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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To think that this is gambling

28 replies

Pippintea · 01/03/2014 01:13

My brother in law (my younger sister's husband) is in the process of folding his business and trading on the FOREX (foreign exchange currency) market.
My sister is all for it and thinks that they will soon be living in luxury. He's not a stupid man (or so I thought) and has a degree in maths but AIBU to think it's just gambling? A simple google search doesn't make it look good.

OP posts:
HowBadCanThisGet · 01/03/2014 01:26

It is gambling, but so is being a stockbroker. The problem now is we have all seen the mess the banks can make of it we feel a little wary.

Troglodad · 01/03/2014 01:32

Oh dear. Lots of ponzi schemes sucking people in atm with tales of high yields from forex, screwing them for everything - as well as plausible "systems" that don't work.

Original poster
Pippintea · 01/03/2014 01:37

My thoughts exactly trog
Having sleepless nights worrying that he'll gamble away their house :(

OP posts:
AgentZigzag · 01/03/2014 01:46

From my very, very limited experience of shares etc the best advice I thought on how to choose what to buy was to pick a name out of a hat.

You could make money if you were playing the long game and only gambling as much as you can afford to lose, but never knowing how much and the time to do it makes it a huge risk.

I don't think you can say anything though because they've made the choice, if you push it you'll push them away and then cut off a line of support your sister might need.

It's definitely not worth falling out with them over, and I can't see any way of you saying it without them thinking you've overstepped the line.

Original poster
Pippintea · 01/03/2014 07:09

Agent You are right in everything you say.
I can't see any way of you saying it without them thinking you've overstepped the line. This is what is worrying me. They have convinced themselves that it is a good way to make money and lots of it. Greed and stupidity :(

OP posts:
CogitoErgoSometimes · 01/03/2014 08:35

I'd say something to your Dsis. Rule of thumb with putting money into the stock market, FOREX or anything else highly risky in the financial sense, is to only invest what you can afford to lose. So not the family home... Hmm 'If it seems too good to be true, it probably is' and all that.

They won't listen but when it all goes tits up, at least you have a clean conscience.

TCforTopCat · 01/03/2014 08:44

Yes it is gambling, even the Forex traders in Investment Banks with the best information and the best brokers and a constant stream of corporate trades can lose money.
They should be very careful, and only risk what they can afford to lose.
If it was as easy as they seem to think then we would all be living in luxury Grin

DarlingGrace · 01/03/2014 08:51

Depends whether he has insider information. He'd be better trading on the commodities and futures markets IMHO but he will trade where he feels he knows the market best. You have to be very on the ball with world politics though, understand all the historical nuances as well as the impact of freak weather conditions.

He might become another George Soros (but I doubt it) who is worth 29 billon net these day.

Some people can work it, some people will encounter unlucky circumstances.

Oriunda · 01/03/2014 08:52

I buy and sell shares, commodities and funds for mine and DS' accounts. Background in City on dealing desk. Does that make me a gambler? Some stuff is down and some I have made lots of profit on. I'm taking the long view, especially for my DS' isa and pension fund.

OP do you have a pension fund? Whether you run it yourself like I do or let a scheme do it for you it is still 'gambling' that the shares bought will rise.

Given that your BIL has a maths degree he can't be stupid and one hopes will be fully informed on what admittedly is a much riskier market. Wish him well in his venture, hope he doesn't bet the house and be there for your sister if it goes wrong.

SabrinaMulhollandJjones · 01/03/2014 08:59

It's hard to consistently make money on the Forex, and yes it is akin to gambling.

DH works for a global trading firm, and says Forex is one of the hardest ways to make money in trading. In fact, he says it's one of the easiest ways to lose money. There are plenty of scam schemes about as well.

I would speak to your sister in confidence - Forex is not a road paved with gold.

SabrinaMulhollandJjones · 01/03/2014 09:13

OP: Make sure your sister reads This Article before she starts mentally spending the money.

Hoppinggreen · 01/03/2014 09:53

We buy shares but only with money that we can afford to lose.
If they are hoping to use to it pay the mortgage etc it is risky. The only safe way would be to keep capital and profit separately?

