vvv The odds are with MRM's very excellent analysis.
There are, I kid you not, as many currency trading financial "models" as there are currency traders: Accurately predicting currency futures is the absolute Siren's Song in finance.
I had a professor in undergraduate school who worked for BofA in SF doing currency work. I helped him model some stuff in arbitrage efforts...nothing he or the bank used, he was just pushing my understanding.
He had a great line I'll paraphrase: "Looking backwards at currency performance and relationships is like relying on an insurance actuary: They can anticipate trends in the future but they cannot predict that you will not walk in front of a bus."
Best of luck to your friend. I sincerely hope, like any gambler with sense, that he is not using loans to gamble and that he has set a limit on how much he is willing to lose.
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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