Topic: Bitcoin traders, why don't you just trade forex? - page 26. (Read 25308 times)

AyeYo - no reason to jump into conclusions so fast

I'm explaining a very simple case: for that 25 USD account, if you "buy" JPY/USD, you won't get Japanese Yen into your forex account in exchange for those 25 USD! You will only get JPY/USD pair, which you later have to sell anyway in order to get back your USD (higher or lower).

P.S. Don't be so personal, your attitude sucks. I have many years of trading experience in the stock and futures market, not to tell about base economic education. If I'm wrong somewhere - just tell what's wrong, this will be useful for everyone here. Personal attacks are nothing useful.

This. I'm an engineer; if it wasn't for Bitcoin I wouldn't trade currency at all. Doing the required homework for another currency would be less fun and not worth my time.

Clearly demonstrating that you have no idea what you're talking about. 


Currencies are paired because you have to sell something to buy something and vise versa.

You don't buy currency pairs.  You buy the base of the pair by selling the paired curency.   i.e. If you "buy" USD/JPY, you're selling Yen to buy USD.  If you "buy" AUD/USD, you're selling USD to buy Aussie Dollars.  So in your case, the answer to the OP is, "because I have no idea what I'm doing."

That's very true. Also don't forget, in FOREX you don't buy *currency*, you buy "currency pair". In case with BTC, you do a real exchange. You buy USD by selling BTC, or you buy real BTC by selling USD. Forex became a very good simulated game nowadays for small players.

That's why I believe in the BTC market and that's what drives my development of a fast trading platform which is modeled after a real stock exchange, not some hacked during 2 nights amateur stuff.

It's quite simple really:

I understand bitcoin, and I don't understand regular forex.

I have been following bitcoin for almost a year. I know the technology, the community, and the bitcoin economy inside out.   The bitcoin exchanges may be flawed, they may be more risky than other exchanges, but at least those flaws and risks are 100% known to me.

Regular forex lacks transparency. The murky, insider-dominated fundamentals that affect regular forex seem too inaccessible to an amateur trader.

Valid Points.
However, Mt Gox is not the only exchange in existence - point being that people who outweigh benefits over risk of using said exchange, will make do with the time being, and adopt when appropriate.
A pizza place is well established market segment, but Bitcoins are a grey area with Zero, 0, Null, bureaucratic regulations and certifications, in relation to Bitcoin oriented businesses.
Which (current) regulatory body will acknowledge a business that exchanges fiat monies for BTC as a legit exchange?
It is true that they can still be in compliance with all laws, on the other hand, they may have their own agenda for not doing so.

Laws are there to protect you, can you not protect yourself?
You may think this is a bold statement, but it is entirely possible for sensitive activity to occur between trusted parties, without regards to law. I can buy dope from my friend safely and easily even though it illegal.
How does this apply? People who take the time to evaluate the risk, examine their own trust towards who they are trading.
Some, like yourself, who wish for all the walls and thorns to be up already will have to wait for slow bureaucracy to catch up. Others enjoy a web of trust.

Some do wing it and hope for the best. Either way, Mt Gox is not the only exchange, the majority have chosen to use that one, even if its sheep mentality, ignorance to risks, or whatever. It is the reality and to comprehend it you will not succeed by putting forward proposals why it shouldn't be that way.

If you expect for there to be a safety net, you have the up most right. However, you will have to wait for an exchange that wants to be in full compliance with the law, and slow bureaucracy to catch up.
Look for another exchange such as Tradehill, and find out if they are violating some law. If you find they are, why? Surely they have their own reasons, same with Mt Gox. You may conclude scamming but maybe its protection from conflicting laws etc. If there are no good reasons why an exchange might be avoiding certain laws, I'm sure their will be entrepreneurs to start new exchanges that do.

There is definitely room for improvement for a lot of aspects of the exchanges, however that will come with time.

I'm not going to argue if they can do it better, that will be solved by competition.
I was simply stating they can't follow non-existent regulations and certifications in regards to a Bitcoin oriented business.

Also, if its so illegal, why hasn't it been shutdown?

I aboslutely can, because every other legitimate start up business does it.  If the new pizza place down the road from me can begin business in full complance with the law, so can a Bitcoin exchange.  They can collect the proper information from traders, just like a real exchange.  They can submit to regulatory bodies and follow all national laws (using an off-shore bsaed currency trading account is NOT legal for US citizens, for starters).  You know, all that good stuff that every other legit brokerage and exchange goes through.  Real businesses that people plan on sustaining and growing dot all their i's and cross all their t's FIRST.  No one just wings and hopes for the best, unless it's because they plan to be a fly by night scam shop.

