Your Questions About Successful Trading System

Steven asks…

Is it good to invest in Forex trading?

Hi
nowadays there is a lot of ads about Forex trading..im interested in Forex trading and i have no experience in it.. can any one can guide me and can give some tips about trading .
thanks

John answers:

I’ve read a lot about Forex, but I’ve never seen a proven profitable forex strategy, despite the claims of some scam web sites.

Playing Forex can appear alluring, but the majority of people who try it lose money. All you have to do is do a web search on the words “Forex” and “lose” to see this is the consensus.

Forex is what we call a “zero sum” game. You are making a bet with someone else about whether a currency will rise or fall. For every winner there has to be a loser. If you are smarter than the average player, you may make money. If you are dumber than the average player, you are likely to lose money. Most of the people making the “bets” in Forex are highly trained professionals at banks and other institutions. You are unlikely to beat them at this game.

Actually Forex is not quite a zero sum game. It’s a slightly negative sum game as the Forex broker takes a small percentage each time in the spread. It’s a small amount but over a hundred trades, it ends up being a considerable amount of money. So the average player is likely to lose money, and remember the average player is a highly trained professional and probably smarter than you.

There is a lot of luck in Forex, and if you play it, you will have some periods of time where you make money. This is usually because you are having a lucky streak, not because you have suddenly become an expert Forex player. However, most people are unwilling to admit their success is due to luck. They become convinced they have a system that works, and lose a lot of money trying to refine it.

Further complicating the problem is the large number of Forex scams on the internet. Most Forex websites are of questionable honesty. You will find many people on the Internet that claim they made a lot of money using Forex. They are usually liars trying to make money. They will say: “Go to Forexcrap,com/q2347.” The “q2347” is a signal to the Forexcrap site that you are being referred to them by “q2347.” If they sell something to you, “q2347” gets a kickback. These coded signals can be hidden by different methods in the link. Other people will refer you to their own private website or blog for the purpose of trying to get money off you. Also there are a good number of trolls out there that like to pretend they are successful forex traders just for the fun of it.

I would recommend not trying to do Forex at all, unless you are a trained professional. It’s like playing poker with people better than you, with the house constantly taking a small percentage from the pot.

Ken asks…

Can I make money through Forex Trading, if I invest minimum of US$500 of my saving?

Can I make money through Forex Trading, if I invest minimum of US$500 of my saving? And which currency combination is the best to trade? Kindly let me know.

Thanks.

John answers:

Playing Forex can appear alluring, but the majority of people who try it lose money. All you have to do is do a web search on the words “Forex” and “lose” to see this is the consensus.

Forex is similar to what we call a “zero sum” game. You are making a bet with someone else about whether a currency will rise or fall. For every winner there has to be a loser. The net winnings of everyone combined equals zero. If you are smarter than the average player, you may make money. If you are dumber than the average player, you are likely to lose money. Most of the people making the “bets” in Forex are highly trained professionals at banks and other institutions. You are unlikely to beat them at this game.

Actually Forex is not quite a zero sum game. It’s a slightly negative sum game as the Forex broker takes a small percentage each time in the spread. It’s a small amount but over a hundred trades, it ends up being a considerable amount of money. So the average player is likely to lose money, and remember the average player is a highly trained professional and probably smarter than you.

There is a lot of luck in Forex, and if you play it, you will have some periods of time where you make money. This is usually because you are having a lucky streak, not because you have suddenly become an expert Forex player. However, most people are unwilling to admit their success is due to luck. They become convinced they have a system that works, and lose a lot of money trying to refine it.

Further complicating the problem is the large number of Forex scams on the internet. Most Forex websites are of questionable honesty. You will find many people on the Internet that claim they made a lot of money using Forex. They are usually liars trying to make money. They will say: “Go to Forexcrap,com/q2347.” The “q2347” is a signal to the Forexcrap site that you are being referred to them by “q2347.” If they sell something to you, “q2347” gets a kickback. These coded signals can be hidden by different methods in the link. Other people will refer you to their own private website or blog for the purpose of trying to get money off you. Also there are a good number of trolls out there that like to pretend they are successful forex traders just for the fun of it.

I would recommend not trying to do Forex at all, unless you are a trained professional. It’s like playing poker with people better than you, with the house constantly taking a small percentage from the pot.

