Last week I called a broker to inquire about futures trading, particularly cbot. He commenced to telling me about forex and sent me a 10,000 trial account with charting and realtime feed. FX accu-charts. Having never had real-time feed or charting, I was impressed. The question is this. I know nothing of forex except that it is 2 seperate monies against each other. So I decided to place an order to bid GBP against USD. As soon as I clicked to buy/ sell, the order was filled immediately. When I closed the order, it also was just as fast. Is it really that fast? Or is this just a simulation of how to place an order? And also how much does it cost to trade forex mini? What is the cost based on? I'm not looking for easy answers, just good direction....
Mike,
This guy is trying to get you into fx because he probably makes more copmared to futures. There are futures brokers in the who also provide free realt-ime data, charts, etc, eg
Dorman Trading,
Dorman Trading
Mirus Futures,
MIRUS FUTURES. Registered Futures Broker. NinjaTrader with Zen-Fire.
Openecry,
Online Futures Trading - Open E Cry ™ a Direct Access Trading System
Yes, it is fast.
Good luck,
Grant.
This guy is trying to get you into fx because he probably makes more copmared to futures. There are futures brokers in the who also provide free realt-ime data, charts, etc, eg
Dorman Trading,
Dorman Trading
Mirus Futures,
MIRUS FUTURES. Registered Futures Broker. NinjaTrader with Zen-Fire.
Openecry,
Online Futures Trading - Open E Cry ™ a Direct Access Trading System
Yes, it is fast.
Good luck,
Grant.
Rhody Trader
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Speed can vary from broker to broker, but generally speaking forex fills are fast. It's all done electronically (like e-futures contracts). Depending on your broker, there may or may not be a "cost" for forex trading - meaning a commission. Some do charge. Others don't. You'll want to explore more on that subject.
Mathemagician
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The cost associated with forex trading is a hidden cost. You're guaranteed slippage of X ticks per trade which the dealer pockets. That's why they don't need to charge commissions directly.
jj
My 2 cents of advice (I'm trading everything that trades for many years);
(1) If you have no trading experience do not start with forex. Start small in futures, like mini contracts and do ONLY 1 contract at a time until you get a feel of what is happening in that crazy world.
(2) Forex is fast but I will tell you my experience when I was trading mini contracts: During fast markets the broker may shut down the platform and focuss on big contracts. Other brokers may widen the bid/ask spread significantly to the point you cannot make any money. This happens because during fast markets they can lose money since everyone follows the trend and they have open positions, being a counterparty to their own customers most of the time.
(3) Volatility in forex is high and when combined with leverage forces traders who understand money management to trade small size and thus diminish their potential to make good returns unless they want to gamble their money away. The mean life of a 10k account is six months or less unless one is knowledgeable and experienced with money management.
(4) Yes, there are people who make money in Forex but they have invested a good deal in educations and have already paid their dues in terms of losing money in the beginning to learn the markets.
(5) Simulated forex has nothing to do with real forex trading. If you take a 100 big lot position in simulated trading (100 x 100,000) nobody will go after you. If you do the same in real forex someone will go after you and with good probability it will be your counterparty with huge reserves behind it to move the market against you significantly, unless you are very smart and know your timing well to avoid that.
Good luck,
Alex
Rhody Trader
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This assumes trading through a market maker and not through an ECN. The latter don't take pips, but rather commissions.
As for calling it guaranteed slippage, that's a bit over the top. All markets operate on a bid/ask basis so in all of them you have instant slippage. If I put on a trade in the mini S&Ps I'm automatically down a quarter point. Most folks don't call that slippage, though you could certainly make the argument they should.
Rhody Trader
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I have never had a platform "shut down" on me during a busy time the way you suggest. Also, you talk specifically of the market makers but fail to include the ECN brokers who just pass through. They don't influence spreads. Nor do they have any motivation at all to shut down.
And let's not forget about fast market conditions in futures. Talk about a way to rip folks off with no recourse.
More correctly stated "volatility in forex is high when conbined with leverage" (no and). By comparission, the movement of exchange rates is small. It's just that leverage amplifies it.
As for that diminishing the potential for return, I'm not buying it.
Won't argue that!