MtGox is processing millions of dollars per day, but the website looks like it was made by a five year old, they have no real contact information, they aren't a registered business, they are not in compliance with local or international laws (have fun when your funds are seized and never returned), and there's absolutely zero transparency.

There are scams in every industry, but I'd challenge you to find a non-legit MM these days.


Once again, everything you'd said about FX, and then some, applies to Bitcoin.  Again I ask you, how do you know your MtGox and Tradehill data feeds are even real?

You're worried about trading with FX market makers that have been around and not scamming anyone for 20+ years, but you put full faith in a couple random guys from Japan running an ultra low budget, proven unreliable, trading website that isn't even licensed as a legit business?

In contrast I put only 5 GBP into BTC and traded in multiple times daily whenever I wanted to, so far over a few days.

It took little time to set up but less than a week and was fairly easy to do this using Britcoin and was then even easier to put some of the part bitcoin I had now already purchased with GBP and is in Britcoin into MtGox.

I have 0% charge on each trade, 0% running costs each day, 0% charge for adding or withdrawing money, no or practically no loss due to rounding and 0% trading overhead charges with no additional charges after that.

It's easy to perform a buy/sell and http://bitcoincharts.com/charts/mtgoxUSD#rg2zig1-minzvztgMzm1g10zm2g25 has a good ratio of simple to powerfull showing me to the minute whats happening.

this is untrue, majority of forex markets are unregulated and can and do trade/hedge against you, also they can be run out of some dude's garage. many are just 'games' (software run on servers that you play on), there is very little connection between the servers you trade on and the open market.

to trade on the open market takes 100's of thousands of dollars

There are methods to build trust between parties.

Because Mt Gox is only made of a few, we can know who they are relatively easily. They are not anonymous.

Yes they could still screw us quite easily, but you can avoid disaster if you follow a few rules -

• Don't put all you eggs in one basket (Don't trade only BTC, use several exchanges ?)
• Building trust progressively is your best bet

Which brings me to the point of the OP, people quite possibly are trading both, and there are many reasons why one would trade BTC.
I don't see at all why its so mind-blowing, you don't necessarily have to invest your life savings?

Finally, you can't have expectations of entrepreneurs in a new market to have bureaucratic certifications and be following non-existent regulations.

How do you propose an exchange should be set up for the Bitcoin market?

Who said MtGox doesn't trade against people?  There's no regulation, remember?  No laws against conflict of interest, nothing like that.  Your data provider, broker, exchange, and opposing trader are ALL the same person (like literally one or two guys, not just a business entity) in Bitcoin land.  But yet people think regular FX is too rigged and risky?  

While I'm nervous about the fact that trading on Mt Gox means giving them my USD/BTC, I thought trades were direct against other traders, and they charged commission, rather than trades being with Mt Gox themselves?

^Bitcoin doesn't have margin calls because you aren't trading on margin. 



That's the EXACT same position you're in with Bitcoin trading, which was the point I was making.  At least with a FX bucket shop you've got the law and regulatory agencies on your side, not to mention the fact that you're trading with a real business and not some dude with a server in his mom's garage.

forex has margin calls, bitcoin does not

most 'cheap' forex markets and are unregulated and are just simulated games, your not actually trading on the open market.

OP, why don't you just add bitcoin to your operation?

Coming from a position having of closed my account with Interactive Brokers (who are great, if you're looking for a proper trading account) back in March... Bitcoin is a HELL of a lot easier to learn on. Sure, the volatility is insane, but you're not trading against people with unspeakably more resources than you, or risking nearly as much. Minimum trade was $25k, and typically you wanted to be trading $100k at a time to keep commission low. That's all done on margin, of course, so you're actually trading 50 times as much money as you have as a deposit.

Yes, you can get Forex mini accounts, they're all with market makers where the price you trade is determined by the person holding your money. Even with the few really reputable companies, that's just not a good situation to be in.

We need to trademark this:

"Bitcoins... it's cyberpunk as hell!"

Not in Australia.

If you want to trade the SFE (Sydney Futures Exchange), you will need a minimum of $7000 deposit and then they sting you $50 each way.

Bitcoin has the potential to be THE commodity of choice for learner traders.

Security is overrated when exchanges can change margin requirements at will.  i.e Silver at CME

This has been a nice little online course in trading for me, and I was willing to put up a relatively small number of dollars and earn a very small number of dollars in return. Also as others have pointed out, it's filled with inexperienced traders like myself who don't have experience in the market so I don't feel like I'm in shark infested waters trading back and forth on the exchange. I also don't like the rigged system controlled by bankers with inside information, it's much more of a fair ballgame in that sense for newbies like myself.