FOREX TRADERS

[Capitalist]

Yes, I actually began trading retail FX in 2004, not long after I first became active on iHub. Eventually all of my trading activity became concentrated in that one market, with a few rare exceptions over the years. That's also why I migrated away from iHub to one of the major FX related communities.

At any rate, a major takeaway from your prior post is that for AIM, volatility is key. A second may be that the equity market isn't the right place to apply AIM to FOREX, because currencies (and thus their derivative ETFs) move much less than stocks and stock indices in percentage terms.

The allure of the FOREX market isn't in the size of the movements themselves, it's in the LEVERAGE available to take advantage of those movements. Where an equity trader can get 2X leverage, an FX trader can often get leverage in the triple digits. I routinely hold positions that are anywhere from 5X to 10X my account size.

But how to apply AIM? I attempted this in several ways over the years, and occasionally wrote about it here and elsewhere. The issue is that, unlike the securities markets (equities, fixed income, options, etc.) the FX market is a relative value market, i.e. THERE IS NO ZERO. Combined with the high leverage, this makes an uber-contrarian strategy like AIM very dangerous to say the least.

Cryptos, now, are a different story. No leverage, and it's an absolute value market. Look at the volatility of the majors like BitCoin, LiteCoin, and Etherium over the past few years. This is an ideal playground for an AIMer. Forget Lichello's monthly update. Do it daily!

I've tallied too long...gotta run.