Are you looking for the forex lotto ticket?
Are you trading forex or playing super lotto?
I’ve just been perusing the internet for different forex strategies and I can’t go anywhere without being bombarded by super-hypey sales pages that guarantee I’m going to be a millionaire by the end of the month! Then I ask myself, if this is what these so called “gurus” are marketing, do most traders expect that they’re going to make a ton of money with a small investment, in a small amount of time? It sounds to me like purchasing lotto tickets.
So I’ve got to know… If you knew it was possible to make $5,000, $20,000, or even $50,000 on a small account of $500-$2,000 like some of these sites claim, would you still get and use a strategy that allowed you to do that EVEN IF you were told that the chance of blowing your account was more than a percent or two?
OR…
Would you be happy with just proving to yourself that you could make “smaller” and more realistic sums of money at first, then increasing your leverage and adding strategies later on as you gain more experience? When I say “smaller and realistic”, I still mean beating the long term stock market average by a good margin while still keeping your account very safe and avoiding short term gyrations in the market that stop people out so often.
This is important for me to know so I can write about strategies with the correct degree of agressiveness. I tend to be more on the safe side, but lever up a lot depending on my level of certainty, but you may be different.
Whoever comes up with the best response by posting on the blog (form is below) in the next few days receives a FREE SCHOLARSHIP package that includes my “Interviews with Star Traders” audio series (where I interview forex hedge fund and bank traders) plus my “Forex Trading Excellence” Ebook package (which includes both special forex trading strategies and emotion-free-trading tactics). Please take a minute to get the opportunity to win this $340 bonus package.
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14 Responses “Are you looking for the forex lotto ticket?”
Please leave comments by using the form in the “Leave a Reply” section. Excited to hear your response!
-Kris
If there is a supply, it’s because there is a demand.
My meaning is that if you can find a lot of websites preaching that a novice trader can make millions after a month of trading, it’s because a lot of new comers think the market this way (and go online to find the holy grail).
In terms of marketing, finding a niche with a lot of demand, is ideal. Why advertise a trading system with small consistent profits that will only attract a few, when you can advertise a million a month that will attract thousands?
That’s probably the line between being honest or dishonest.
To answer your question, i believe that most of the traders are interested in short term trading (and probably, most of the traders who make money trading are swing or long term traders).
If you offer a short term trading system, you will attract more people. Now, in my own view, a good trading system works both long and short term…
I guess there’s no hard and fast answer to this one. I believe one of the key influential factors is the financial situation that one is in at the point of time. For e.g., if I have excess cash on hand which I can afford to GAMBLE/SPECULATE, the first option seems pretty appealing as it “promises” huge reward with relatively “low” risk. On the other hand, if I’m strapped of cash,and/or intend to trade for a living, the latter option would seem to be a wiser choice due to the fact that STABILITY and PRUDENCE exist within the strategy. Other than one’s financial situation, there are other influencing factors as well, such as one’s personality (risk-taker, hardworking etc.), degree of understanding of personal finance management, availabilty of information and so on and so forth. But ultimately, I believe that one’s financial position plays the key role, if you can afford to gamble, go ahead. If not, do your research, conduct due experiment and let the results decide which strategies suits you best.
Hello Kris,
that’s a good question to ask!
I would vote for option number 2, being happy with smaller gains and gradually building up equity and leverage while adding strategies.
Why?
Think of it this way:
The only area of business, in which you can expect to make money with little to almost no risk is gambling! But not as the gambler; as the casino itself!
While it may happen from time to time to that a single gambler takes the jackpot, (which, in terms of trading translates into making 100.000 from a 2000 dollar account by taking great risks), it’s safe to say, that you’ve to be incredibly lucky to take the jackpot, right?
And every casino knows that they can afford to pay the occasional jackpots, because in the long term they will always have the odds on their side, they will always be profitable. In fact Casinos are only rich statisticians!
As a trader you’ve to ask yourself: What would i rather want to be? The gambler, or the casino?
While i admit that it could happen to turn 2k into 100k, this means risking almost your entire account on every trade in the early stages of trading and you have to be very, very, (very) lucky to succeed, considering the nature and dynamics of the forex market.
Now, why would you do that?
I personally can’t really think of a reason, unless you want to gamble!
And that’s exactly what these system vendors (with a few honorable exeptions of course)are counting on! They are selling a “get rich quick scheme”, which i’m confident to say, does not exist in trading. But unfortunately greed and fear (as parts of human nature) are powerful motivators; they let us fall for so many traps and make us do things, we would not consider otherwise.
You should also think about the psychological pressure trading can put on you! If you ever traded live you know what i’m talking about. It’s so much easier (and healthier)to risk less, also if that means to build up your equity slowly. Just go easy on it and take your time to learn all you can about the market, it’s behavior and last but not least, about yourself!
