February 28, 2007
View From a Currency Trader.
I'd like to offer another view on the proposed SEC limit increase.
As a currency trader you do not begin to REALLY progress until you learn how to recognize two critical things:
Balance and Relativity.
In the unwashed masses' "rush" to get money in the markets via investments and trading, use of just about everything ELSE under the sun is the norm.
That's why 99% of new currency traders get their account vaporized when trading the ForEx.
Many, thinking to themselves that the use of numerous and more complex "indicators" is all that is required to come out a winner in more trades than they lose, tend to skip over the more critical principles.
Everything is relative. Well, the SEC's proposal, if passed into law, will also invoke relativity.
There WILL be a great financial balance. For good. And, for not-so-good. Some will benefit. Some will not. But, that's market law. That the SEC did not write.
Until you learn to see that everything IS relative, you truly cannot begin to hit the higher(est) levels of achievement. Be they in currency trading, or in investing, even investing in hedge funds.
Since balance is truly one of the greatest underlying principles of successful currency trading, I, for one, can be completely uneffected by whichever way the SEC decides to go BECAUSE I've learned to temper my currency trading (that is, what is effected in my life in the investable/tradable markets) by understanding and applying the market reality of balance.
To all who posted as I did, with a knee-jerk reaction at first, take it lightly if the SEC raises the limit instead of completely doing away with it.
Because everything is relative. And in perfect balance. In the big picture. In the great scheme of things.
As a progressing student of the ForEx market, as one who has advanced, I can tell you, you can get much greater gains by learning to trade well in currencies (that, by the way, do not charge a commission fee, nor RT fee, only the spread is taken by the broker ONCE when a trade is placed - closing a trade is 100% free) yourself, and you can easily crush the average returns of hedge funds by learning how to apply the simplest principles.
In either investing via "sophistication" in hedge funds, or by learning sound currency exchanging techniques (that, in my book, certainly counts as "sophistication") the richer are in perfect balance with those not as rich.
Because both rich and poor have access to the greatest market of them all: The global currency market.
And, if you think hedge fund managers themselves are sophisticated enough to always get good returns, you need not look further than running a Google search on "Goldman Sachs Global Alpha (hedge) Fund" to see, according to some sources, that they earned about $700 million in management and performance fees from its $10 billion Global Alpha Fund in the year ended Nov. 24.
But, how much did they LOSE of "sophisticated" investors' money? Depending on the source, as much as 12% loss.
They, articles have said, were trying to trade currencies. The same currencies available to everyone for as little as $1.00 per trade.
If you're not rich enough to hit the minimum financial entry levels into hedge funds, don't feel bad.
You can always trade money in the same market Goldman Sachs lost in, in 2006. The foreign exchange.
Maybe someday you'll even learn... how to wipe out the national debt. :-)