7 ms·

Show HN: Forexbook – Automated trading journal that syncs with Metatrader

80 points by chanar 6y ago

willeh 6y ago
Never understood forex trading myself, and I'm by no means a trading professional but it has struck me that most Forex brokers seem extremely shady. Seems like an extremely risky asset class with no natural tendency to go up and to the right. So I'm curious if anyone on HN can explain the thinking behind stuff like this.
- lordnacho 6y ago
  I used to run an FX hedge fund, and I know some people who got into the FX retail broking thing. The FX retail brokers are essentially providing a casino. They aren't really offering investment services, though it may look like that from a legal perspective. FX is also an area where they can give you lots of leverage, which they love because they collect more fees that way. Naturally they market in a certain way to a certain clientele, and that's why it might feel shady, because they tend to use the get-rich-quick marketing toolbox. If you look at FX volatility, the actual stdev of the price moves is much lower than most stocks. It's the leverage that allows you to make it risky. If you can find an edge, it's not much different from any other asset class. Bunch of prices that change, if you can find any predictability, you can make some money. No need to always go one way.
- keyle 6y ago
  Regardless of how shady or legit it looks, make no mistake: the house always wins.
  - arc0 6y ago
    Who is the house, in this case?
    - lbotos 6y ago
      If the forex broker is acting as a dealing desk, then the broker: https://www.babypips.com/learn/forex/different-types-of-brokers https://www.babypips.com/learn/forex/different-types-of-brok... (Most retail forex brokers are DD)
- chanar 6y ago
  Hi willeh, thanks for the comment! Definitely risky area considering how much leverage some brokers do provide. Higher leverage is beneficial if you prefer not to use all available funds for trading and deposit them to your trading account. For example, lets say you are trading with 100 000 account and your risk is based on that amount. You deposit only 10000 to your trading account and take advantage of the leverage while keeping the other 90k safely in your bank account instead of having all of it on your brokers account. The brokers market has evolved in recent years as well and has become much more solid than what it used to be. Thankfully, a lot of solid brokerage firms have entered the market by now. Forexbook will also try to provide some transparency around forex. To start, there's ability to share your trades. As there is no manual trade entry on the app, all trades are as is. For example, the trade example shown on the frontpage can be seen here with greater detail (what broker and if it was Live or Demo account) https://forexbook.com/s/trades/2da6ed44-d1fd-4028-a8a0-3203f42b2336 https://forexbook.com/s/trades/2da6ed44-d1fd-4028-a8a0-3203f... PS! Sharing feature is manual and only you decide which trades to make public. Disclaimer: Maker @ forexbook.com
  - danuker 6y ago
    > Higher leverage is beneficial if you prefer not to use all available funds for trading Can you not lose more than you have in your broker account in any case, with leverage?
    - chanar 6y ago
      In most cases no but after the Swiss franc crash event back in 2015, some brokers went bankrupt because the drop was so fierce and there was no liquidity available at some point to close the trades. Many traders suffered from negative account balances. Events like these happen rarely and they are called as "black swan". https://www.reuters.com/article/us-swiss-snb-brokers-idUSKBN0KP1EH20150116 https://www.reuters.com/article/us-swiss-snb-brokers-idUSKBN...
    - Galanwe 6y ago
      Yes. That is why you are often limited as individual trader to a relatively safe leverage level. Higher leverage is often possible if you post some collateral (often in the form of AAA/gov bonds). The leverage level you are granted is often dependent on the asset class and your experience with it. FX being relatively low volatility, you can indeed get high leverage without too much scrutiny. Overall it is a very lucrative business for brokers. The gathered funding fees are higher than the rare occasional losses. Pretty much like banks when doing loans.
- andysinclair 6y ago
  Whilst stock trading enables you to bet on the price/performance of a company, forex trading enables you to bet on the price/performance of a country/currency. You bet, however, not on a single currency but on a currency pair so you are really betting on how one currency will perform against another currency.
- landerwust 6y ago
  Successful forex folk seem more inclined towards having a strong understanding of economic balance than trading price action directly, but there are those folk too, with the latter being far more common in the casino end of the market. As for 'up and to the right', nobody trades forex with cash. Separately from a purely structural perspective, many kinds of spread trades are possible just like in equities, where either leg may not be another currency pair but some other related instrument (energy, bonds, ..).
- markus_zhang 6y ago
  Most of the retail brokrages (except maybe a few big ones) play a strategy of A/B book. Most customers are in book A which is essentially a casino (bet against the maker), and if someone is too good they just send him to book B to play against the market.
  - nlitened 6y ago
    The naming is vice versa for A- and B-book. B-book is playing against the maker. A-book is playing against the market (which is in fact "playing against a bigger maker down the line")
    - markus_zhang 6y ago
      Thanks! didn't know that
- PortlandMEnerd 6y ago
