Choosing A Broker For My Situation

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Old Sep 25, 2017, 6:19pm   #1
Joined Sep 2017
Choosing A Broker For My Situation

Hello folks!
I need a little help with learning more about choosing a broker.

I will give as much relevant information about myself as I can, including my situation and my understanding so far and hopefully you fine folks could throw me a few opinions and/or suggestions based on experience (i'd like to know why you suggest whatever). If you need more info then I am happy to provide it (unless you are a Nigerian prince who wants my bank details in order to lodge in 1.8 million euro for whatever reason

Learning how to trade for: 5 months
Current Broker: Oanda (only one i've tried)
Previous business/economic experience: None, but I do have a Psych degree which helps
Current markets being traded: Forex and Oil
Capital available when ready to pull the trigger: €1,000

As far as I can see Oanda is one of these market makers, which means that they are not putting my trades onto the exchange, but instead have me trading on their in-house "exchange"? Obviously as the other side of my trade they have a conflict of interest but since I am aware of this, it's ok...to a point of course.
I would however like to assess my options, keeping in mind that as someone with limited capital I would prefer alternatives which would allow me to open a live account for no more than €100 or so...I insist on continuing to practice on a mini live account so I gain the invaluable experience of having real money on the line.

I have no emotional attachment to spread betting, I merely want to day trade and it just so happens that the first place I found that allowed me to play for cheap was a spread betting broker (likely why they let me in for cheap) and what they offered was predominantly Forex.

I learned a lesson today about triggering take profits (TP).
I have wondered in the past why my TP's were not always being triggered when the price moved past the TP threshold... Today I found out that the price needed to pass the TP by however much the spread required it to (the bid if short and ask if long).

This got me thinking... What alternative forms are available to me for around €100.

- Are there brokers with fixed spreads?
- With as little €100/€200, can I trade on a commission basis instead of paying a spread?
- Would trading via a pay by commission basis eliminate this situation with my TP's? (where price must pass the TP by a distance determined by the current spread)

What would you suggest for me to look into based on all of this?

Thanks in advance!
I am sorry if my terminology is not up to par...as I said, I'm still learning

Also, I require leverage...

Last edited by Nowler; Sep 25, 2017 at 6:24pm.
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Old Sep 25, 2017, 8:19pm   #2
Joined Nov 2016
You say
"where price must pass the TP by a distance determined by the current spread"
but there is a bid price and an ask price, not a single price.

If you are in a true market, an exchange for example, it's possible to get filled at the ask, you don't need to necessarily wait for the bid price to move up to that ask. But equally it's possible you won't be filled if the bid never gets that high. No guarantee of being filled with limit orders.

Also, although there are FX futures trading on an exchange, the Forex market as a whole doesn't have a single exchange.

Last edited by seekingTruth16; Sep 25, 2017 at 8:40pm.
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Old Sep 25, 2017, 9:26pm   #3
Joined Sep 2017
Nowler started this thread
Quote:
Originally Posted by seekingTruth16 View Post
You say
"where price must pass the TP by a distance determined by the current spread"
but there is a bid price and an ask price, not a single price.

If you are in a true market, an exchange for example, it's possible to get filled at the ask, you don't need to necessarily wait for the bid price to move up to that ask. But equally it's possible you won't be filled if the bid never gets that high. No guarantee of being filled with limit orders.

Also, although there are FX futures trading on an exchange, the Forex market as a whole doesn't have a single exchange.
Thanks for the reply and for explaining that.

Have you anything to add in regards to choosing a broker?
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Old Sep 25, 2017, 10:07pm   #4
Joined Nov 2016
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Originally Posted by Nowler View Post
Thanks for the reply and for explaining that.

Have you anything to add in regards to choosing a broker?
I don't want to advise a broker, and I don't know the minimum amounts you would need to trade with various options.

