How to beat the spread in forex
How did he do it? By understanding the odds and not playing by the house rules.
It turns out that if you are a large enough gambler casinos will offer you a rebate. By negotiating these and other provisions with the casinos, Mr.
Johnson was able to narrow down the house edge to nearly breakeven. He combined his deal making skills with nearly faultless card play, making bets only when the odds were with him.
How to beat the forex market - General - MQL5 programming forum
Since the odds were basically on any given hand, once Mr. Johnson got ahead he pressed his luck and was able to pyramid his winnings to a 5 million dollar pot in one 12 hour session until the Tropicana casino finally cut him off. But before you run off to Atlantic City or Las Vegas to try to replicate his run, understand that it was only possible because casinos were so desperate for business that they broke their own rules of the game.
For us traders however, there are several good lessons to learn from Mr.
Question on statistical edge and beating the spread - Beginner Questions - ronoxivipyr.web.fc2.com Forex Trading Forum
The first and foremost is that in order to succeed we need to whittle down the house edge by as much as possible. In FX that means following three very specific rules. Trade on the tightest spreads possible. At this point if you are paying more than 1. Those are the minimum acceptable spreads and in fact you should be paying 1 to 1.
Most novice traders miss this point entirely falsely believing that tight stops will prevent losses when in fact they will just bleed out their money through death by a thousand cuts. Stand down when direction is unclear Perhaps the single best lesson from the Don Johnson story is that he refused to play by the house rules.
Forex - beaten by the spread
Instead of jumping in blindly into game much like most traders who dive into the market without a second thought he carefully negotiated his terms and only made large bets when the deck favored high cards.
In FX, our one advantage as speculators is that we can choose to stand down when price action does not favor our odds.
One of the reason why our BK Flow product is doing so well, is because I assiduously avoid any known volatility and trade only after the event has transpired, allowing the market to shake out the weak longs or shorts before assuming the true trend. Your email address will not be published. You have no items in your cart. Leave a Comment Cancel reply Your email address will not be published. Username Password Remember Me Lost your password?