FOREX and ECONOMETRY. Theory, practice, forecasts and implications - page 14
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Well, you are saying that the volume of buying equals the volume of selling, aren't you?
So there is no way we can buy or sell at the same time.
One bought, the other sold. Show me in numbers - who bought at what price, who sold at what price, and how is it possible for both to be in profit at the same point in time?
OK, well, pure mathematics. For simplicity's sake - let the asset grow all the time. I sell to you - you are in profit. You sell to me (already in profit) - after a while I sell to you, also in profit. etc.
With a large number of people, where and how the asset moves is no longer important, provided that everyone is working correctly. Another question is that the latter is not fulfilled)).
My strategy is very simple - to take a bite out of a high TF and get away in time.)
It reminds me of the anecdote about two cowboys eating free shit.
Yes, yes, I remember. And completely free of charge. But imagine that its value is constantly increasing))). And with a large number of participants, even this is no longer important, as small losses (when played correctly) compensate with subsequent gains. There are already laws of large numbers. Once again - this is an ideal, of course not coinciding with reality.
In reality all, of course, somewhat more complicated, but in 2 words can not set forth. But I have already laid out the principles.
You are mistaken. My loss will equal your gain and nothing else.
Again, for two, there was a condition of constant asset growth.
With a large number of people, things change.
Recall the classic problem of a hotel with an infinite number of rooms. All the rooms are occupied. How do you accommodate another client?
From #1 move to #2, From #2 move to #3, etc. In the end, everyone is accommodated.
For an infinite number of people to switch from growth to decline is no problem - everyone is in profit again. The money is taken from the rise-fall value of the asset. I emphasise again - theoretically.
All the places are occupied, so this is not possible:
From No.1 we move to No.2
I have my own head on my shoulders actually, which is capable of determining the absurdity of the solution.
You are simply not aware of these sections of mathematics. That's why it seems absurd. Mathematicians think otherwise. They're not stupid.)))
Yes, indeed, it's bedtime.
Moreover, I will tell you that once you understand how the stock exchange or forex works, you will realise that these markets are 100% identical.
I disagree. Price cannot react instantly to high volume.
I will justify my reasoning with a counter question.
If buying equals selling at each current moment in time, then 50% are in the plus and 50% are in the minus. But we know that in Forex we earn not more than 10% of traders. How come?
Theoretically there is a reason and time to weigh the situation and make predictions!
There is in fact a foreign exchange market. Some clients of this market use it elementary, as an exchange office, where you can exchange various currencies for some mutual settlements with foreign counterparties, some are engaged in investing activities, investing in some assets. They are the ones who provide the main turnover on the currency market, accordingly, based on their supply/demand the real exchange rate is determined. Besides the above-mentioned categories of clients on the currency market, there are also speculators - those who operate on the market for the purpose of making money on subsequent changes in rates. Solid speculators have enough money to be able to "swing" the market in their favorable direction. (All sorts of macro events have an effect on price fluctuations, but for simplicity we will not consider them now).
But there is also a large group of people, whose means do not allow them to be full-fledged participants of the exchange market, but who have the desire to earn on fluctuations of financial instruments. Forex is their destiny. What Forex participants do is not speculative trading. More exactly, it can be named a complicated version of betting on guessing the movements of financial instruments in the real forex-mimulator of the foreign exchange market. It is a kind of a "simulator" for a financial speculator. And the percentage of winners/losses of your bets in this simulator will have absolutely no effect on world currency rates.
Vladimir Suschenko:
.......
But there is also a large group of people whose means do not allow them to be full-fledged participants of the currency market, but who have a desire to earn on fluctuations of rates of financial instruments. Their destiny is Forex. What Forex participants do is not speculative trading. More exactly, it can be named a complicated version of betting on guessing the movements of financial instruments in the real forex-mimulator of the foreign exchange market. It is a kind of a "simulator" for a financial speculator. And the percentage of winners/losses of this simulator will have absolutely no effect on world currency rates.I used to think so too....
I don't need to look anywhere to understand the simple thing that the number of purchases = the number of sales. What may differ is the number of purchase orders from the number of sales orders... Perhaps that is the reason for your delusion, which has become the opinion you intend to remain with?