  What others have said about leverage, standard deviation of prices, A+B book biz models, get rich scheme marketing, finding some sort of predictability is paramount, a tendency to find really bottom of the barrel people running the retail brokerages are all true. The retail FX market is a dark, dark place. I spent roughly half a decade in the space setting up marketing analytic systems and presences for existing and new entrants into the space throughout the world. If you have a shred of humanity in you, I recommend staying the heck away from it minus having a small sum in it if you like testing your understanding of macro economics. Outcomes are very binary and most brokerages have code running to prevent their clients from developing a strategic advantage for that reason. With all that said, amazed anyone put in any effort to make the Metatrader product look pretty. There's 0 money in it. The existing market does NOT like change. Means trying to find a new way to screw everyone else.
  - hu3 6y ago
    > most brokerages have code running to prevent their clients from developing a strategic advantage for that reason I'm curious. How does that work? Perhaps front-running bots?
    - AdrianAvtomat 6y ago
      Not OP, but a broker wouldn't even need a front-running bot. If they're the intermediary (A book) then they can just apply markups to the quotes from their maker. If they're the maker (B book), they're the ones quoting the prices. Front-running is moot in either case. I've heard lots of rumors and wild conspiracy theories about things like this but a lot of it is impractical if not impossible using industry standard platforms and software. I can't even imagine a broker manipulating the quote feed for thousands or tens of thousands of other traders just to hit one guy's stop but that doesn't stop people from being paranoid. Many traders worry about this so much that they won't use stops. Things that are commonly done which could be described that way include delaying orders, changing spreads, and reducing account leverage. There are legitimate purposes for doing these things but the potential for abuse is certainly there. A quick Google for "virtual dealer plugin" will tell you more if you're interested. I've also heard that some brokers will supposedly induce "artificial" slippage but to me that seems like a lot of effort and risk for very little reward unless it's done on a massive scale.
- sitzkrieg 6y ago
  you're quite right, as other comments detail a/b desks but also foul play and such. take a look at fxcm for example, from biggest to banned in the US just like that. looking at the cftc site can be enlightening https://www.marketwatch.com/story/fxcm-banned-by-cftc-after-taking-positions-against-clients-2017-02-06 https://www.marketwatch.com/story/fxcm-banned-by-cftc-after-...
  - sitzkrieg 6y ago
    i should say, retail fx trading is 100% garbage. there is absolutely no reason to do it. trading currency futures which are actually centralized, actually transparent and liquid, all while having drastically better market data and platform options make it a no brainer. but sleezy advertising, low barrier to account creation, lower minimums, less stringent account verification and being able to fund on credit (lol) tends to make sure people who don't know yet what they're doing never get there
  - AdrianAvtomat 6y ago
    The irony of that whole situation is that FXCM allegedly helped draft a bunch of the regulations as big companies are prone to do but the government took them, cranked them up to 11, and killed FXCM with them instead of just their would-be competitors.
- kwere 6y ago
  - forex brokers are (mostly were) shady because forex (since mainstream deregulation in the 90's) is a "gold rush" and brokers are selling the shovels - forex is a speculative asset for traders and a hedge/insurance for companies that manage investiments between differents countries.
andysinclair 6y ago
Looks interesting although there is no indication of who runs the website, who built it etc. I always look for an "About Us" page before signing up for anything like this.
- chanar 6y ago
  Hi andysinclair, thanks for the comment! My name is Janar Palk and I am the maker @ forexbook.com I will add the page in near future. Thanks. You can contact me directly: janar@forexbook.com
  - andysinclair 6y ago
    Thanks for the reply. I have a product in the trading/investing space. What is your plan to get your product in front of potential customers? I find this the hardest part of building/launching a product.
    - chanar 6y ago
      Hi. I know what you are saying, it takes time to find traction but the key is to try out and test different channels. Think of your target customer and where are they most likely to find interest in your product. What you can look into is the "Bullseye framework" - 19 channels to find traction and if you find one, focus solely on it at first. https://medium.com/@yegg/the-19-channels-you-can-use-to-get-traction-93c762d19339 https://medium.com/@yegg/the-19-channels-you-can-use-to-get-...
llampx 6y ago
I have to wonder why and how this is on the front page of HN
- gjvc 6y ago
  because many people in the HN audience want to or do make money trading from home on their computers, and the content of the article matches this audience
  - whimsicalism 6y ago
    > many people in the HN audience want to or do make money trading from home on their computers Really? I thought that HN commentators were typically smarter than thinking they could make money on the Forex market.
    - serf 6y ago
      >Really? I thought that HN commentators were typically smarter ... That's a common sentiment.[0] I've made money on forex, but to be clear -- I made the trade knowing it was a gamble and made out. This isn't smart behavior.. but I'm surely not the only one here. It's a 'hobby' that appeals to people who like to automate and script things, even if the exchanges are actively malicious towards hobbyist-'quants'. [0] : https://en.wikipedia.org/wiki/In-group_favoritism https://en.wikipedia.org/wiki/In-group_favoritism
      - whimsicalism 6y ago
        I don't think it is "in-group bias" to say that if I gave an SAT test to a random sample of HN commentators and then gave one to a random sample of Americans, the HN commentator group would very likely do better.
        fractionalhare 6y ago
        An SAT? Maybe, sure. Forex trading? Doubt the modal HN user would do statistically better than the modal American.
AdrianAvtomat 6y ago
Nice work, I really dig how clean and focused it is compared to most financial tools. What sets Forexbook apart from Myfxbook?