Read the warnings in the links below:

David asks…

What are the key points to a successful market economy?

As previously stated, what specific ideals create a strong market economy?

John answers:

In general, a market is a place where people voluntarily exchange (trade) anything. Those things can either be something physical or intangible.

A quick aside, lets say you need a pair of shoes. You might go to several stores looking for the right kind, comparing prices, and eventually purchasing a pair. You have just participated in your local shoe market. You interacted with many shoe sellers and traded your money for their shoes.
The same concept is extended to services, like going to a sports game or comedy show. You exchange something (again your money) for something in return. In this case, you received entertainment. And more personally, yahoo answers might be considered a market-place for ideas. The trade being that you acquire knowledge from someone, then exchange your expertise with the community on a different thread.

So what is important to a market economy? Since a market basically consists of voluntary transactions amongst people, then any cost that impedes a transaction would generally be “inefficient” or undesirable. Since we live in a world with constraints (i.e. We have limited income/time) the more things cost, the less we have to spend on other things. So, taxes raises the cost of any good or service. This is a general reason why many people oppose taxation. Also, distance between buyer and seller can increase costs because they will have to use more resources to communicate with one another and to facilitate exchange of their good/service (transaction costs).

A more complex conclusion might be that high market-entry costs (i.e. Price controls) produce market inefficiencies. Because competition drives down supplier prices, by not allowing new suppliers to enter a market requires consumers spend more resources to obtain the same good/service.

Markets are a lofty ideal. They are bigger than any government or political one. In actuality, governments participate in markets. They are just a massive buyer and seller in the marketplace because they have a lot of income. From this perspective, government competes with its citizens for precious resources. It may seem counter-intuitive at first, but many economist believe that people interacting in a free-market system can establish a civil society without governmental participation.

Ruth asks…

How successful were the Progesstives by 1920 in solving the problems of American society?

What problems were not solved by Progressivism, and why weren’t they solved? If another Progessive movement were to start today, what should its goals be, and how could they be reached?

John answers:

In three areas, Progressivism did improve American society substantially (though you couldn’t say they completely solved these problems). First, they brought in effective regulation of many areas o fbusiness–railroad and oteher industrial oversight, the Pure Food and Drug Act (the start of the FDA), etc. Second, they introduced important and lasting reforms in local governments (thus eliminating much of the corruption)–and at the national level reforms such as the right to vote for women. Finally, they made great strides in public health and sanitation.

The Progressives did almost nothing to redress the problems of racism–in fact they made it worse. An ugly part of the movement was “nativism”–a suspician of immigrants that, in the 1920s, led to restrictive immigrationlaws based on racial stereotypes. They also failed miserably when it came to labor issues. Under the rhetoric of “Scientific Management” they pushed for the elimination fof any autonomy for workers and were generally unsupportive of organized labor. To be fair-these negatives were not true of all Progressives, but they are effects of the movement overall. The chief weakness of the Progressives was a deep-seated paternalism. Largely middle-class whites, they had a strong belief in their own racial and cultural superiority–and this can be seen in many of their writings–and explains most of the faults I mentioned (e.g., few of them considered workers in factories as being capable of making an intelligent contribution–the worker needed to be subordinated “for his/her own good.”) That streak of paternalism is also at the base of the temperance movement that led to the disaster of Prohibition.

One other point needs to be made–much of the form of modern business–the large corporation and professions as we know them today–are largely products of the time. And were not particularly a goal of the progressives. Rather, at the end of the 19th century, there was a tension–and debate–between those who sought to retain the structure of smallerr businesses that was typical of American commerce and industry up until that time–and a deep distrust of large corporations. But at the same time, the big firms were clearly “here to stay” by the time WW1 broke out. The result was a trade-off–a regulatory framework to give society some control over the power ofthe corporations. But many would have preferred to dispense with giant companies altogether.

