So does anybody make money trading forex and futures ? ?

Well this is a fairly common question that I’m sure we have all asked at one time or another  – especially during those occasional bad runs !

The simple answer, which is covered elsewhere, is that in trading if one ignores commissions then it is a zero-sum game. What I lose today somebody else somewhere in the world must have gained and vice versa. What makes trading so exciting and attractive is that this redistribution between parties is asymmetric. I.e. there are far more losers in trading then there are winners. At first sight this does not seem very attractive but what it means is that those that do win in trading are collecting all of the losses made by a majority of the participators. It is for this reason that you can make very substantial sums of money in trading. The losers are financing the winners but there are far more losers out there than winners. So for those of us who can get into the winners enclosure will likely make far larger sums of money than we ever could in most other professions or trades.

Most people are aware of this fact but often ask well where are all the winners then ?

Truthfully the big winners tend to keep themselves to themselves in the same way as a lottery winners generally choose not to publicise the fact for a myriad very good reason.

However an article in one of the papers just recently drew attention to the trader Chris Rokos.  Chris is a 41-year-old UK trader that I am sure most of us have never heard of. I cannot say in all truth that he is just a general everyday Joe because for instance he attended  Eton  and  graduated at Oxford.

However in other respects his background and career progression appear fairly normal. The reason I mention Chris is that he is British and lives and trades in the UK. Oh and one other small point I nearly forgot to mention is that he made US$900 million for his personal account between 2002 and 2012 !  So he apparently started minting it when he was actually under 30 years old.

Unsurprisingly he is now moving into starting his own hedge fund and is looking to raise  around $3 billion in starting capital. Clearly his own $900 million gives him a bit of a head start !

He had previously worked for Credit Suisse earning around $55 million their and then moved on to become  the star trader at Brevan Howard which is one of Europe’s largest Hedge Funds.

As a heads up for us all  both of these funds are known as “macro” funds. Theses funds are generally  trading a mix of currencies, shares, bonds and commodities and look to participate and trade in the large economic driven trends that regularly unfold. (no surprise there then)

Now you and I are never going to be in that class although there are plenty out there that are. However the real point is that once you start looking around you will find individuals earning  significant sums of money (say six figures per year plus ) all around you. those sorts of “small”  winners are all around us – a bit like property millionaires.

Probably a  more important point is that when you feed under the table of giants the scraps that fall from those table can still be pretty large !