir Yacoby:
Its not a zero sum game fot the countries but it is for the participants of the forex game.
Exactly the same way that casino isnt zero sum for the tax authorities but only for the gamblers.

i think it's a negative sum game, wars for example are negative sum games. But all examples of zero sum games, they break inertia. Inertia= if an object is moving it will continue moving if no resistance is found.

cassino- breaks inertia when the wheel stops, in the markets there is no time when they stop the game.

Amir Yacoby
1219
Amir Yacoby  
Mrluck07:

thanks for explaining, i think you are right

i think it's a negative sum game, wars for example are negative sum games. But all examples of zero sum games, they break inertia. Inertia= if an object is moving it will continue moving if no resistance is found.

cassino- breaks inertia when the wheel stops, in the markets there is no time when they stop the game.

Of course its negative sum game, I just not find special reason to deal with these questions too much. It does not help in anyway to be successful or make money.
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