Roulette vs forex trading

[precogmiles]

I’ve been reading up on forex trading. I thought it would be easier to learn trading if I compared it to roulette.

I have noticed that technical analysis traders resemble roulette system players. I have a few questions for anyone who is experienced in forex trading.

First question is how similar is technical analysis to a roulette system?

What would the equivalent be of table limits in trading?

Is there a house edge when trading forex?

In roulette you can never lose more than you bet at any one time. Is the same true for forex, if I open a small account and link it to my bank account, could I lose more money than is in my small forex account?

I would like to transfer my roulette knowledge over to trading. So is there a trading market than resembles roulette better than forex?

Thank you

[Kairomancer]

Interesting approach. I do not have much experience with trading, maybe ignatus can tell you more.

I think the closest thing you would get to roulette is betting horse racing.
You could also try betting soccer final results.

[Kairomancer]

Playing many combination bets in sport betting can produce enormous odds. You can win huge pile of money risking very little.
I used to have a collegue who had precognitive dreams and made a killing that way.

Other option would be try some of the crypto gambling sites. I believe there are ethereum based smart contract online multiplayer games that are tamper proof. Those can be played anonymously with lesser risk of cheating.

[Kairomancer]

Another consideration against trading is taxes.
In our country gambling and sports betting are tax free, while you have to pay after your winnings at the stock market.

The other advantage is that the sport betting is monopolized and controlled by the government.
You can play even at your grocery store and they will never suspend you, despite your winnings.

[precogmiles]

Thanks for the interesting suggestions Kairo.

My major worry with casinos is that they can ban you at their discretion. I don't know what the FX dealers can do if I were to consistently guess the trades correctly.

You have a good point in regard to taxes but I honestly don't mind paying taxes as long as I can not be banned. My biggest concern is not being able to use my skill to generate a consistent profit. Being banned, because I win too much is the biggest problem.

[Kairomancer]

FX sites takes commissions. I do not think they banning players. Stock market is a huge casino.

You can try betfair. It is a live sports trade.
I would look at the tennis market. The odds fluctuate at each game point, just like playing on MPR EC's.

[Kairomancer]

You should also check provably fair dice BTC providers.
It is not possible to ban the players and those are all live online games with small 1% edge.

You can also have multiple online casino accounts and rotate them, hire someone to play with their Identities.

You can even run a tipster service.

[precogmiles]

You should also check provably fair dice BTC providers.
It is not possible to ban the players and those are all live online games with small 1% edge.

You can also have multiple online casino accounts and rotate them, hire someone to play with their Identities.

You can even run a tipster service.

All amazing suggestions, thanks. It has opened my eyes to different possibilities.

[Bigbroben]

I thought it would be easier to learn trading if I compared it to roulette.  Why?

First question is how similar is technical analysis to a roulette system?  Not really similar.

What would the equivalent be of table limits in trading?  The opposing bid or ask size

Is there a house edge when trading forex?    Commission maybe.  If into options, time is the edge against you

In roulette you can never lose more than you bet at any one time. Is the same true for forex, if I open a small account and link it to my bank account, could I lose more money than is in my small forex account?  Yes.  If you sell products that you don't have (short selling, selling option) or buying on margin

I would like to transfer my roulette knowledge over to trading. So is there a trading market than resembles roulette better than forex?  Why would you want it to resemble to roulette?  I guess you could use any kind of progression with options.  Different options have different leverage, where you can make 1x, 2x 4x or more depending on volatility.

Thank you

[precogmiles]

Thanks for the response Bigbroben.

The only reason I am comparing the two is because I know how roulette works. Just an easier way to learn a new subject if you compare it to something you already know.

Yes.  If you sell products that you don't have (short selling, selling option) or buying on margin

I have been reading more about forex. Are you refering to the spread here?

[Bigbroben]

No, I was refering to naked shorts.
Lets say you have 1000$ in your account.  You sell XYZ shares ( or currencies, whatever) that you do not own.  Lets say you sold 100 shares at 5$, thinking it will fall, so you buy them cheaper.  So you have now 1500$ in your account.  Lo and behold!  Great news come out: stock rises to 15$!  You're now having a margin call since tou have just enough money to buy them back.  So you lost it all, the 1000$.
But I guess I was wrong by saying they'd go after your other assets.  I guess of you play safe it wont happen.  So no short selling and no margin buts is safe.

As for banning you: no they wont.  The more you trade, the more commision they take.  Unless you're sloshing billions per day and manipulating the market..

[TheNameIsHut]

FX takes commission  , that's  how they get their money. Similar to other live poker based casinos. Their money is not at stake so they don't care about your winnings.

With roulette you play vs. casino and their money is at stake. The more they lose from you the more likely you are not welcomed there.

Ofc your play style is of the main reasons casinos bring that decision. If it's luck and you win 100k+ they won't bother because from their pov you are likely to give them some of that money back. As opposed to skillful play where you might win 6k and they ban you or limit your account and possibly demand other personal types of verification which most of the players refuse to give.