80 points by chanar 6y ago

Never understood forex trading myself, and I'm by no means a trading professional but it has struck me that most Forex brokers seem extremely shady. Seems like an extremely risky asset class with no natural tendency to go up and to the right. So I'm curious if anyone on HN can explain the thinking behind stuff like this.

lordnacho 6y ago
I used to run an FX hedge fund, and I know some people who got into the FX retail broking thing. The FX retail brokers are essentially providing a casino. They aren't really offering investment services, though it may look like that from a legal perspective. FX is also an area where they can give you lots of leverage, which they love because they collect more fees that way. Naturally they market in a certain way to a certain clientele, and that's why it might feel shady, because they tend to use the get-rich-quick marketing toolbox. If you look at FX volatility, the actual stdev of the price moves is much lower than most stocks. It's the leverage that allows you to make it risky. If you can find an edge, it's not much different from any other asset class. Bunch of prices that change, if you can find any predictability, you can make some money. No need to always go one way.
keyle 6y ago
Regardless of how shady or legit it looks, make no mistake: the house always wins.
- arc0 6y ago
  Who is the house, in this case?
  - lbotos 6y ago
    If the forex broker is acting as a dealing desk, then the broker: https://www.babypips.com/learn/forex/different-types-of-brokers https://www.babypips.com/learn/forex/different-types-of-brok... (Most retail forex brokers are DD)
chanar 6y ago
Hi willeh, thanks for the comment! Definitely risky area considering how much leverage some brokers do provide. Higher leverage is beneficial if you prefer not to use all available funds for trading and deposit them to your trading account. For example, lets say you are trading with 100 000 account and your risk is based on that amount. You deposit only 10000 to your trading account and take advantage of the leverage while keeping the other 90k safely in your bank account instead of having all of it on your brokers account. The brokers market has evolved in recent years as well and has become much more solid than what it used to be. Thankfully, a lot of solid brokerage firms have entered the market by now. Forexbook will also try to provide some transparency around forex. To start, there's ability to share your trades. As there is no manual trade entry on the app, all trades are as is. For example, the trade example shown on the frontpage can be seen here with greater detail (what broker and if it was Live or Demo account) https://forexbook.com/s/trades/2da6ed44-d1fd-4028-a8a0-3203f42b2336 https://forexbook.com/s/trades/2da6ed44-d1fd-4028-a8a0-3203f... PS! Sharing feature is manual and only you decide which trades to make public. Disclaimer: Maker @ forexbook.com
- danuker 6y ago
  > Higher leverage is beneficial if you prefer not to use all available funds for trading Can you not lose more than you have in your broker account in any case, with leverage?
  - chanar 6y ago
    In most cases no but after the Swiss franc crash event back in 2015, some brokers went bankrupt because the drop was so fierce and there was no liquidity available at some point to close the trades. Many traders suffered from negative account balances. Events like these happen rarely and they are called as "black swan". https://www.reuters.com/article/us-swiss-snb-brokers-idUSKBN0KP1EH20150116 https://www.reuters.com/article/us-swiss-snb-brokers-idUSKBN...
  - Galanwe 6y ago
    Yes. That is why you are often limited as individual trader to a relatively safe leverage level. Higher leverage is often possible if you post some collateral (often in the form of AAA/gov bonds). The leverage level you are granted is often dependent on the asset class and your experience with it. FX being relatively low volatility, you can indeed get high leverage without too much scrutiny. Overall it is a very lucrative business for brokers. The gathered funding fees are higher than the rare occasional losses. Pretty much like banks when doing loans.
andysinclair 6y ago
Whilst stock trading enables you to bet on the price/performance of a company, forex trading enables you to bet on the price/performance of a country/currency. You bet, however, not on a single currency but on a currency pair so you are really betting on how one currency will perform against another currency.
landerwust 6y ago