A Progressive movement today? There could be another reform movement in the near future–the Progressives weren’t the first or the last such movement. In fact, there are strong signs of just that–here’s some indicators:
> the growing awareness of the issue of global warming and dependance on oil–plus the clear implication of major changes in energy and business policy
>Immigration–whatever your feelings on that–everyone knows its a mess and reforms are badly needed. Its what reforms, and whetherthey should go in certain directions that’s the issue
>the relationship of business and workers. The old system–health care and pensions–are clearly breaking down. Another dimension of this is labor rights–unions are not effective–and the current business climate and government policy is at best indifferent to labor and worker’s rights, at worst openly hostile
> Again, regardless of your personal politics, its pretty obvious that we’re going to have to drastically revise how we do foreign policy
> there are an increasing number of individuals–some of them quite powerful–taking “matters into their own hands” to attack problems. Gates and Buffet with their efforts in Africa and other philanthropic eforts are one example. There are a wide array of entrepreneurial efforts aimed at steppping outside conventional paths, particularly in the technology sector (solar energy and other forms of alternative energy, commercial aviation and spacetravel are among these). This individual or smalller scaale activism is also becoming apparent in state initiatives to address problems we’ve been used to thinking of in national teerms–e.g., the environmental reforms in California (and other states as well)
>an increasing dissatisfaction with corruption in political and corporate circles on the part of the majority of the people.

All of these are indivitative of a socio-political climate that’s ripe for producing a major reform movement.

Donna asks…

Is my idea of excellent political system meaningful?

I came out with the idea of ideal state system, it might look communist, but it’s not.
1. Government is supposed to provide jobs for all people willing to work. If government fails to provide a job, citizen can sue government for that.
2. If a businessman starts business, he should share 99% of annual revenue with all the, and only 1% could he be allowed to put into his pocket.
3. All the nightclubs, bars should be closed. Instead, this money should be confiscated from the owners of this businesses. So should the money from Las Vegas be confiscated and put into the development of free education and free health-care.
4. All the restaurants are supposed to provide all the people with free food twice a week, regardless of their desire. So are the stores, which sell food.
5. Holywood actors salary should be dropped to 6 dollars per hour. Not more. Salaries of coal miners and policemen should be risen up.
6. Taxes should be taken only from the rich people, and taken INTENSIVELY. Up to 99 percent of all the money.

John answers:

I really hope this a joke. Just to point out a few things….

1. How can the government ensure that everyone willing to work can get a job? That’s not their job; they should have minimal intervention. Heavy reliance on the government has consistently led to economic downfall.

2. One of the most successful elements of the whole free-enterprise, free-market, capitalistic political-economic system is that people work hard to get where they are and should be rewarded for rising so high up. Sharing so much revenue leaves little motivation for people to become well-educated and hard-working. People who work hard and succeed deserve to be wealthier. This idea dates back to the antebellum period when the free labor system was first developed and abraham lincoln serving as the epitome of the american dream. The only reason that some people in today’s society see this system as faulty is because of all the prejudices and injustices society has created having to deal with race and opportunities available to individuals. However, that is more of a social issue. Between 1840 and 1850, there was a huge rise in immigration (mainly german and irish immigrants) in america. Because the english heavily persecuted and took advantage of the irish, the irish came to america as poor, unskilled farmers fleeing starvation from the potato famine and persecution from the english. Meanwhile, the germans, fleeing war-devastated land, were generally people of skilled trade. Thus, the germans found jobs easily and mixed well into mainstream american society, where most people were from places like england, sweden, etc. However, it was difficult for the irish to find jobs and they often competed for jobs of domestic service with free blacks. Because the irish worked similar jobs to the blacks, society placed them on a pedestal for discrimination. People were prejudice towards the irish and looked down upon them. As a result, the irish began to look down upon the blacks and insult them in order to create white supremacy. A shift soon occurred from gaps between social classes to gaps between race. Eventually, the irish were able to become successful under the idea of white supremacy and mix in with the rest of society, working their way up the free-labor system “ladder” and leaving blacks behind. In today’s society, such a shift has occurred over time that now, instead of being prejudice towards blacks (it still exists but is not as prevalent), we target those of immigrant backgrounds and lower social classes. On the other hand, if a person does not belong to one of these minority groups, then it is their fault for being unsuccessful, considering they had a plethora of opportunities available to them. Granted, there are a few instances in which that is not the case, but in a lot of cases, the people who are poor are poor because they chose to, whether that be because they decided to drop out of high school, not go to college, become drug addicts/alcoholics, etc.

6. While i agree that the wealthier should be taxed heavier than the poor (because logically speaking, they do have more money after all), i don’t agree that they should be taxed so intensively, especially not 99% of all money. Like i mentioned in #2, they deserved to get where they are in life through hard work and most likely an extensive education

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