[Still]

I’ve been reading up on forex trading. I thought it would be easier to learn trading if I compared it to roulette.

I have noticed that technical analysis traders resemble roulette system players. I have a few questions for anyone who is experienced in forex trading.

First question is how similar is technical analysis to a roulette system?

What would the equivalent be of table limits in trading?

Is there a house edge when trading forex?

In roulette you can never lose more than you bet at any one time. Is the same true for forex, if I open a small account and link it to my bank account, could I lose more money than is in my small forex account?

I would like to transfer my roulette knowledge over to trading. So is there a trading market than resembles roulette better than forex?

Thank you

Yes there's a commission built into the spread. The way to reduce the commission is to target more pips per trade/try (I prefer to think of it as trying than trading) with average exits far away from your entries.

Yes it appears it can be very much like gambling in that people are out giving very bad advice and get away with it because rarely does anybody show statistics on their results and people don't run their own statistics I'd say because must be able to do analysis with software programs that you must buy...or be able to run Excel but not that many can do it.  Yah, I am absolutley sick of teachers talking about support and resistance and "structure" as the cool kids are saying now without any numbers to back anything up. 

Now supposedly the forex is not purely random because there are human emotions involved that add a bit of predictability.  Still hardly anybody posts statistics or modeling results. 

It's quite possible that people who are winning are using precog unbeknownst even to themselves.

Using a "grid" system is very much like the +1/-1 progression system in roulette .  some use a hedged grid both buying and selling at the same time.

Similar to grid is renko only without the negative progression and always directional .  like playing follow the last on even chances.

I've asked Roulette Warrior...the precog guy on youtube if...or why not he apply his skills to forex and he replied something like he likes the immediate feedback of roulette but that it is a skill definitely transferable.

Now it would be easiest to create an equivalent even chance game with approx similar commission structure just by gridding equal distances in price from one distance to another. 

If you need or desire high payout similar to hitting an inside number in roulette you can "stitch" together several even chance bets...parlaying all the way up to 32x your initial unit.  So you can find 32 different ways an even chance bet will arrive at 32x payout and those are your 32 numbers.

Worth studying is the concept that random entry can be overcome with strategic trail stops that follow along . That would be the first thing to study (for non precog people) with the goal of overcoming commisions and maybe a little more just using random entry. Then if you can find an entry giving a slight better win rate it's like frosting on the cake.

Not talked about much is the concept of trading your own equity curve. Worth looking into. 

But yah, if you have a repeater or anti repeater method that works in roulette it should be transferable cause of how you can stitch up even chance scenarios.  And there is the possibility that what won't work in a purely random environment might work in forex cause of human emotions.

Would not worry too much about losing more than your account. Brokers will protect themselves if your account goes beyond margin and actually close trades.  Stop loss orders also help contain catastrophic moves in price.

I think renko is underated and most resembles even chance but with the possibility that slightly longer trends distinquish forex from purely random environment. Otherwise grid systems will definitely cash in on sideways markets.

[Still]

One more thing. So yah you can make even chance bets by placing a stop equal distance from a target. Similar , you can place a target twice the distance from initial stop to replicated a 2:1 payout like dozens or columns.  Likewise a 3:1 "risk reward ratio" will mimic yet another roulette bet. On up to 32x payout or maybe there is even a way to mimic a 36x payout.

But the ability to trail stop is probably an improvement over roulette and should at least help overcome commissions.

If mean reversion from an extended standard deviation works in roulette then it should work in forex.

[Still]

Thanks for the interesting suggestions Kairo.

My major worry with casinos is that they can ban you at their discretion. I don't know what the FX dealers can do if I were to consistently guess the trades correctly.

You have a good point in regard to taxes but I honestly don't mind paying taxes as long as I can not be banned. My biggest concern is not being able to use my skill to generate a consistent profit. Being banned, because I win too much is the biggest problem.

Yes this is a concern but you should be able to avoid it with the help of sites like Forex Peace Army who are kind of watch dogs on that sort of thing.

The problem seems to be how one kind (there are a couple of kinds) of brokers is heavily involved in the other side of your trade. I don't think all brokers are set up this way though. Even if they are all they have to do is reverse and coattail your positions if indeed your accounts equity curve is marching steadily higher...which they could easily see.  I think it is more situations where the broker doesn't have time to adjust their position from expecting retail traders to lose to following the ones that win. There are retail traders who can make 10x and 20x in short order and that can surprise and hurt anyone taking other side of trade. 

There are outright scam brokers but by and large I think there are enough good ones to sustain your intentions and yah, using multiple brokers might help.

Bit it seems to me that you could communicate with them (interview them ) before you even start and ask them if they have a problem with you consistently winning and that you WILL win.  They should be thankful for the opportunity to coaittail (or even front run) your moves...if indeed they ate the type of broker that usually counters customers.

There are several forums on forex where just this issue is discussed among everything else. Elite Trader comes to mind. Maybe Kreskin. Baby Pips.