<p>LoL he lost billions but the man made MORE billions. Thats the thing. A guy cant ALWAYS be correct. Peter Lynch said it best. He basically said in a person's lifetime you dont need too many great stocks. How many 10 baggers does a guy need anyways? What you always want to do is try and get the gains to be higher than the negatives. Hah people at that time thought it was not possible to break the Bank of London but how do we know its not possible now? ;).</p>
<p>something called floating exchange rates</p>
<p>I know very well about the floating exchange rates. However it is still VERY VERY possible to make an inane amount of money particularly becuause of that. First of all the volume of the FX exchange usually results in 1-1.5 trillion dollars. It is possible that a person could leverage high enough and go long or short a currency to create drastic moves. The job report released this last friday resulted in a 70 pip bounce and followed by a 60 pip fall then a three consecutive 40-80 pip falls. If one leveraged that highly enough 1 bill can be made easy.</p>
<p>"Hah people at that time thought it was not possible to break the Bank of London but how do we know its not possible now?"</p>
<p>floating exchange rates means central banks do not have to defend their currency with FX reserves. if i went and shorted a LOT of pounds the bank of england would not have to soak all of it up with dollars and deplete their reserves until a devaluation. this is why we know it is not possible to "break" the Bank of "London" now :)</p>
<p>Well of course you can make a lot of money on a bank such as the Bank of ENGLAND (not London), but I don't think you'll find another person to take advantage of it like Soros did. Anyways, Soros used a lot of questionable tactics that might undergo intense scrutiny if they are used in today's financial world.</p>
<p>You do know that in 1992 the exchange rates were floating. ITs still possible to give enough pressure that a bank may be depleted of its holdings. Harder but not impossible.</p>
<p>One common misconception here is that Soros somehow "broke" the bank of England. This is not true, the Bank of England screwed itself with retarded policies that lead to conditions which made it profitable for Soros to short the pound. In Soros's own words, if he didn't do it, somebody else would of. </p>
<p>Soros sensed weakness in the GBP and ineptitude in the nation's monetary policy, and was able to make a handsom profit for himself and the investors in his fund.....this is the very essence of short selling...identifying things that are weak and overvalued....whoever identifies them first, makes the most money. For example, it was short sellers who first discovered the problems of Enron and World Com.</p>
<p>Do I think what Soros did can happen again? Not only is it possible, but its LIKELY. With India, China, and Eastern Europe, and Latin America becoming much bigger players in the global economy, there are going to be some wild times in some of the markets out there.</p>
<p>Yep. I will give you the exact values because my charts are running. If one looks at the later parts of 1992 on the GBPUSD chart you can see when Soros did it. It occured in September. GBPUSD was going at ~2.0000 but after that there was a fall to 1.4000. You could even figure out the total leverage he used if you take into account .1 lot is 1 dollar on .0001 change and then use a equation with whatever he made (1-2 billion) to get the leverage with a fall of 6000 pips. </p>
<p>He even caused a crash when the Asian Crisis took place in 1998.</p>
<p>"You do know that in 1992 the exchange rates were floating."</p>
<p>ok -- i guess you know it all. nevermind anything called the exchange rate mechanism PEG. good luck breaking a FLOATING exchange rate. be sure to lever up enough to move the fx market by yourself. that market is hardly liquid anyway.</p>
<p>"With India, China, and Eastern Europe, and Latin America becoming much bigger players in the global economy, there are going to be some wild times in some of the markets out there"</p>
<p>agreed. who knows what will happen.</p>
<p>The pegs may have been there. But still possible to "break" which I define as any movement of greater than 1000 pips in less than a day. And yes I get your sarcasm. ;)</p>
<p>Some countries still have fixed currencies so I suppose it would be easier (which is a relative word) to "break" them. But good luck trying to swing the whole FX market on the floating currencies.</p>
<p>wow, its like you guys are talking in chinese, i dont understand a thing that was recently posted.</p>
<p>but i do have aquestion: can you break into S/T out of college, like you can in i-banking?</p>
<p>UC_benz: Point taken. </p>
<p>Yes you can break into S&T out of college. What many people have trouble understanding is that almost all the biggest and best ibanks have a trading operation. Many people enter into that and then move onto trading. I find it quite surprising that anyone even CONSIDERING ibanking/S&T has never read books like "Liar's Poker" which everyone should definately do. BTW at most ibanks trading operations are nowadays making most of the revenues NOT ibanking. Thus the highest paid traders/salesman easily beats out the best ibanker.</p>
<p>Exactly, the FICC desks at the banks make most of the cash. For example, the FICC desk at Goldman was pulling in around 1.8bil while IBD was in the 900mil range (as of 3rd qtr last year). The big moves in FICC can be credited to mortgages, currency trading, credit/interest trading. Anyone feel free to correct my numbers btw.