Not for nothing, but $10mm in forex is not a big position. It's not going to get run. It won't even blip on prices in most cases. If you're worried about a broker counter-party taking you out, trade through an ECN.
I don't think yesterday's 1.3% rise in EURUSD can be called small. If a company was to repatriate earnings from USD today, losing 1.3% in a day is too much.
Or you would call the rise of EUR in just a few months from 1.35 abouts to 1.59 small? This is a 17% change in just a few months. Exchange rate movements, especially in EUR, AUD, NZD and GBP have been huge lately, no matter what time period one considers.
Even with 0 leverage, the losses are very big. In EURUSD over 15% in just a few months. Imagine a European who bought US treasuries, made something like 4% and must exchange the funds back to EUR for some reason. No leverage, but the loss is over 10%.
Small is a matter of risk aversion and relative. For small account holders, like $ 10K, a 10% drop in a currency with zero leverage for example accounts to 1K, and nobody has ever cried over 1K loss.
But for a multinational corporation trying to repatriate 100 Million, 10% is a whopping 10 Million and can make the difference in bottom line and dividend payments.
No, I do not agree, currency exchange rates look small but in reality are very high.
Alex
I would like to add to the original question that I asked yesterday. While using the demo forex trading I put an order in and it's filled. 2 minutes later with as little as 30 dollars profit, I get out. I'm aware it's all simulation and practice but just how authentic is it to live order execution? And is it really, beit small, 30 dollars profit. I'm not saying it's that simple but there has to be more for someone on the other end (broker) to cut in on it. FWIW thanks for all who have given input...
Rhody Trader
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I call exchange rate moves relatively small because a 1% move in a single day is generally an above average one and 5% moves are rare in the extreme. Compare that to something like stocks where 1% moves are commonplace and 5% moves not all that unusual either.
Rhody Trader
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What you describe sounds perfectly normal - at least in terms of the excution and whatnot. The real trick, of course, is to consistently make that $30.
montpro
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I can vouch for that! I have been looking at forex trading for the last 6-8 weeks now and have dwindled a pot of £2,500 down to a measly £100 due to making small - losing big. I must admit I have broken a few of the golden rules but on the whole I think my losing positions are all down to being underfunded from the start, I put in 300, 300, 400, 1000 and 500. I now know that I should have put in the whole 2,500 in one go and stuck by the rules for beginners. I am now considering putting in 10k and just trading 100 at a time. I have been mainly daytrading GPB/CAD (which I now know was wrong), can anyone give me any advice considering the above with regards to where I am going wrong and what I should concentrate on moving forward.
Many thanks
Many thanks
nine
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montpro,
As much as you accept the advice I am about to give you will probably not do it in practice. Not doing it will extend your losing phase.
Develop a trading plan (search here for that phrase). Paper trade until you can be consistent for 1 month without cheating. Risk minimum cash. Drop back to paper for 3 days whenever you break any of your core rules.
As much as you accept the advice I am about to give you will probably not do it in practice. Not doing it will extend your losing phase.
Develop a trading plan (search here for that phrase). Paper trade until you can be consistent for 1 month without cheating. Risk minimum cash. Drop back to paper for 3 days whenever you break any of your core rules.
Yes it is that fast!!!
montpro
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Hi Nine, thanks for the advice and I would love to take it but I think Im honest enough to say I will keep trading. What I do intend to do this coming week is demo trade with another provider as the one i am using has high spreads in my opinion. Can you recomend a good demo company?
I am looking at EFXgroup for future trading, as recommended by TRO in his ebook, but am open to ideas. I thought I had a plan but it seems to go out the window mainly due to being underfunded. When I look back at all my losing positions they would, with the odd exception, have made money had I enough margin left.
Do you think its best to stick to one currency pair or look at several?
many thanks
I am looking at EFXgroup for future trading, as recommended by TRO in his ebook, but am open to ideas. I thought I had a plan but it seems to go out the window mainly due to being underfunded. When I look back at all my losing positions they would, with the odd exception, have made money had I enough margin left.
Do you think its best to stick to one currency pair or look at several?
many thanks
Rhody Trader
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Depends on your timeframe. The shorter it is, the few pairs you want to watch.
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