Alexander Groessing
Hi Kris,
Good post and great with the opportunity to win!
I get these emails daily, with promotions of new services and products promising rags to riches. What amazes me is that there still seems to be a market for this. Long sales pages and the promise of becoming rich within the end of the week seems to get people´s attention. There are so many pitfalls, as these internet marketers often use misleading statements, leave out important information or simply just lie right up in our faces; return in pips rather than percentage, EA´s trading with no stop loss, spread consideration, etc. The sad thing here is that people start with forex trading with the expectation of making money, not spending them; especially not on useless products and services. First you spend hard earned money of a useless product, and then there is a good chance that you will lose money trading with that system, strategy, EA, etc. Additionally, it is so difficult to find reliable information and reviews, which makes the new guys even more exposed to these guru wannabe´s. People need to lower their expectations and get solid information.
In my observations …. very small retail traders pay attentions to what you said. Legions of trader outhere still doesn’t aware of how the market really work AS IT IS . It’s amazing they still going from one system to other with ‘full passion’ while their capital already burned (slowly) not by the market, but by they ignorance and “i know it all” attitude. Till this day, it’s AMAZING ….
what’s REALLY bugging me is why so many retail trader so ingrained with many false assumption about forex trading. Why? And my salute for marketing wizard outhere with ‘inside the box’ be fx millionare strategy in one click. Thanks for bugging me crazy but it has PASSED AWAAAY. Hard work, common-sense are the sure way to achieve success in the LOOOONG-TERM. Your methodology is subtle but bugging me because based on how the big dog really think.
Thank you Kris for offering us a chance for a scholarship. I have seen the same super-hypey sales pages promising never before released secret strategies. I fell for it twice only to discover that the indicators and secrets can be found easily by the ernest seeker.
Here’s what I finally concluded for myself. I’m a spreadsheet girl, so I set up my results to tell me what the minimum net pips I need each day to be financially independent with a consistent income from my modest forex account. Starting with $5,000, 29 net pips a day would meaningfully change my life within 6 months. You are right. Smaller, more realistic wins are the key to long-term success. I can email you my plan for proof, it’s worthy of a scholarship! Happy trading!
As human beings, we are all subject to various cognitive biases. One of the most prevalent is optimism. While a good survival bias on the African plains, it is quite a disadvantage when investing. We all tend to think of ourselves as better than average in most respects- better drivers more funny, better lovers, smarter. Of course, it’s a statistical impossibility, not withstanding Garrison Keillor’s Lake Wobegon. Therefore *I* will do much better than all the investment banks, hedge funds and endowments eking out a bare 20-30%/year returns. 100%/week might even sound silly the morning after, unlike last night when you hit “Buy Now” at 2am after staring bleary-eyed at your 2 min charts and reading about the new, double-secret, forex trading strategy ad.
Qui Bono? asked Cicero. Who benefits from the sale of these strategies? Clearly not the investor. If so, I imagine we’d see articles in the Wall St Journal, Forbes and elsewhere about the revolutionary investment strategy returning 1000%/yr. We’d see pictures of the customers yachts. We’d see Lloyd Blankfein firing all his prop traders at Goldman-Sachs because they aren’t giving him these kinds of returns.
No, there’s no Santa Claus, Easter Bunny, or Pot of Gold at the end of the rainbow. Those who think so must still be quite young and naive.
Hi,
Thank you for the good job.
Answering your question, I choose the second option. This is because I see trading forex as a business a not a gamble.
the marketing wizards comes regullarry on media with half-truth mix with other. Better solution probably simple, check your bias every time make trade decision. Ask : What methodology that always work no matter what market volatility throw at me ? And, read this blog slowly and absorb the material. Be aware that there’s real traders monk out there that willing to guide retail traders to better understanding on how other market are thinking and positioning. Only focus on what’s work in long-term. Get connected with mentor that have same perception and same position AS retail trader. Trust “gut”. Test it . Probably .. pessimism is our best friend.
based in personal experience, second options is better to build trader capital preservation in long term. But only if one understand short-term randomness in fx market. I like to focus more on underlying fundamental. And forget about intraday trading. It’s make trader’s job more simple and not try to predict where price will go next. Reduce pressure a lot. Just focus do right things, do right analysis and do right risk management.
These sites depend on people’s ignorance, lack of enlightenment on how markets work and sheer greed! To me , common sense appears to show that the market is a zero sum game in a point in time. How can every one be a winner then as these sites purport. I believe the second approach which enables you to gain an advantage on the other participants by slowly building up your arsenal of strategies to drive your ratio /expectancy into positive territory is one truly can make you an independent trader and establish long term success in results.
Thanks alot of your posts!
This is a very important observation, Arthur, well done. Thanks to all for your replies. -Kris