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I believe it is possible...

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  #1  
Old 18-08-2009, 10:53
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Location: Pretoria South Africa
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Default I believe it is possible...

I believe it is possible to "corner" the market. A few years back I was playing with an idea and I doubled my demo account within a week - without high risk, I might add. The reason that I have not persued it any further was twofold:

1) I was not sure whether such trading was allowed on a live account and
2) I cannot descibe to a third party how I do it. If I cannot describe the trades to someone, can I do it again? I don't know, but I started yesterday with an account of $6200 and built it up to $6700. There was no losing trade. Then Metatrader bombed out on me and I lost the account number and password.

I installed FXDD MT4 again and started over. The balance of $5000 now stands at $5048 and there is still no losing trade. I need someone to help me verbalize what I'm doing and to make sense of it all.
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  #2  
Old 18-08-2009, 11:31
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Location: Greater Kansas City Area
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Henry,

There is no question a market can be cornered. There is also no question that you, an independent trader have no chance of cornering the foreign exchange market. At least not in the traditional sense. You lack both the capital and resources to do so. You cannot possibly buy up all available currency and then hold a pair hostage in an attempt to drive up its value. The spot market is not like, say, the corn market where a person of considerable means could conceivably purchase all available futures interests and then refuse to sell thus driving up the price.

The problem most who have attempted a corner run into is liquidating the position. Once speculators realize the fix is in the buying dries up and the owner of the contracts is forced to sell into a market with no support. Many great traders have gone broke attempting to corner a market.
In regards to your trading system:

1. If you cannot clearly articulate what you are doing I find it difficult to believe you have an actual system. (This is not an attempt to discredit you; it is simply my observation having assisted many traders in trade plan development.)

2. 1-2 days of positive results is not adequate to suggest the system is profitable. The sample size must be large enough to cover a variety of trading conditions.

If you need help clearly defining your rules for entry, exit, stops, etc. I am happy to take a look at what you are doing and give you some feedback, but simply posting your equity curve for the past 40 trades does not help.
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  #3  
Old 18-08-2009, 12:12
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Join Date: Mar 2009
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Quote:
Originally Posted by ForexGuy View Post
Henry,

There is no question a market can be cornered. There is also no question that you, an independent trader have no chance of cornering the foreign exchange market. At least not in the traditional sense. You lack both the capital and resources to do so. You cannot possibly buy up all available currency and then hold a pair hostage in an attempt to drive up its value. The spot market is not like, say, the corn market where a person of considerable means could conceivably purchase all available futures interests and then refuse to sell thus driving up the price.

The problem most who have attempted a corner run into is liquidating the position. Once speculators realize the fix is in the buying dries up and the owner of the contracts is forced to sell into a market with no support. Many great traders have gone broke attempting to corner a market.
In regards to your trading system:

1. If you cannot clearly articulate what you are doing I find it difficult to believe you have an actual system. (This is not an attempt to discredit you; it is simply my observation having assisted many traders in trade plan development.)

2. 1-2 days of positive results is not adequate to suggest the system is profitable. The sample size must be large enough to cover a variety of trading conditions.

If you need help clearly defining your rules for entry, exit, stops, etc. I am happy to take a look at what you are doing and give you some feedback, but simply posting your equity curve for the past 40 trades does not help.
:D I agree. One day's data is not enough, but I did it a long time ago and stopped for the reasons outlined in the first post. I started again yesterday to see if my theories will hold up. It's very intensive trading though. I will take this account, which now stands at $5129 and see what I can do with it. I do not want to post the trades yet, because I need to cross a certain threshhold first.

BTW, I also think "cornering the market" is the wrong term :D I am aware of the economics as you explained it.

Last edited by Henry; 18-08-2009 at 12:18.
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  #4  
Old 18-08-2009, 12:32
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Join Date: Aug 2009
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Well, would I be correct to say that in 1992 the Hungarian George Soros, taking advantage of the devalued British pound Sterling, did precisely this when he made $1 billion in a day?! Of course, there is no way your average Joe retail trader can do the same, but I believe that here is proof that it has been done before.

First post here, i just wanted to say that I am an avid Forex Magnates reader. Good luck for the "unison" of these two sites!
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  #5  
Old 18-08-2009, 12:52
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Join Date: Aug 2009
Location: Greater Kansas City Area
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Oben,

While I am familiar with the trade I am not familiar with the intricacies of what happened.

You are right in your assertion that, with adequate capital, you could create a buying (or selling) frenzy and then sell into the hype. But in order to do this you would need a massive amount of capital. (The kind Soros has.)

I was attempting to illustrate the point that 1. It is very difficult if not impossible to corner the currency market. And 2. That most who have tried have failed.

Excellent "real world" example though. Well done!
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  #6  
Old 18-08-2009, 13:09
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Join Date: Feb 2009
Location: Wisconsin
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How about some screen shots? So we know what you are trying to explain.
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