Aren't there reasons which CAN exist that would cause one currency to rise or fall in relation to another currency over a several month or several year period?
Of course. That happens every instant. You just can't anticipate them and win on balance. Ahhaha's Uncertainty Principle: You can get when right or you can get to what degree, but you can't get them both right, and you need both to make money. This principle is subtle and complex, can be written mathematically, is equivalent to both Heisenberg';s Uncertainty Principle, and some Random Walk process.
If you can define and identify such conditons, why could one not trade currencies?
Show me. You wouldn't believe nor understand a formal answer, so you will have to show me. Get out the old Parable of Lazarus(Luke 16):
"Then the poor man said, I pray thee therefore, father, that thou wouldest send him to my father's house. For I have five brethren; that he may testify unto them, lest they also come into this place of torment. Abraham saith unto him, They have Moses and the prophets; let them hear them. And the poor man said, Nay, father Abraham; but if one went unto them from the dead, they will repent. And Abraham said unto him, If they hear not Moses and the prophets, neither will they be persuaded, though one rose from the dead."
Let me ask you this. How successful has Buffett been with his short dollar position?
Anything with a varying value should be tradeable
You have it quite the opposite. You can't trade unless volatility is low. When volatility is low a trend develops because players must hold to gain. When they trade to grab a few cents out of volatility, they create the volatility that defeats them and this is independent of fundamental forces.
...albeit not neccesarily successfully.
Guaranteed to be perfectly unsuccessful. That's why everyone eventually quits trading. EVERYONE. They find that they lose on balance. No matter how big the swings, the swings in the other direction are larger, and the net is negative. This is what we call in math, a negative expected return. |