Successful forex folk seem more inclined towards having a strong understanding of economic balance than trading price action directly, but there are those folk too, with the latter being far more common in the casino end of the market. As for 'up and to the right', nobody trades forex with cash. Separately from a purely structural perspective, many kinds of spread trades are possible just like in equities, where either leg may not be another currency pair but some other related instrument (energy, bonds, ..).
markus_zhang 6y ago
Most of the retail brokrages (except maybe a few big ones) play a strategy of A/B book. Most customers are in book A which is essentially a casino (bet against the maker), and if someone is too good they just send him to book B to play against the market.
- nlitened 6y ago
  The naming is vice versa for A- and B-book. B-book is playing against the maker. A-book is playing against the market (which is in fact "playing against a bigger maker down the line")
  - markus_zhang 6y ago
    Thanks! didn't know that
PortlandMEnerd 6y ago
What others have said about leverage, standard deviation of prices, A+B book biz models, get rich scheme marketing, finding some sort of predictability is paramount, a tendency to find really bottom of the barrel people running the retail brokerages are all true. The retail FX market is a dark, dark place. I spent roughly half a decade in the space setting up marketing analytic systems and presences for existing and new entrants into the space throughout the world. If you have a shred of humanity in you, I recommend staying the heck away from it minus having a small sum in it if you like testing your understanding of macro economics. Outcomes are very binary and most brokerages have code running to prevent their clients from developing a strategic advantage for that reason. With all that said, amazed anyone put in any effort to make the Metatrader product look pretty. There's 0 money in it. The existing market does NOT like change. Means trying to find a new way to screw everyone else.
- hu3 6y ago
  > most brokerages have code running to prevent their clients from developing a strategic advantage for that reason I'm curious. How does that work? Perhaps front-running bots?
  - AdrianAvtomat 6y ago
    Not OP, but a broker wouldn't even need a front-running bot. If they're the intermediary (A book) then they can just apply markups to the quotes from their maker. If they're the maker (B book), they're the ones quoting the prices. Front-running is moot in either case. I've heard lots of rumors and wild conspiracy theories about things like this but a lot of it is impractical if not impossible using industry standard platforms and software. I can't even imagine a broker manipulating the quote feed for thousands or tens of thousands of other traders just to hit one guy's stop but that doesn't stop people from being paranoid. Many traders worry about this so much that they won't use stops. Things that are commonly done which could be described that way include delaying orders, changing spreads, and reducing account leverage. There are legitimate purposes for doing these things but the potential for abuse is certainly there. A quick Google for "virtual dealer plugin" will tell you more if you're interested. I've also heard that some brokers will supposedly induce "artificial" slippage but to me that seems like a lot of effort and risk for very little reward unless it's done on a massive scale.
sitzkrieg 6y ago
you're quite right, as other comments detail a/b desks but also foul play and such. take a look at fxcm for example, from biggest to banned in the US just like that. looking at the cftc site can be enlightening https://www.marketwatch.com/story/fxcm-banned-by-cftc-after-taking-positions-against-clients-2017-02-06 https://www.marketwatch.com/story/fxcm-banned-by-cftc-after-...
- sitzkrieg 6y ago
  i should say, retail fx trading is 100% garbage. there is absolutely no reason to do it. trading currency futures which are actually centralized, actually transparent and liquid, all while having drastically better market data and platform options make it a no brainer. but sleezy advertising, low barrier to account creation, lower minimums, less stringent account verification and being able to fund on credit (lol) tends to make sure people who don't know yet what they're doing never get there
- AdrianAvtomat 6y ago
  The irony of that whole situation is that FXCM allegedly helped draft a bunch of the regulations as big companies are prone to do but the government took them, cranked them up to 11, and killed FXCM with them instead of just their would-be competitors.
kwere 6y ago
- forex brokers are (mostly were) shady because forex (since mainstream deregulation in the 90's) is a "gold rush" and brokers are selling the shovels - forex is a speculative asset for traders and a hedge/insurance for companies that manage investiments between differents countries.