Its all a matter of preference though. If you can think quickly on your feet and love the adrenaline rush of seeing YOUR trades affect the market, then trading is for you. However, not everyone is meant to be a trader. If you prefer to work like a dog over useless things like pitchbooks and slaving over excel spreadsheets than maybe you are cut for the IBD (M&A is what most people go to, though i was a bit biased there ^ :))</p>
<p>I have recently gotten interested in the forex spot market and am interested in learning more. Since you expert traders know so much, can you please recommend some books that are good for beginning-intermediate forex traders? I recently read "Forex made easy" by james dicks. I thought it was good but not great since the author only gave a bland and superficial look at the forex market - things such as technical analysis, options, etc. Also, he heavily stressed technical analysis over macroeconomic factors. I am looking for some material that encompasses both. Are there any other great books out there? Thanks!</p>
<p>believe it or not for traders the best thing to do is look at technical factors not fundamental factors. To put it simply a newbie trader will blow up trading fundamentals. Dont trade it. BTW the best money is made through trading on technical analysis. Also dont JUST use elliot waves. Use it to support your trading. Another important thing to remember: The trend is your friend. 9 out of 10 times it is and for that 1 time I hope you keep stop losses.
I have NEVER read a single forex book or any stock "strategy" book. Let me put it simply, if you have a strategy thats making you cash why in the world would you give it away! None of those so called forex "crystal ball" books work and they are most likely try and sell you automated trading systems. Create your own strategy. Observe the charts, play with the indicators, and look how trades could be made.
Sorry can't really help you directly as I dont want to give my strategy away :). </p>
<p>BTW pips doesnt matter, P/L does. It doesnt matter whether a guy made 100 pips but with a .1 lot trade thus making 100 bucks while a scalper makes 10 pips with 1 lots making 100 bucks. Remember that.</p>
<p>"I have NEVER read a single forex book or any stock "strategy" book. Let me put it simply, if you have a strategy thats making you cash why in the world would you give it away! None of those so called forex "crystal ball" books work and they are most likely try and sell you automated trading systems. Create your own strategy. Observe the charts, play with the indicators, and look how trades could be made."</p>
<p>Extremely well put. The best way to learn is by doing. Open an account, start out small, get a feel for it, and with time, you'll learn more than any book can teach you.<br>
If you do buy books, do your research on them first, half these so called "strategy guides" are written by hacks who've probably made more money from selling their product than actually trading. </p>
<p>If there is one book that I would recommend, it would be Brealey Myers (written by MIT profs). This is a text book, and its not so much for technical startegy, but its more to get a grasp of portfolio theory, how markets function, and the marceoeconomic factors that affect them. I was a philosophy major at NYU who only had vague ideas of how markets worked in college. I took one capital markets class my junior yr., Brealey Myers was the required text, and I've had this book ever since...seriously one of the best purchases I've ever made.</p>
<p>Brealey Myers is an excellent text, great rec jwblue. My brother just picked up a used copy (still in excellent condition) for about $45.
GoodLuck
p.s. remember to dl a sim forex platform at fxcm.com and form your strategy using that. You can dl an update for some REALLY good free charts. Use that for a couple months and get your stategy formulated. It will take some time because it will be a trial and error process before you come across the most efficient system.
GoodLuck!</p>
<p>BTW I know that I spent above 4 months almost creating my strategy and getting a good risk management system ready. Unless you really love trading you are going to be frustrated and as I have said in past posts 90% of new traders blow up their account. And of that 10% in less than a year 50% lose their account. So the odds are slim. I am not just making up these numbers. It was in a survey about day trading. In fact the numbers should be higher for forex and futures trading which are riskier than equities. Good luck.</p>