As for drawdowns, one has unrivaled experience with same. One would never play poker with men named Doc i.e. don't trade in inactive markets. Do you really wish to trade against people like Jeff who know their markets inside out including the freight car loadings in Kansas City each day. One would extend that to "don't trade markets where the top feeders take out 8 or 10 billion a bank, i.e. currencies. Whichever way you go, the market will go opposite with volume.

Anatoly Veltman writes: 

I respectfully disagree on staying away from FX:

1. Very liquid
2. Not a zero-sum!!

The only prohibitive thing is a very short-term orientation, given revelation of Virtu prowess. Virtu's record of 1282 straight wins must not be alone within the market-making community.

anonymous writes: 

I will go with Vic. I haven't seen, if not a very few, winners in Forex either big or small, except of course those with unlimited funding.

Larry Williams writes: 

One more with Vic with some hard evidence…look at all the real $ trading contests the Forex and Option buys never do as well as the future traders.

Hernan Avella writes: 

Regarding the Forex-Drawdown discussion:

There are 10-15 top feeders in spu that average 400K/day, don't play their game (See Andrei Kirilenko's paper

I found that to make consistent profits in Forex you have to completely forget the methods that made you money in spu, bond et al.

I know 2 guys that make consistently good money in Forex (~ 8 years). It's the only market they ever traded, they have an excellent quote aggregation software and they specialize in "momentum ignition".

anonymous writes:

In many games a good reason for playing tougher opposition is not to win, but to learn what can't be learned beating up on amateurs. Just got to keep the cost of tuition at a reasonable level.


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