andysinclair 6y ago

Looks interesting although there is no indication of who runs the website, who built it etc. I always look for an "About Us" page before signing up for anything like this.

chanar 6y ago
Hi andysinclair, thanks for the comment! My name is Janar Palk and I am the maker @ forexbook.com I will add the page in near future. Thanks. You can contact me directly: janar@forexbook.com
- andysinclair 6y ago
  Thanks for the reply. I have a product in the trading/investing space. What is your plan to get your product in front of potential customers? I find this the hardest part of building/launching a product.
  - chanar 6y ago
    Hi. I know what you are saying, it takes time to find traction but the key is to try out and test different channels. Think of your target customer and where are they most likely to find interest in your product. What you can look into is the "Bullseye framework" - 19 channels to find traction and if you find one, focus solely on it at first. https://medium.com/@yegg/the-19-channels-you-can-use-to-get-traction-93c762d19339 https://medium.com/@yegg/the-19-channels-you-can-use-to-get-...

llampx 6y ago

I have to wonder why and how this is on the front page of HN

gjvc 6y ago
because many people in the HN audience want to or do make money trading from home on their computers, and the content of the article matches this audience
- whimsicalism 6y ago
  > many people in the HN audience want to or do make money trading from home on their computers Really? I thought that HN commentators were typically smarter than thinking they could make money on the Forex market.
  - serf 6y ago
    >Really? I thought that HN commentators were typically smarter ... That's a common sentiment.[0] I've made money on forex, but to be clear -- I made the trade knowing it was a gamble and made out. This isn't smart behavior.. but I'm surely not the only one here. It's a 'hobby' that appeals to people who like to automate and script things, even if the exchanges are actively malicious towards hobbyist-'quants'. [0] : https://en.wikipedia.org/wiki/In-group_favoritism https://en.wikipedia.org/wiki/In-group_favoritism
    - whimsicalism 6y ago
      I don't think it is "in-group bias" to say that if I gave an SAT test to a random sample of HN commentators and then gave one to a random sample of Americans, the HN commentator group would very likely do better.
      - fractionalhare 6y ago
        An SAT? Maybe, sure. Forex trading? Doubt the modal HN user would do statistically better than the modal American.

AdrianAvtomat 6y ago

Nice work, I really dig how clean and focused it is compared to most financial tools. What sets Forexbook apart from Myfxbook?