Forex - the next big thing? I doubt it...

[ozim]

Forex seems to be a hot topic when affiliates talk about a new hot trend. It's supposed to be just like e-gaming only bigger, better, legal, easier seo-wise etc.
I'm not a forex affiliate (although have some domains/websites ready just in case) but I had invested on the forex market. And I doubt there are millions to be made on forex affiliating. Especially the easy way...

Here is why I think so (I focus only on the possibility to take money from the market as an affiliate without going to deep in other aspects like seo, marketing etc.):

forex vs. poker

Only 20% of poker players regularly make money. That means most of the players are losing money. The same same ratio applies to financial markets although the percentage of winning players (investors?) may be much lower, especially on forex market. Maybe 10% make the cut. So the first disadvantage of forex is that there will be more losing players.

On the other hand losing poker players will keep playing for quite a while. They will got lucky from time to time, suckout here or there, they may go to lower stakes and hold their own in smaller games. And most importantly they can keep on playing, losing money and they will still have a lot of fun - which is what poker is supposed to be about. I don't think this is the case with FX market. An average Joe will be slaughtered in this market. He will lose his money quickly! I don't have a problem with that so let's compare forex vs. online casino...

forex vs. casino

In this case I'll make a simplified assumption that every player is about to lose his money. Now how much money can I make if I recruit Joe-with-$10,000-to-spend to a casino and a forex program:

* casino - with a good deal, I can even get half of this money = $5,000
* forex - Having $10,000 and with a leverage of 1:100 Joe can open a position equal to $1,000,000. With a spread as low as 2 pips on major currency pairs (pip=$0,0001) Joe's transaction cost is $200. That's the profit of an fx operator. Now it only takes market to move 1% the wrong way and Joe loses his $10,000.
The $9,800 doesn't stay in the casino, it's being transferred to an anonymous bank or other institution who happened to be on the other side of the transaction. In other words 100% of Joe's money evaporated, the house made $200, and me, an affiliate... I don't know, maybe $100? 50times less than in the case of the casino!
In reality Joe will probably not lose it all in one transaction. He is more likely to behave like a fish out of the water switching from one side of the market to the other, which means he will spend bit more on a commission and make his demise even more inevitable. So the fx operator may earn let's say $1,000, in the optimistic scenario $500 will go to an affiliate... hmm, I'd rather have a shot at the $5,000 in the casino.

Just my 3 pips.

[Bandwin]

I think you ignore the fact that the casino costumer knows (at least the very most of them) that he's losing while a forex costumer might think he's beating the game (like most of the poker players). I guess this changes your calculation a lil bit.

[snowy220]

money is money, punt both and its still better than a poke in the eye with a sharp stick!

[Charon]

i did some calculations with a friend of mine, we came to the number that there cant be more than 5% of winning players in poker.

no idea of financial market situation, but 10% is for sure way too low number = lots of people make living out of this. lots of institutions, investors earn money in financial market.

in poker, everyone is against everybody. poker itself does not produce any value, no product.

in financial market people are not limited to competing each other. the investment goes into into the economy. as it is developing and making profit, so is the investor.

there are brokerage fees which cut into the winnings of an investment. i have no numbers how financial market investments in general are doing, but i cant imagine that less than 30% are making profit. i would expect at least 35-40 to be making profit.

forex, a niche of financial market, does not incorporate this classical set up of investment and win sharing. it is actually very similar to poker or sports booking. your bet versus other bet. rake = commission. so the winner is the house (trading institution) itself.

and numbers of losing/winning investors should not differ much from those in poker/sports betting i guess? beside that, the amounts involved are bigger and thus rake also.

at this point it looks much more appealing to be affiliate with forex rather than gambling. still, i know several people who had a shot at forex and none of them had noteworthy success.

[mikebrad]

Also, in forex, don't you get a cut of the pip's? Kind of like a bookie, right? The affiliate makes money based on how much the guy trades, not whether or not those trades are profitable.

[jeffsmith]

Hello everyone. New here.
My first post goes now

I have in been trading forex for 2 years and all i can vouch for is that forex is not equal to gambling. I say this for 2 reasons:
Firstly, While gambling might be illegal in some parts of the world, forex is legit everywhere.
Secondly, and more importantly, forex is an investment -gambling is not.

[aj2121]

I made $28000 in this year in Forex Affiliation
This is my website
flamingoforex.com
theforexfather.com
For more details contact me.
AJ

[jagan]

Forex market is good, i have idea that people making good money

[RPM Poker]

does gaming traffic convert well with forex?

[jeffsmith]

Friend’s forex market is somewhat similar to poker. The only different is in poker players cannot hold long positions were as in forex they could hold positions. Investment requirement is almost the same.