Original poster
Pippintea · 01/03/2014 11:59

Thanks for your replies! I've come across far more negative reviews than positive.
I just don't get this thirst for making big money and have a horrible feeling they are making a mistake.
I just hope they haven't fallen for a scam. As I said earlier, I never put them down as stupid but maybe they are.
However, it's their life and they will do what they wasn't in the end! :(

OP posts:
Original poster
Pippintea · 01/03/2014 12:00

want

OP posts:
AgentZigzag · 01/03/2014 13:21

Is it possible your sister's going along with it to keep the peace/support him but will take action if she thinks he's taking too much of a risk?

mummymeister · 01/03/2014 13:47

so Op they are going to do it. they have the pound goggles on and cant see any sense at the moment. the best thing that you can do is help them to protect their home in all of this. Not sure exactly how they do it but someone clever on here will know. you did it so that he can bet it away unknowingly of your sister. if it was a such a sure fire money making scheme why isn't everyone doing it. that's the main point I guess.

FraidyCat · 01/03/2014 14:03

Any kind of trading (it's not the same thing as investing) is gambling in the sense that you are making money by taking it off other people who are stupider or slower than you. (If you invest in shares the underlying profit of companies is a source of funds, so other people don't have to lose for you to gain.)

Where markets are liquid and global, you have to not just be clever, but cleverer and quick than 99% of the clever people in the world who are trying to do the same thing. If you are that good, you get to take money out of 99% who are destined to lose money.

Usually people get into trading via a spread-betting account. A spread-betting company always takes the other side of whatever trade a customer chooses to make. IG Index, in a customer pamphlet I saw long ago, said that it does not bother them when customers win, as they hedge their trades in the underlying market. IG Index, in their prospectus when their shares were listed, said that they try as far as possible not to hedge customer bets, because experience has taught them that customers will generally lose money, so by taking the other side of whatever customers choose to do, they will make money.

HelpfulChap · 01/03/2014 14:10

It is gambling but at least you can make informed decisions about the positions you take.

In my many years in the game I have learned that the three most important things are, timing, discipline and deep pockets.

There is no such thing as free money.

caroldecker · 01/03/2014 14:19

helpful you can make informed descisions at the races - forex trading is a zero sum game - the total market makes no profit, just shares the money amongst the participants, so pure gambling.
Investing in shares is different as the underlying companies are making a profit, so the overall value goes up - therfore all can profit (although not all do)

turkeyboots · 01/03/2014 14:25

FiL lost most of his retirement funds on spread betting and Forex. A huge amount of money gone in 2 years. He swore blind that he was clever and had a system, only a fool could lose money. There was no talking to him at the time and he is still dabbling despite his massive losses and near destruction of his marriage.

PPaka · 01/03/2014 14:36

I knew this would be about FX
There are trained professionals who could use all their skills, knowledge and experience and still lose their savings on this. I would worry about an amateur.

The actual FX market is not pure gambling though, there is a global requirement for it

WorrySighWorrySigh · 01/03/2014 14:37

It is actually negative-sum because of the fees subtracted on the trades. Effectively the pot gets smaller until a new mug participant enters the market.

The fact that the OP's DSis & DBiL are pushing wholesale into this rather than starting small and building up implies to me that they have been suckered into a scheme.

The problem with this is that the people selling these schemes look for the easily suckered. Often these are in theory intelligent people who are used to being the cleverest person in the room. They are easy marks because of a combination of greed and conceit.

If it is a boiler room scheme then they may be allowed to win a bit to start with. This will then be followed up with losses which will require further investment to 'work through'

OP be very careful if you are offered a 'buy' into anything. Keep you purse in your pocket.

PPaka · 01/03/2014 14:38

Oh, and I wouldn't trust anyone's system or sure thing

kim147 · 01/03/2014 14:56

This reply has been deleted

Message withdrawn at poster's request.

nickymanchester · 01/03/2014 15:01

Learning to do this sort of thing well enough to make a living at it takes a very long time and some deep pockets.

I know somebody who is doing reasonably well at it now, but this is after about two or three years of more or less breaking even or making small losses or gains overall.