Quote:
Originally Posted by MRM
He will eventually lose all his money, probably sooner rather than later. Currency trading is among the most complex trading classes possible. Even most huge multinational corporations who deal with currency from dozens of countries and have to repatriate it don’t hedge currencies and that’s safer than straight up trading. The people who do it professionally have super computers and have access to raw data the amateur investor can’t hope to replicate. If a guy in his basement running charts on his desktop PC can do it, Warren Buffett’s operation might possibly have a few extra resources that give them an edge. Charts are so intuitively powerful but they’re backward looking. They tell you nothing about the future and treating past trading ranges like a crystal ball into the future is a sure fire recipe for disaster.
He’s guessing, not investing. He’ll be right until he’s wrong. Eventually he’ll guess wrong and get wiped out.
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This is all true but even the professionals are guessing at the future. The main difference between the big guys and the little guys is. The big guys get the data some times 24hrs prior so the can set trades in advance. The little guy has to trade on the fly basically.
Also the big guys have the ability to move the market where they want it. Through the media and monetarily.
Buffett is a prime example he will enter a position then go on TV and say I just bought, sold, shorted what ever. Then all the rookies do what he did. He just moved the market to where he wanted it. He then gets out of the position.
This is a good video. Cramer on market manipulation. For those who don't know RIM is research in motion=Blackberry.