I think most would say that it is typically better to trade a real market with transparency and fairness, like an exchange (some exchanges have been accused of unfairness too). But if that option isn't available to you, then the next best is to make sure your account is protected/guaranteed with a broker. So no dodgy firms that can go bankrupt and you've suddenly lost all your money. Then make sure you know what you're doing and understand the rules of the game.

Why do you want to day-trade with 1000? It sounds like a fast way to lose 1000
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Old Sep 26, 2017, 12:59am   #5
Joined Sep 2017
Nowler started this thread
Quote:
Originally Posted by seekingTruth16 View Post
I don't want to advise a broker, and I don't know the minimum amounts you would need to trade with various options.

I think most would say that it is typically better to trade a real market with transparency and fairness, like an exchange (some exchanges have been accused of unfairness too). But if that option isn't available to you, then the next best is to make sure your account is protected/guaranteed with a broker. So no dodgy firms that can go bankrupt and you've suddenly lost all your money. Then make sure you know what you're doing and understand the rules of the game.

Why do you want to day-trade with 1000? It sounds like a fast way to lose 1000
Cheers.
I'll certainly look even deeper when I decide to deposit significant money but from what I can see Oanda seem to be regulated.

To answer your question.
I would rather swing trade with 100k but that's not realistic.

I can certainly deposit €1k when I feel I'm ready to do so, maybe 2, possibly 3 at a push.

Why I want to day trade?
Because I enjoy it and from my experience so far I see room to make good money from it.

I am not one of the "90%"
I have put on a lot of trades over my 5 months of trading and while I did go as low as 42.5% of my initial capital, my capital is now back to 56.05% of that starting amount.

I'm saying this because I feel like you might be seeing me in the same light as those who think they can make millions in no time at all with a starting capital of 1k.

I realise that €1000 is very little to start with and I know how to apply a good level of risk management. I just need to keep encountering real life scenarios that require me to analyse and act on... building solid trading schemata. Hence my presence here looking for more info.
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Old Sep 26, 2017, 9:07pm   #6
Joined Nov 2016
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Originally Posted by Nowler View Post
Cheers.

I am not one of the "90%"
I have put on a lot of trades over my 5 months of trading and while I did go as low as 42.5% of my initial capital, my capital is now back to 56.05% of that starting amount.
Does this mean you lost 44% in 5 months?
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Old Sep 26, 2017, 9:42pm   #7
Joined Sep 2017
Nowler started this thread
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Originally Posted by seekingTruth16 View Post
Does this mean you lost 44% in 5 months?
Not quite sir, I actually lost as much as 58.5%... I then grew my account back so that I am now up to 58% of my starting capital (down 42%).

Keep in mind, this is only a €20 mini account.
I wouldn't dare put much money on this yet as I am still in the experimental stage. I wouldn't treat a big account the same way. Though I do utilise stop losses all of the time, either through actual stop losses or direct hedging.

I've started a trading journal in the journals section of this forum if you would like to have a better understanding of my situation. It's called "Nowler's Trading Journal"
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Old Sep 28, 2017, 7:52am   #8
 
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Joined Sep 2017
Nowler,

I know nothing in regards to Oanda, sorry for lacking any valuable input on that part.
However as you asked for tips in regards to your situation:

I'd recommend to use a trading diary and to track everything you do. One free option is Tradebench. Find out how much commission you're paying percentage wise and if its even realistic to make back that amount with your trades.

One example..My younger brother started trading stocks with 1K$. His broker charged 5$ per trade, 10$ per roundtrip. That 10$ is 1% per trade. Now imagine, on average he made 3 trades per week due to PDT. That cost him 3% in trading fees. 52 weeks in a year, thats 156% return per year that he would have to make to remain at initial balance.

It's a bit harder to track this in forex, but please make sure the odds are not stacked against you, when starting out. In my brother's case, had he used 10K to trade with, total annual commissions would only amount to 15,6%..which in itself is also a very large number, but reachable for a day trader.
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